BlueTree Network Co-founder Launches Healthcare App Venture

[Updated 2/25/14, 3:16 pm. See below.] Epic Systems veteran Reggie Luedtke is launching his second healthcare information technology startup, a venture that he hopes will coax healthcare providers to share more data and break down bureaucratic divisions across the industry.

The new company, called Branch2, wants to build software that can connect the various parts of the healthcare system, making it easier for hospitals, clinics, and health insurance companies to share more data while still following regulations like HIPAA, Luedtke said.

The startup plans to build applications in collaboration with healthcare customers and also run the IT infrastructure that connects the different parts of the system.

Getting health systems and health insurers to share data is easier said than done, but Luedtke thinks it’s a gap that needs to be bridged.

“We’re not going to force it to be open, but we’re going to give the ability for the data to be linked across the two sides more easily,” Luedtke said.

Branch2 has two full-time and 14 part-time staff and will ramp up hiring after securing investment. The company has begun raising money and has some early interest from investors, Luedtke said.

Branch2 is partnering with two Madison software companies, MIOsoft and Hardin Design & Development, with both taking undisclosed equity stakes in the startup. The other healthcare startup that Luedtke co-founded, the IT contractor job site BlueTree Network, also has an equity stake of less than 1 percent in Branch2, BlueTree co-founder and president Ted Gurman said. [Added size of BlueTree’s equity stake.]

MIOsoft is an enterprise software and data services provider whose products include applications for healthcare quality feedback and analytics, a product line that serves more than 100 hospitals. MIOsoft will perform back-end application work for Branch2, host and manage the API database, and analyze data for customers.

“What this layer allows is for multiple applications to share the same underlying infrastructure and provide a way for them to basically plug in,” said Bert Barabas, MIOsoft co-founder and chief technical officer. “It’s like [what] an app store would allow you to do for your iPhone. Here it’s for healthcare.”

Hardin Design & Development will handle development of the applications, and Branch2 is considering partnering with additional software development companies. Branch2 could also partner with Madison software developers and entrepreneurs, such as the consultants on BlueTree Network, if they have ideas for healthcare apps, Luedtke said.

Reggie Luedtke is co-founder of BlueTree Network and Branch2.

Reggie Luedtke is co-founder of BlueTree Network and Branch2.

“They may decide they want to create an application on our platform,” Luedtke said. “I really think that there’s an opportunity for quite a few companies to be created that specialize in these specific apps that they know really well.”

Branch2 is seeking healthcare providers with areas of expertise, and the idea would be to collaboratively create an app that enhances their best practices for patient care, Luedtke said. Potential customers and software developers will fill out an application form that gets vetted by Branch2 before it decides to work with them.

“We’re looking for customers that have solutions rather than problems,” he said. “The last thing we want to do is build an app built on an unfounded idea.”

Luedtke predicts Branch2’s early app development will focus on sharing patient data—creating “funnels or passages between the silos” in the industry, as he put it. (But he’s quick to note that Branch2 doesn’t intend to compete with Epic or other electronic health records companies.)

Branch2 products could also play in the growing movement around the “Internet of Things,” which is slowly making its way into healthcare, Luedtke said. Examples might include Branch2 software that works in tandem with computer chips embedded in medical devices or chips carried by doctors that monitor the amount of time spent face-to-face with patients.

The customer would own the application and receive a portion of the revenue if it sells to other organizations. Healthcare systems could hire Branch2 to build an enterprise-level app, or on a smaller scale, individual physicians could pitch an idea and own the rights to the resulting app, Luedtke said.

“[Branch2’s] network can help facilitate the selling and distribution of that application with other health systems,” Luedtke said. “That value, that solution that was found in one place can be leveraged in other places.”

Luedtke recognizes that healthcare providers might be reluctant to sell their app to local competitors. He said Branch2 won’t require customers to sell their apps for use outside their respective organizations. For healthcare systems that do want to market the product, Branch2 will target the distribution of the app to peers that aren’t direct competitors.

“It’s really at their own comfort level to decide how much [data] to share, who to share with, who the app will be sold to,” Luedtke said.

But he pointed out that health systems will likely invest a lot to solve these problems, and selling the related apps can generate revenue that makes the health system more competitive and improves patient care.

Branch2’s competitors include Explorys, a Cleveland company that provides a software platform for health systems to manage and analyze their vast volume of patient data. But Explorys doesn’t have a collaborative app-building service nor a model similar to Branch2’s, which will attempt to bring together software developers, entrepreneurs, and the healthcare industry.

“Being in the healthcare space and working at BlueTree, we know that there are problems that need to be solved at these health systems. We also know there are health systems that have done amazing work that could apply that amazing work to other health systems,” Luedtke said. “But as far as I know, there’s no good model to do that today.”

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