Life Image Captures $2.5M Series A, Working with EMC for Digital Medical Image Service

Life Image was launched in January 2008 with core software developed at Boston’s Massachusetts General Hospital. Now the Newton, MA-based startup is charging ahead with cash from a $2.5 million Series A round of equity financing closed quietly in April, aiming to close gaps in the way digital medical images are shared and stored, company officials tell Xconomy.

With an initial focus on radiology images, Life Image is developing software and a service intended to do several key things. It allows hospitals and imaging centers to index and search their vast libraries of digital medical images such as X-rays, MRIs, and CT scans. It provides patients and physicians with cloud-based inboxes to securely store and enable the transfer of their medical images (as opposed to the current practice of hospitals burning the data onto compact discs for patients to keep.) And it offers an infrastructure for securely sharing digital medical images among doctors from different hospitals and medical offices—among other features.

Hamid Tabatabaie, a former CEO of Boston-based medical image software firm Amicas (NASDAQ:AMCS), is heading Life Image as the founding chief executive. Life Image, he tells me, is on the right side of history because its technology could help save U.S. healthcare organizations an estimated $10 billion to $20 billion spent annually on radiology images that already exist somewhere but, in many cases, need to be redone because they aren’t easily retrievable. The startup, which plans a public release of its service this fall, could also provide a way for hospitals to give patients access to their records that’s less expensive and more efficient than putting them on a CD.

In general, over-utilization in medicine, including redundant imaging exams, is believed to be a significant contributor to skyrocketing healthcare costs in the U.S. “A lot of payers, both on the government side and the private side, have begun to put incentives and disincentives in place to address over-utilization,” Tabatabaie says. “So that was our Holy Grail—we got what we needed to align interests.” Otherwise, radiology departments, for example, would have no reason not to repeat certain exams because those exams generate additional revenue. Life Image could help reduce instances of redundant medical imaging, enabling hospitals and doctors to capitalize on incentives for avoiding repeat exams.

For its first round of financing, Life Image drew equity investments from Boston venture capital groups Partners Innovation Fund and Massachusetts Technology Development Corporation. The initial investor was Partners, a venture group focused on investments in startups based on technologies from member hospitals of Boston-based Partners HealthCare System like MGH. Unnamed investors also contributed to the round, says Robert Creeden, a managing partner at Partners Innovation Fund and a director of Life Image.

Life Image plans to offer both an enterprise version of its software that hospitals could run on their own servers and a cloud-based service that allows doctors and patients to access imaging records over the Internet. A component of the enterprise package is a search application to index all past and current radiology images and studies within the firewall of a medical center to enable quick retrieval. Keith Dreyer, vice chairman of radiology informatics at Partners and MGH, developed the application and serves as an advisor to Life Image. The startup makes money with a one-time fee for each set of images that a hospital transfers to patients and doctors at other medical centers. Those patients and doctors are given online inboxes where they can securely access and store the images as well as share the records with other clinicians.

The cloud-based aspects of the startup’s service are built on the Atmos cloud storage and management system from Hopkinton, MA-based data storage giant EMC (NYSE:[[tickerEMC]]). Tabatabaie says the adoption of the EMC cloud storage service provides an added layer of security and an optimized way to access the data remotely. Securing the imaging records is crucial to complying with the federal Health Insurance Portability and Accountability Act, or HIPAA.

Life Image is focusing initially on digital radiology images because the majority of radiology images in the U.S. are stored in digital format and there are widely adopted standards for how the records are digitally formatted, Tabatabaie says. In the future, the startup plans to expand into digital images from gastrointestinal exams and pathology tests, among others. In fact, Tabatabaie is extremely familiar with digital medical image standards from his days at Amicas, a major provider of Web-based information management software for medical images, where he was chief executive from 1999 to 2005.

A component of the strategy at Life Image is to integrate its technology with electronic health records. The startup is already working on such an integration with an open source electronic medical record system, developed at Children’s Hospital Boston, called Indivo. Tabatabaie says that a major competitive advantage of his firm over giants moving into the e-health arena like Google and Microsoft is the extensive domain knowledge of its executives and founders.

“The bottom line is that this is going to help patients take control of their own care, be able to share vital medical information with whom they want, when they want, where they want,” Tabatabaie says. “Aside from all the costs savings and efficiencies, the technology also helps millions of Americans with chronic diseases in which medical imaging plays a significant role in their care.”

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