PODCAST/TECH: Bryan Dieter , CEO of Purkinjie--EMR for the masses?

Here’s the transcript of my interview with Bryan Dieter from Purkinjie, who have a new EMR/practice management product for the smaller physician market. The only thing that I didn’t notice but did get picked up by one of my savvy commenters when the audio podcast was put up, was that Purkinjie’s Chairman is John Doerr’s brother! That’ll be relevant as you read on.

Matthew Holt:  OK, the podcasts are coming thick and fast now. Matthew Holt again from The Health Care Blog" and one of my last podcasts from the HIMSS floor is with Bryan Dieter who is the CEO of Purkinje. Bryan, good morning.

Bryan Dieter:  Good morning.

Matthew:  Don't be too fussy about the mike, I'll just wave it around and put it in your face and you'll talk and it works fine. So Purkinje is the result of a merger that happened a couple years back. Can you talk a bit about what you do and what the components were of that merger and what parts of the IT space you play in?

Bryan:  Sure. The merger took place in February of 2004. A company that was founded in St. Louis called Wellinx acquired Purkinje in Canada and we adopted their name as a result of that acquisition. The products that Wellinx offered was primarily an e‑prescribe application, diagnosis driven, into which we incorporated evidence based information for helping the physicians with prescribing decisions. Purkinje, in Canada, as you may be aware, has a pretty large footprint across the country. Some of the customers there include the Canadian Department of Defense. There are a couple of province wide initiatives and community health centers rolling out their EMR product, their e‑prescribing application is being deployed across Quebec and we have a pretty large presence in Ontario as well. The application there is primarily an EMR; it was one of the first to market in the early 90s. They've had tens of millions of dollars invested in their clinical knowledge base and we were interested in the product for that reason. What we are in the process of doing now is melding the capabilities of the application from Canada with the United States along with a native browser‑based application that we've recently completed the development and just made the announcement of it being in general availability here in the states.

Matthew: So tell me a little bit about what you think the key parts of those tools are that you have from that combined company. And you put the knowledge base together and the different parts. You must have done some considerable rework behind the scenes. Just give me a sense of the main functionality that's interesting to your clinicians and users and then give me a sense of, beyond the Canadian side, where else in the US it's being used and where your penetration rates are.

Bryan: Sure. Why don't I start with the last question about where it's being used? It's a product that's been in development almost five years. We have rolled it out to our alpha site outside of Chicago that consists of four locations with about twelve physicians and twelve mid‑level practitioners. The beta site was outside of Seattle,Washington. It's a two‑physician group with one nurse practitioner and support staff. The product consists of an integrated EMR, practice management, patient portal and decision support into a single product. It can be deployed in components so we still can provide just the practice management. We also provide billing services, transcription services. They can use the components of the EMR independently, so e‑prescribe; we have a dispensing application with providing physicians with pre‑packaged medication for dispensing to their patients from their office. We provide a full clinical suite EMR product and we also provide a patient portal that allows the patients to more effectively interact with their physicians over the Internet.

Matthew: The concept here is for a small or medium physician practice. This is one stop shopping, basically. Is this ASP based or is it client server? Do they get a choice?

Bryan: It's only ASP based. The Canadian product is only client server based but they've deployed it over Citrix and terminal servers. But the new product is ASP only. It's written using Microsoft .net technologies and we charge $399.00 a month for the whole suite.

Matthew: So what's your strategy going to be? I've just been in a previous conversation with the Glen Tullman of Allscripts. He has the luxury that he has a bunch of people who know his products pretty well and therefore can complain about it. That's appeared on my blog from time to time! But what's your strategy for rolling it out and getting physician adoption? The hard work of getting this into physician practices. What are you going to do?

Bryan: The hard work in reaching the group that we're trying to reach is these are groups of primarily fewer than ten physicians. The problems are two, the cost of sale and the cost of service. The cost of sale I think others have already done a good job of addressing and figuring out how to use the Internet as a method for effectively selling. eClinical works and EMDs are a couple that come to mind as having some pretty good success being able to do that. We are also seeing the ability to develop, deliver, and sell the product over the internet. That comes down then to the cost of service. We are actively working with IPAs to set them up as certification and professional service partners. We believe in this marketplace there has to be local support. We are working with the IPAs to get them trained and certified. We do the first three practices with them, where we lead, the second two they lead, and the assumption after that point is they will be sufficiently trained to be able to implement additional practices within their geography.

Matthew: So it will still be centrally hosted by your organization. But the training and installation and all that other good stuff will come locally. Do you envision the IPAs to be sort of a sales agent as well for you?

Bryan: No. We will still assume responsibility for selling. I think that they will provide a lead stream, but I don't expect them to sell. Interestingly enough what's happened already is that physicians are finding out about what we are doing and they call the alpha and the beta site and arrange for their own visits. So they are going to our sites and the physicians there are taking meetings with these people and there really isn't anything more powerful than having a physician demonstrating the product to another physician in their actual use.

Matthew: Let's just talk a little bit about your announcement this morning which is that you're getting some more funding from, it's not actually from Kleiner Perkins, it's from John Doerr directly, am I right here? Tell us what happened for those that can't read the press release I have in front of me.

Bryan: Yes, we just closed a ten million dollar round of financing with the majority of the money coming from John Doerr as his personal investment, as well as from Mike Long. Mike was the former CEO of Healtheon when they acquired WebMD and then became the chairman of the combined entity.

Matthew: You've managed to convince a very savvy guy that you've got something good going on. Which brings us to the big nutty question which everyone is dealing with in the whole healthcare IT space, which is you've got this seventy‑five percent, eighty percent of American doctors out there who are in solo practice or small practices, something in the under ten group you're aiming at, who basically haven't bitten the bullet yet and got online. They're online with the Internet but they're not using EMRs yet. Many of us have thought hat the only rational solution here is to have some kind of ASP solutions and it's interesting that you have gone that way. I know most of your competitors out there are selling it both ways at the moment and there are all kinds of complications around that. Where do you think that we are in the sort of take off of this cycle? Obviously you've managed to convince Doerr that you think that we're close enough. But just give me sense from your communication with physicians on the ground. Are we in a bit of an s‑curve that's going to ramp up? Is it going to be slow growth? Where do you see this going?

Bryan: Yes, I think we're at the beginning. If you look at the statistics that are out there, the most recent I've seen is that about 16 percent of physicians say that they've purchased an EMR. But there was a study I saw last month that showed it's actually probably fewer than 10 percent. Because when they actually drilled in and said, are you writing prescriptions electronically? Are you writing the note, etc? Many of them said, no, I'm not doing that.

Matthew: And that's actually highly biased towards the bigger groups, of course. So in the target market you're going after, it's really five percent.

Bryan: Yes. The only groups that have really had any success in that realm so far are eClinicalWorks and EMD. They've done a pretty good job of reaching that group. I won't get in a comparison of our product to theirs, but I feel very comfortable that we'll be more than competitive in terms of what we deliver to the physician. And I think that we really are just at the beginning of this, and we have to figure out how to address the service side as well. Because I think that the doctors have an expectation and a need to have their hand held through the process. And I think that the IPAs are a good way to accomplish that.

Matthew: So given that, tell me a little bit about the basic organization of the company. Since the merger you've obviously raised some money. How many employees do you have? Where are you based at with technical staff versus sales? And what's your sense of how you develop this new product. Of course, you've got to service your Canadian customers as well and increase what you're doing up there. What are your plans?

Bryan: We have just over 350 people in the company. We have just over 100 in product development. We have just under 20 in our clinical decisions support team. We have physicians, pharmacists, and nurses who develop and maintain original decision support content for our physicians. We have our headquarters in Chicago and New Hampshire and an office in Hyderabad, India.

Matthew:  How many people do you have over in India? Is that support process going well cross‑culturally? I know some people have had some trouble with that.

Bryan: Well, I think the difference is they're our employees. We're not out‑sourcing it. So they're actually Purkinjie employees, and they're covered under the same programs that everyone else in the company is.

Matthew:  OK, so that's working well. In my research work, I dealt with some outsource staff in India, and it's not as easy as it seems to get that process right! So talk to me about where you see the company going in the next couple of years. Not that you can tell the future, I know. But what would you like to see happen?

Bryan: In the near term, we're focusing on getting these professional service partners established geographically. And then we intend to build out from there. Because healthcare is still local, our intent is to allow these small, independent physicians to stay in business. And we want to provide them with the same capabilities they would get if they were part of an organization that had Epic or Cerner or another application set from one of the big vendors. We want them to be able to coordinate the care of their patients, regardless of who's caring for them and regardless of what system they're using. We want them to be able to effectively interact with their patients should the patients choose to use the Internet. And so we're going to be focusing on really getting to these small doctor groups and working with the IPAs to effectively deploy them and support them. And I think that will keep us busy for awhile. There's one other important part in this puzzle that we haven't figured out yet. We have some ideas about it. But there's a misaligned set of incentives between the payers and the doctors, and we need to somehow figure out how to break that down.

Matthew:  That's quite a challenge you set yourself if you're going to do that on your own. [laughter]

Bryan:  Well, we're actually working pretty effectively with a physician‑owned physician/Medicare advantage program in St. Louis. And they pay the doctors more than twice what United pays them in that market. And the patients get a much richer benefit, and the overall cost is still lower.

Matthew:  This is where I say they don't have to pay Bill McGuire's options.

[laughter]

Bryan:  I won't comment on that.

Matthew:  I love the responsible CEOs. You can't draw them on the good stuff. [laughter] That's pretty interesting. There are some ways around that. I just had this discussion with one of the physicians who's using an EMR, who is basically saying that now I'm a much better doctor because I'm now actually tracking what patients are doing, and talked about reminders and labs. And I think people who are on the outside, who are not practicing medicine, are saying this is a no‑brainer. To provide better care, you need to be doing this stuff.

But there's another nasty, unspoken part here, which is what are you doing when all the stuff you're cutting back on is the unnecessary tests and the unnecessary hospitalizations and the mistakes that get made and all that kind of stuff. Someone's getting paid for that stuff. And at some point, if there's 40 percent waste in the system, and you're going to automate it and take it out, that's 40 percent of somebody's income.

Bryan: And that's actually the problem we had with our e‑prescribe solution. We provide decision support into a physician's workflow. So it's a diagnosis‑based e‑prescribing application. When the physician selects the problem they are treating, we present them with a pre‑written list of prescriptions based on evidence and outcomes. And we've actually been proven in two peer‑reviewed studies that we've been able to change physician behavior positively. The problem is that when you look at who benefits financially from that, it's the payer, not the doctor.

Matthew: Well, plus I also suspect that your detail reps aren't quite as good‑looking as the ones who are trying to get them back the other way on the drugs. [laughs] Did you see the "Daily Show" with Miss Florida, who's also a drug rep? It's one of the funniest things. I'll have to send you the link to that. It's hysterical. So it sounds like a pretty exciting time. You sound pretty gung‑ho about this. Because there are a lot of people, as you know, who have broken their picks trying to get to this market. But John Doerr also had the odd success with a lot of this stuff. So the last question, of course, is where does this strange name come from?

Bryan: Jean Evangelista Purkinjie was a Czechoslovakian physiologist who identified many functioning parts in the human body, including what became known as the Purkinjie fibers of the brain and the heart that allow them to function. And so when we acquired Purkinjie in Canada, we asked our customers, which name resonates with you? And they by far said Purkinjie rather than Wellinx. They understood at least that it was a medical term. And we look at it as we provide the connection between the brain and the heart for the physician in the practice of medicine.

Matthew: Oh, good tag line. You're working hard on that one, I must say. That's great. So I've been talking to Bryan Dieter, who is the president and CEO of Purkinjie, which has got an interesting new product out. Into that complex, difficult part of the physician market that I'm always going on about on the blog. And I wish you a lot of luck, because someone's got to cure this problem. One day, I want to go into my doctor and see him using a computer and not a piece of paper. And I hope for that to happen in my lifetime. And if people like you don't get somewhere, maybe I never will. Anyway, thanks for your time.

Bryan:  Thank you, Matthew.