Michael J. Doyle, Medsphere's president and CEO, chats with David Asman of FOX Business News about federal legislation, health IT, and what the future holds for Medsphere.
Click here for the FOX news clip or see transcript below.
FOX: The Obama administration is offering $19 billion in stimulus funds to hospitals that upgrade to electronic health records. Our next guest hopes to benefit from the switchover.
Joining us now, Michael Doyle. He’s the CEO of Medsphere.
Michael, congratulations for everything that’s going on with your company. We should mention that you have something called OpenVista . . .
MICHAEL DOYLE: Correct.
FOX: . . . which will help in this transition project. Tell us how it works.
DOYLE: Yeah, basically, we’ve taken a national treasure, which is VistA from the VA, which we as taxpayers have spent $8.5 billion creating, and we’ve gotten the source code for that through a Freedom of Information Act grant about seven years ago. We spent about $40 million and we’ve open-sourced it. So that means we give this away to every hospital in the United States for free. So there’s no excuse for any hospital to say that they can't afford an electronic health record because VistA is the most reliable, the most proven electronic health record in the world, and because there’s no upfront licensing fees, people pay over time for subscription.
FOX: Now, you did all of this before you knew there was going to be a stimulus?
DOYLE: Oh, absolutely.
FOX: So it’s not like you created this company just to take advantage of that $19 billion, however it certainly doesn't hurt.
DOYLE: It’s better to be lucky than good.
FOX: Yes, exactly.
DOYLE: It really is.
FOX: Exactly. So how do you take advantage of it? Do you tell hospitals, 'Look, if you want to get a piece of this stimulus money you use our system and it will help you do that’?
DOYLE: Yeah, basically, we’ve put a guarantee out there. Any hospital that signs between now and the end of the year, we will guarantee they will qualify for stimulus funding. And the government will pay about three times the cost of what they'll pay us. So . . .
FOX: The deadline, by the way, for hospitals is 2011.
DOYLE: 2011, that’s correct.
FOX: So by 2011, they have to have this recordkeeping and you will guarantee them that they will be able to get in under the deadline if they use your service.
DOYLE: That is absolutely correct. We will guarantee them.
FOX: Well, how has the response been?
DOYLE: It’s been terrific.
FOX: Do you have a lot of hospitals signing up?
DOYLE: We just signed Hoboken University Medical Center right here in New Jersey, we have Lutheran Medical Center here in Newark—we’ve got a lot of hospitals, and a lot more that are very interested in working with us.
FOX: Is the government assisting you directly or are you just assisting hospitals to take advantage of the government?
DOYLE: The government is not assisting us directly . . .
DOYLE: . . . but they are, in effect.By creating VistA, they have assisted us and we’re taking that and now making it available to everybody.
FOX: Now, yours is a private company.
DOYLE: It is.
FOX: How have you been able to get capital over the past couple of years?
DOYLE: We’re venture capital-backed, and we raised $43 million, and we’ve taken that and deployed that capital in providing the hospitals this great care.
FOX: But I assume, and you have . . . we were talking before . . . you’ve been through the public process before, taking a company public, that eventually you want to do the same with this.
DOYLE: Yeah, it’s absolutely a possibility. It depends, of course, as you know, on markets, right? But we’re building this company to be a public company.
FOX: Well, as the number of clients gets larger, and it appears that it’s doing that, partly because you follow the government money, will you have enough resources to fill the demand?
DOYLE: I think so because we’ve gone to an indirect distribution model of using systems integrators to work with us to actually deploy it. So, yes, we have . . . I think we figured that out. We'll see, but I think we figured that out.
FOX: And is this your one niche or are you going to expand into other things, as well?
DOYLE: We're doing hospital medical records, physician medical records, and also large clinics, as well.
FOX: And the money is there.
DOYLE: The money is there.
FOX: I mean, the hospitals . . . despite the fact that a lot of people are afraid to put money into healthcare right now because they’re not sure what they’re going to do in D.C., you’re seeing the money is there.
DOYLE: Any hospital that doesn't have an electronic health record in the next five years, in my opinion, is going to go out of business. The healthcare system, itself, is transactionally based, and it’s going to go . . . start paying for quality. You cannot measure quality . . . you cannot pay for quality if you can’t measure it.
FOX: Any idea of when you're going to go public? We got five seconds.
DOYLE: Sometime in the future.
FOX: Medsphere is the name of the company. He’s not going to be more specific than that.
Michael Doyle, congratulations.
DOYLE: Thank you.