PatientKeeper pursues PDA users with universal infrastructure

February 7, 2001

Having built a customer base of 40,000 mobile device users in just two years, PatientKeeper (formerly Virtmed) could well consider itself healthcare's premier PDA software source. But the company has bigger plans in mind, and its recent name

Having built a customer base of 40,000 mobile device users in just two years, PatientKeeper (formerly Virtmed) could well consider itself healthcare's premier PDA software source. But the company has bigger plans in mind, and its recent name change reflects its goal of becoming the leading provider of mobile patient data management products and services.

Unlike the plethora of companies trying to push PDA use in healthcare, PatientKeeper is not focused on a single application or platform. Instead, the company expects its success in the mobile healthcare sector to come from addressing two critical factors: infrastructure and interface.

"What we have seen is a lot of money and a lot of relatively small companies establishing themselves in the handheld space," said Gary Foster, CEO of PatientKeeper. "But they seem to think it is an applications race. They have not put energy into understanding the infrastructure behind the scenes."

Just two years ago, PatientKeeper was still primarily a one-trick pony. As Virtmed, the company was selling its GlobalSync synchronization server via a single application entry point: charge capture. But in early 2000, it joined forces with Dr. Maulin Shah from Baylor College of Medicine, who had developed his own patient management software and was making it available free of charge via the Internet. In its first year, the software had been downloaded more than 1000 times.

Shah eventually sold the technology to Virtmed, joined the company, and began guiding efforts to integrate PatientKeeper's universal user interface with the GlobalSync server to create a fully functional PDA platform. The company's goal is to offer the definitive mobile "dashboard" for healthcare providers and software developers.

"We have never felt that the players in the handheld space have understood the importance of infrastructure in allowing one device to support all the needs of the clinician," said Cameron Lewis, vice president of business development. "We have been very focused on the platform and the universal user interface required to achieve that, and on having an open-architecture approach that supports the development community."

The Java and XML-based PatientKeeper platform servers are designed to reside on top of a hospital's legacy hospital information system (HIS) and facilitate the transfer of information between mobile devices and any IS within the facility. The downloadable software is available for a nominal per-user licensing fee ($35); PatientKeeper generates most of its revenue through monthly fees charged to the provider institutions.

"We leverage the investment hospitals already have in their legacy IS and provide a whole new set of technology firepower over their PC-based information structure," Lewis said. "Even if the systems don't talk to one another, we can bring all the information into our servers and integrate it for two-way exchange via the handheld."

The company is still using its charge-capture application as the first step in creating a broad-based mobile patient management infrastructure. But Foster and Lewis are confident that their enterprise strategy-as opposed to the private practice approach most of PatientKeeper's competitors are taking-will leave them well positioned when the mobile healthcare market finally takes off.

"When you look at players in the handheld space, you see a whole crowd of them focusing on the group practices and private physicians," Foster said. "The information infrastructure model for that segment of the market is PC-based, so it is relatively easy to develop a suite of applications in that environment. We started on the institutional side with acute-care hospitals and large IDNs, which is a much more difficult problem. For us to take the next step into the private practice arena is a whole lot easier than for other players to integrate back into the institutional environment."

PatientKeeper is also banking on its experienced management team, which includes former executives from GE, IDX, Medscape, and McKesson/HBOC, and key strategic relationships to help it succeed where others are struggling. One of the company's first major investors was 3Com, which selected PatientKeeper as its handheld-related investment in the healthcare market in March 2000. PatientKeeper subsequently raised more than $43 million in its second round of financing last August and signed a codevelopment and comarketing agreement with Cerner in October. Several other partnerships are pending, according to Lewis.

In the long run, however, PatientKeeper will have to rely on healthcare providers to make that leap of faith all PDA providers are waiting for. The company claims more than 40,000 users have already downloaded its software, but that number represents a drop in the proverbial bucket. Even so, the company believes it will prove the viability of its business model this year and move into a major growth period next year.

"At some point, healthcare has got to treat information management and the ability to get timely information as critical, and there are some trends in the market that indicate physicians are beginning to use tools to manage information," Lewis said. "We are betting the company on being able to provide a platform that allows for remote control of legacy systems by the physicians and saves physicians and hospitals time and money."

The social and regulatory pressures on improving the quality and efficiency of healthcare also work in the company's favor, according to Foster.

"We want to help save time, lives, and money," he said.