LeadingReach Aims to Close Healthcare’s “Weakest Link,” Referrals

Innovation in healthcare can come from the unlikeliest of places. That seems to be the case at LeadingReach, an Austin, TX-based medtech firm: The startup was founded out of a marketing agency.

LeadingReach wants to shore up what it calls the weakest link in healthcare delivery: the referral. The six-month-old startup sells Web-based software to specialists to better track patients through their care. Do they see a specialist? Did that physician receive the patient’s healthcare records? And, if not, the software allows for electronic transmission of documents, says Tony Frey, the company’s chief operating officer.

Since July, LeadingReach has signed up more than 250 healthcare organizations as customers, he added.

The startup, which has 14 employees, is self-funded and currently profitable, he says. LeadingReach is doing a friends-and-family round of investment.

Here is an edited transcript of my conversation with Frey.

Xconomy: How did you get from being a marketing company to developing a healthIT platform?

Tony Frey: At Sparksite, we create software for events, trade shows, taking the bulky paper collateral that you take to trade shows and made a digital version of it. The software e-mails you digital copies of what you are interested in. This is the stuff that you usually just leave in your hotel room. The software has a tracking feature, who opened what and when, with an integration into Salesforce. St. David’s Hospital (in Austin) was a customer; we do a lot of video for them. They said, “We have that same problem in healthcare around health literacy.” So we developed a version primarily for St. David’s to help them deliver the content to patients. They can flag who is reading the content or not reading. Someone can call, “I see you didn’t read this information; this is what you need to know.” This created a patient-engagement platform. Last November, we split it into two companies. Leading Reach dedicated to healthcare; Sparkside retained being an agency.

X: Tell me how the software works.

T.F.: We just released version 2.0 (in July) as a new platform that builds on top of referral management, into accountable transition of care. When you walk out today of primary care provider [and you’ve been told to get an EKG], they give you a business card for a specialist. But they don’t know if you talked to specialist. Now the existing provider gets to see the entire lifecycle; if you have scheduled your appointment. It connects the providers together and lets them see where you are in the loop digitally, when they’re scheduling you, even with driving directions, and gives you health literacy information after discharge. For healthcare providers, it can monitor satisfaction rates and social media, monitor Yelp reviews, send social surveys, which can report back to the provider: You’ve seen three patients. This is how they rate you.

Patients get their information via e-mail or text messages; there is nothing to download or install. We have an iPad app for providers. It’s a SAAS-subscription model. It’s free to primary care providers, if you’re doing referrals out. The specialists pay for the referral.

X: How is your product different from other tech-enabled referral services? Who do you consider your main competitors?

T.F.: There’s not a lot of direct competition, having all of these feature sets. Generic EMRs still think of referral management as a one-way handoff. All they have done is taken an offline process [referral sheets] and made it digital. They will send the referral to a provider via e-mail, but that has not solved the problem. Yes, it’s not via fax machine, but it still gets lost in the inbox. It ultimately requires the front desk staff to call the referring-to doctor to get status updates and it doesn’t allow for easy doctor-to-doctor communication or easy transfer of X-rays.

X: What are your goals coming into the company?

T.F.: I was really interested in healthcare. I was intrigued by just how old it was. Most of the companies in the space were from the 1980s. The Internet Web-based software wave had never really taken hold in the medical space. They had old machines. There was no reason to do it. The ACA has really disrupted that market and forced people to do upgrades to software. I really do believe we can be a billion-dollar company.

X: What are your main challenges going forward? Any compliance/privacy/reimbursement issues?

T.F.: We’re regulated by HIPAA. I’m willing to put my infrastructure against everyone’s. We’re hosted in a tier 1 IBM facility; we have all the certifications. I also pay a lot of money for third-party encryption products. At some point there’s a good chance someone is going to break into our infrastructure. We know that it’s encrypted, so it should be worthless to them. It’s not when you’re going to get hacked, but what do they get when they do hack you.

We spend 15 percent of our R&D budget just on infrastructure security and monitoring. Most keep that at 5 percent or less. As we get bigger, the fixed costs will stay the same; we’ve front-loaded a lot of it. We paid for it before a single customer was on the system.

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