Seattle’s TransformativeMed Carves Out Niche in Medical Specialties

An estimated 99 percent of US hospitals now track patients’ health information using computerized records systems, many of which were installed to replaced paper medical charts. As a result, startups are rushing in to capitalize on the recent health-records digitization wave. Some of them, like Seattle-based TransformativeMed, are making the case that their add-on software products and services can improve doctors’ satisfaction with the technologies they use to do their jobs.

This week, TransformativeMed announced $5.8 million in new funding—an investment that values the startup at about $13.5 million, says president and CEO Doug Cusick. TransformativeMed plans to use some of the proceeds from the Series A round to support sales and marketing of its software.

The company has built a series of applications that aggregate patient information from different parts of a hospital’s electronic health records (EHR) database. These applications are designed to help physicians and other users collaborate, and make better and faster care decisions, Cusick says.

For example, the startup says its diabetes management application, GlycemiCare, can help a doctor understand, in less than 30 seconds, why blood sugars suddenly went up or down, and suggest a response to the change.

Cusick says the products sold by today’s leading EHR software vendors—like Kansas City, MO-based Cerner (NASDAQ: CERN) and Verona, WI-based Epic Systems—do a good job of storing all the key information. But, he says, users often have to navigate through several screens to find the data they need right at that moment.

“I liken it to if you’re looking at a book without a table of contents,” Cusick says. “Everything that you need is in the book, but … you really don’t know where to go. It has just not been structured intuitively.”

David Stone and Erik Van Eaton co-founded TransformativeMed in 2011. However, the company’s roots date back to the mid-aughts; UW Medicine, where Van Eaton works as a transplant surgeon, had recently installed EHR software developed by Cerner at UW Medicine hospitals.

Cusick says that as Van Eaton and other clinicians spent time using Cerner’s record-keeping software to document information on their patients’ care, they began noting aspects of the software they felt could be improved.

“It became evident that through implementation, there were a lot of gaps in clinical workflow—how doctors and nurses interact with the computer to get the specific data they need,” Cusick says.

TransformativeMed’s client roster includes about two dozen healthcare providers, among them Catholic Health Initiatives, Indiana University Health, MedStar Health, and Seattle Children’s Hospital. The startup’s customers operate a combined 130 hospitals, TransformativeMed says.

All of the organizations that use TransformativeMed’s tools also use Cerner’s software to manage patient records, Cusick says. The startup sees an opportunity in being able to bring onboard other hospitals across the US already using Cerner’s software, as well as healthcare providers in other countries.

But despite being “100 percent dedicated to Cerner” today, it’s likely TransformativeMed will eventually configure its products to work with those sold by Epic and other vendors, Cusick says.

Cerner, Epic, and other top vendors have created software that can perform well technically when scaled to encompass millions of patients’ records, Cusick says. But an area where TransformativeMed and other digital health startups say today’s leading EHR companies have room to improve is applications for clinical specialists like endocrinologists and oncologists, he says.

Over the years, EHR vendors have introduced specific products for specialists. Epic’s website lists applications for several specialties, including cardiology, obstetrics, oncology, ophthalmology, and radiology.

Cusick says he sees Cerner and Epic, both of which turn 40 this year, as being at a disadvantage versus smaller and more nimble companies when it comes to building software that meets specialty clinicians’ standards.

“If they’ve not done it in 30 years, they’re not essentially prone to do it now,” Cusick says of today’s top EHR firms. “They’re so much larger [than newer entrants] in terms of what they’re providing an organization. We’ve got an entire company dedicated to specialties and the data that they need.”

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