A startup called Patient Communicator is tapping the market for cost-conscious, tech-savvy doctors.March 05, 2012
These are tough times for general practice doctors. With health reimbursements declining and overhead soaring, it's hard to run a profitable operation. And for solo practitioners, the prospects are bleaker.
That's exactly the problem a fledgling New York City-based startup is trying to solve. Launched by a long-time Larchmont, NY, internist and his serial entrepreneur son, the company, Patient Communicator, sells a cloud-based system that links patients and doctors. The system makes it possible for all non-urgent matters, from scheduling appointments to requesting prescription renewals, to be done online. The result, according to cofounder Jeff Novich, is a substantial increase in efficiency and decrease in overhead. "By using cloud technology, we've been able to develop a system that gives patients more direct access to their doctors, creating a better workflow for physicians, thereby allowing them to have more time for patient care," says Novich.
Novich should know. He and his father, Dr. Robert Novich, a solo practitioner for about 30 years, designed the system originally for the father's practice. About four years ago, with an office staff of three, Dr. Novich was taking about 200 phone calls a day, mostly for non-urgent matters. But he got to thinking that, with the right technology, he might be able to handle all non-emergency communications on his own, reducing the need for any office staff, all the while increasing the amount of time he could spend with patients.
Father and son created the basic outline of an online, cloud-based system that organized patient-doctor communication according to a few categories: requests for prescriptions, referrals or lab results, scheduling appointments, and general questions. They then handed it to an outside developer. And over the next two years, they worked daily to tweak the site. Eventually, they created something considerably more effective than they'd imagined. Dr. Novich was able to serve 1,200 patients without any administrative or nursing staff. At the same time, overhead dropped from about 45 percent to 15 percent and margins increased to 85 percent compared to 55 percent.
Around a year and a half ago, the Novich's came to another realization: By relying on cloud technology, they were able to develop an accessible and affordable system—so accessible, in fact, that it most likely would appeal to a larger audience. Why not form a business to sell it to other time-and-cash-strapped physicians? "If it worked a miracle in my father's practice, it could do the same for other doctors," Jeff Novich says. They decided to form a company, calling it Patient Communicator.
The decision also dovetailed nicely with a growing trend in the sphere of medical practice management: the so-called micro practice movement aimed at doctors working in solo and small groups. A concept popularized by Dr. Gordon Moore, a family physician in Rochester, NY, in the mid-2000s--more specifically, his term was the Ideal Medical Practice--it's all about helping small practices run more efficiently, cut costs and improve patient care, largely through the use of online technology. "The micro practice market is a natural for this system," says Philippa Kennealy, a former family physician who runs The Entrepreneurial MD, a Los Angeles-based coaching firm specializing in doctors.
An active member in the New York technology scene, Jeff Novich had already launched two digital startups over the previous six or so years and was used to hobnobbing with others of his ilk. In the course of his networking, he learned about a new startup incubator aimed at health and medical companies called Blueprint Health. Late last year, Novich applied and was accepted into Blueprint Health's first three-month session, which started in January; Patient Communicator, along with eight other start ups, received a $20,000 investment for a 6 percent equity stake, along with a workspace, access to experienced mentors and the opportunity to meet investors.
Patient Communicator's initial target is tech-savvy practices with one to three doctors, who would pay a subscription fee of $50 to $250 a month. But that's a limited market. Less than 1 percent of all medical practices in the U.S. are micro practices, according to Dr. Moore, and 17.6 percent of family physicians are in solo practices, according to the American Academy of Family Physicians.
So, next step will be to form a partnership with an electronic medical records (EMR) provider, integrate Patient Communicator with that system, and do joint marketing. Another move will be to sell a version to larger practices that allows for only a secure method for patients to contact their doctors with questions in the cloud, instead of other capabilities, like scheduling appointments. Patients will pay $30 to $100 a year to have access to the service and Patient Communicator will reimburse the physician 50 percent of that fee.
Still, it promises to be a tough slog, especially since physicians tend to be conservative about investing in new technology and usually don't have the time to do much about it. "Doctors are not only very busy, but many have been burned in the past by promises of what tech tools can do for them," says Brad Weinberg, a co-founder of Blueprint Health.
Jeff Novich is well aware of just what an uphill battle the company faces. But, he says, "You want a business where you're selling water to the person with their hair on fire. And that's the kind of business we have."
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