New visions for fixing health care

Putting your tax dollars to work

Carlsbad, Calif.
Launched: 2002
What it offers: A more affordable records-management system for hospitals and clinics

President Barack Obama and Congress have pledged to spend billions of dollars on health care technology as part of the new economic stimulus package. Industry experts expect a big chunk to be doled out for electronic recordkeeping software, or computerized systems that allow doctors to maintain and share a full account of a patient's health. While more than a dozen firms have been selling such technology for years, fewer than 15% of the nation's hospitals have made the investment. One major inhibitor: The expense and incompatibility of different kinds of records management systems.

Enter Medsphere, an 87-person open-source software firm whose products cost about one-third of what its competitors charge. The company's application, OpenVista, is a commercialized version of open-source software developed by the U. S. Department of Veterans Affairs nearly 15 years ago. In 2002, the founders of Medsphere downloaded the code for the VA's software, which is available through the Freedom of Information Act.

Photo of Medsphere CEO Michael Doyle"We've taken $8 billion in assets - in what we as taxpayers have spent creating this product - and, after investing our own money into it, [revamped] it to work in a non-VA hospital setting," says Mike Doyle, Medsphere's CEO. "We can charge a lot less because it didn't cost millions of dollars for us to build the system."

For a monthly subscription fee that covers tech support (Medsphere doesn't charge clients a setup fee), hospitals that use OpenVista receive all the perks of a good electronic hospital record system: the staff can electronically manage patients' information, improve billing and drug-prescription accuracy, and reduce diagnostic errors. What sets OpenVista apart - besides its price - is its open-source roots, which helps the software to mesh with existing systems already in place. "Our job is taking whatever the hospital wants to keep and integrating it into OpenVista," says Doyle.

About a dozen hospitals and more than 2,500 physicians currently use OpenVista, and the company expects to sign up a few more by spring. But Doyle and Rick Jung, Medsphere's COO, have been busy lecturing another audience, as well: They recently spent two months lobbying legislators in D.C., talking about the benefits of providing incentive payments to facilities that adopt electronic record-management systems.

"We're hoping that something gets incorporated into the $20 billion Obama stimulus bill," says Doyle.