from Nashville Post, June 27, 2002

Growing out of the PPM quagmire

Health care entrepreneur Stryker Warren builds company around its best asset

CIMplify's practice management technology extends beyond original urology base

by Molly Cate

Thursday, 6/27/2002 — Stryker Warren’s physician practice management business survived the industry-wide crash. Now he faces perhaps a tougher challenge: building value for his shareholders.

Growth for a PPM — the most out-of-favor health care niche over the past five or six years — means adding more physicians to the network. But because of the industry’s less-than-splendid track record, convincing doctors to sell their practices is akin to luring a fish out of water. Some physicians and investors are still licking their wounds from the once glistening sector, which promised value-added for the former and fattened pockets for the latter, but never accomplished either. Warren’s company, Urology Health Group, was founded in 1997 as a specialty PPM geared toward urologists.

Five years later, the chief executive has carved out his company’s information technology product (originally only used by physicians in UHG’s network), branded the product CIMplify, and is now selling it to not only physicians outside the network, but also physicians outside the practice of urology.

“Think of CIMplify as being heretofore a department within UHG that satisfied ongoing management obligations to practices; but what we are now saying is it is a very, very valuable asset that many practices outside the specialty of urology and outside the owners of UHG want,” says Warren, who has sold the product to physicians (non-urologists) in California and Chicago. 

“The benefit to UHG shareholders is we’re building more critical mass, more revenue, more profits and hopefully we’ll have a distinguishable stand-alone company.”

For the foreseeable future, UHG will also continue providing its services to members, which includes 59 physicians in 10 practices. No outside capital was brought in to UHG upon its formation. Instead, the physicians, in merging their practices’ assets, infused working capital. In turn, the physicians acquired UHG common stock. Physicians now own 85 percent of UHG, a company which Warren says is profitable. But, prospects of growing it have slimmed.

“When the company quit growing through merging practices in, it became fairly obvious to us at some point in the future, when we satisfied our internal needs, we needed to look externally for [growing shareholder value].”

In fact Warren recalls estimating that UHG would be serving 500 – 600 doctors by 2002 when his vice president of business development Joyce Vollmer and chief information officer Jeff Heyer were deciding on the PPM’s initial IT platform in 1997.

“As others looked at what we were doing they said ‘that’s a pretty interesting system and from what I’m hearing about its capabilities, would you ever sell that to anyone else?’ Originally we thought ‘of course not, we’re going to devote all our attention to our own practices.’”

Times changed. The IT product Warren and his team quietly built as a paid expense, underwritten in part by management fees from those practices, is now the company’s best bet for growth. Although its services include the basic requirements of practice software, such as billing and collections, capital expenditures budgeting, scheduling, and compliance, his management team is working on expanding the product into services such as electronic medical records.

Vollmer, vice president of development, is testing a product called Global HealthPort at some of the company’s current practices. Still under development, Global HealthPort is an ATM-card-type feature that contains an abbreviated medical history of the patient. Unlike most electronic medical record products, it collects patient information prior to the office visit, rather than at the point of service. The medical information is not stored directly on the card, but rather it provides access to a secure portal where the information is stored. Think of the card as a key to the information.

Patients create an access list to the portal so that their physicians, ranging from their ophthalmologist to cardiologist, can add medical information to the portal, versus dictating it for paper records. Consumers can access the information at all times and chart any medical problems that might occur between visits. Vollmer says the product likely will be paid for on an annual subscription basis similar to a credit card.

But, the IT road is a hard one to haul. Healthcare IT remains extremely fragmented, and both firms and products are a dime a dozen. Warren’s response is to develop products that can be interfaced with existing systems -- often very significant investments for practices -- as well as a stand alone product.

“I think there is so much resistance initially with some of the standard applications out there. What we’re trying to figure out is how we can — hopefully with some proprietary aspect to it — develop some type of transitional electronic medical record where you can improve the patient experience and take some of the ‘storm and drag’ out of the waiting room. Hopefully at the same time it also gives you the opportunity to think about verifying insurance coverage and doing some things in respect to meds for a new patient,” Warren says.

Because of the industry’s fragmented, crowded nature, Vollmer says CIMplify must take on an extra-strong emphasis on service. “So many practices run out, buy something off the shelf, put out a lot of work and time in investigating a system, and pick one that’s very expensive and very comprehensive. They bring it home, plug it in and go ‘Wow, there’s just a whole lot to making this thing work,’ especially with electronic medical records. Poor implementations will cost you more money and take twice as long, the exact opposite of what most docs think. You will never hear that from a larger company, but you’ll hear it from us. We want you to be able to use these tools to the best of your ability, and save time and or money, or it’s bad for us.”

Warren concedes that he doesn’t know what CIMplify will look like five years from now, but he does know the new name will cut out a lot of explanation when making a pitch to a group of doctors who don’t specialize in urology. And it will rid the product of the PPM stigma.