Cary startup connects health care providers in age of reform
Jul 22, 2013 (The News & Observer (Raleigh - McClatchy-Tribune Information Services via COMTEX) --
Fax machines everywhere are collecting dust, but in many doctors' offices and hospitals, the fax remains a stubborn anachronism.
It's an outdated mode of communication that Siu Tong, CEO of Cary-based Infina Connect Healthcare Systems, has all but eliminated within parts of North Carolina's medical system. Within the last two years, Tong has connected more than 400 of the state's clinics with a cloud-based resource management system that allows health care providers to communicate without sending stacks of paper through the fax machine or by snail mail.
The system, called the Intelligent Care Coordinator, aligns with the larger goals of the rapidly growing startup Tong founded in 2010. As the healthcare industry begins to move away from the fee-for-service system, Infina Connect has developed a number of cloud-based products that may ease the industry's transition to the patient-centered care model outlined in the Patient Protection and Affordable Care Act.
"It dawned on me that primary care providers were still faxing to a specialist, and that they didn't really use electronic communications," Tong said. "Being able to collapse that process and make the whole system paperless results in lower labor and higher patient value."
The ICC system streamlines communications regarding prescriptions, referrals and patient records. It has fostered a network of more than 1,500 care providers in the Raleigh area, as well as the Triangle's three major hospitals.
Tong's idea has earned the company both regional and national attention. Within its first year, the company's profit margins increased more than 300 percent, Tong said, and last month, the Wall Street Journal chose Infina to participate in its "Startup of the Year" series.
From Hong Kong to MIT
Tong was born in Hong Kong and moved to the United States to attend Cornell University, where he received a bachelor's degree in engineering. He received a Ph.D. in aerospace engineering at the Massachusetts Institute of Technology.
He held several high positions at Optimum Technologies, a medical device developer, before founding Engineous Software, an optimization software developer, in 1996. He founded Infina Connect shortly after Dassault Systemes Simulia, a French software vendor, acquired Engineous.
In February 2011, shortly after the company was founded, Infina Connect raised $684,000 in equity investment. Eleven investors -- many of them physicians who believed in Tong's vision -- participated in the offering. In January 2012, the company raised more $1 million in investments, according to securities filings.
Infina now employs 19 people, including its development team in Asia. The company collects about $12 per transaction on the network, which Tong said he expects to grow exponentially within the next year.
Carving a niche
The ICC technology has enabled the company to carve a niche in the U.S. health information exchange industry, valued at more than $1 billion in 2012, according to the most recent research provided by IDC Health Insights.
"HIE is a growing segment, and cloud technology is one of the four fundamental pillars of the next generation of systems," said Scott Lundstrom, vice president and general manager of IDC Financial and Health Insights. "It's a major trend in an industry that's very consumer-centric and increasingly driven by analytics. The critical success of the technology is that healthcare providers can engage their patients and move into the ACO model by improving quality and reducing costs."
Key Physicians, a medical home network in the Triangle and one of Infina's major clients, is involved in several Accountable Care Organizations. The ACO model, a major provision of the healthcare reform bill, establishes networks of doctors and hospitals that seek to reduce the cost of healthcare for groups of Medicare beneficiaries. If an ACO succeeds in reducing the cost of Medicare, it will share in the savings.
The ICC helped Key Physicians achieve considerable cost reduction within the first nine months of an ACO contract it entered last spring, according to Ray Coppedge, executive director of Key Physicians. The network allowed the ACO to make referrals at minimal cost to the patient.
"Back in the day, healthcare providers didn't know or consider the patient value," Coppedge said. "With new health care plans that are more tiered, it's important for the practice and referral coordinator to know the different referral networks. It can result in tremendous savings."
Hesitant to digitize
Some healthcare providers are hesitant to digitize the exchange of health information out of fear of violating the Health Insurance Portability and Accountability Act, according to Lundstrom. He said some managed service providers decline to sign a business associate agreement that protects personal health information in accordance with HIPAA.
"There are significant risks there," he said. "You need to be careful and have a good understanding of how HIPAA works in order to be compliant when engaging in these systems."
Coppedge said HIPAA was a major concern when Key Physicians began using Infina's ICC system in April 2012. But Infina agreed to enter into a business associate agreement, and Key Physicians now communicates much more effectively as a result of using the network.
"We've been able to get away from the fax completely," Coppedge said. "After the initial referral is made, all further communication between the two practices is done by messaging. The referral coordinators love that aspect, because once they have the referral, it doesn't get lost, and there should be no phone calls afterward."
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