MMS execs say restructuring doesn't include telemedicine shutdown

March 1, 1998

MMS execs say restructuring doesn't include telemedicine shutdownCompany has shelved new desktop systemMultimedia Medical Systems, a healthcare information-technology applications developer that just two years ago appeared to be one of

MMS execs say restructuring doesn't include telemedicine shutdown

Company has shelved new desktop system

Multimedia Medical Systems, a healthcare information-technology applications developer that just two years ago appeared to be one of telemedicine's rising stars, is denying rumors that it has pulled the plug on its telemedicine operations. The Charlottesville, VA-based company reportedly stopped delivering products in December, following a year-long reorganization of its telemedicine business that included staffing cutbacks, key management changes, and new product delays.

But MMS officials say they are simply trying to consolidate their operations, including incorporating their Maitland, FL, office, which housed much of the company's telemedicine business, into its Charlottesville headquarters. The company made a similar move last year with its Boston-based network services operations, eliminating some 60 jobs in the process. In addition, MMS claims it has not stopped delivering telemedicine products. Rather, it has chosen to indefinitely shelve a new desktop system that has been in development for the past two years, said Steve Swenson, senior vice president for sales and marketing.

MMS entered the telemedicine market in early 1996 when it acquired software developer md/tv in early 1996. Md/tv already had a telemedicine product, called HouseCall, that was considered one of the best on the market, and MMS planned to use that technology as the cornerstone of a dedicated telemedicine business that would provide more focused products and services. Following that merger, HouseCall became the platform for MMS' first telemedicine product, called CareLink. The multimedia system combines interactive-video and store-and-forward options for remote diagnosis and second-opinion consultations with access to online medical information databases.

By 1997, MMS claimed more than 100 CareLink installations, and its customer base included the U.S. Department of Defense, Georgetown University, and the Central Virginia Telemedicine Network. In fact, the DOD reportedly was interested in using MMS technology as part of a desktop application for the agency's new Web-based telemedicine network, and MMS believed the Windows-NT version of CareLink it was developing would fit the bill.

The company was also experiencing some growing pains, however. In late 1996 and early 1997, several key players in the telemedicine unit left the company, including Mike Kerouac, founder and president of md/tv and senior vice president at MMS. In addition, responsibility for the telemedicine business changed hands several times. Bugs in the new desktop product delayed its release from spring of 1997 to the fall, and the company finally decided to shelve it. That decision reportedly caused the company to lose out on a $2.5 million DOD contract.

In early December, rumors began surfacing that MMS was trying to sell off its telemedicine business; by mid-February, it was reported that the company had shut down all telemedicine operations, retaining only a small service staff to support the 160 CareLink systems installed to date. In reality, Swenson said, the company closed only its Maitland, FL office as part of an ongoing effort to streamline operations.

"We are still in the telemedicine business, and we are still supporting our installed base," Swenson said.

In the coming months, MMS plans to reevaluate its strategy in the telemedicine market and decide what its next-generation product will be.