Since launching in 2014, Redox, a Madison, WI-based tech startup, has worked with other healthcare software companies to set up data feeds between their applications and the computerized patient records systems used in hospitals and clinics across the country.
Redox has now begun selling its digital tools under a slightly different business model, where healthcare providers, rather than software vendors, pay to use Redox’s products for exchanging patient data.
Brigham and Women’s Hospital in Boston announced on Wednesday a multiyear agreement with Redox to use the startup’s tools to connect the Brigham’s electronic health records system with outside software applications.
Niko Skievaski, co-founder and president of Redox, says his company’s contract with the Brigham represents the first enterprise-wide sale Redox has made to a health system.
“In most cases, the [software] vendors are [Redox’s] customers and they’re using us to connect to the health system,” he says. “With the Brigham, that’s flipped. The Brigham is the customer, and the vendors will be the folks the Brigham wants to work with.”
Since 2015, the Brigham has been using software developed by Verona, WI-based Epic Systems to manage the hospital’s patient records. (Redox’s three co-founders are all former Epic employees.) Epic’s software allows doctors, nurses, and other healthcare workers to document information on patients, and to take actions such as ordering medications, scheduling appointments, and billing for care.
The Brigham, along with Massachusetts General Hospital and several other Boston-area healthcare providers, are members of a consortium known as Partners HealthCare. Epic’s software is in use (or currently being installed) at nearly all hospitals and clinics across the Partners network. It’s projected to be a $1.2 billion project, according to a Boston Globe report.
All of Partners runs on a single deployment, or “instance,” of Epic’s software, meaning each patient has one record that can be viewed and updated by authorized users at any location within the consortium. That’s significant because while the Brigham is the only Partners hospital that has agreed to use Redox’s tools, the startup would not need to set up connections to a separate instance of Epic if, say, Massachusetts General Hospital decided it was interested in also becoming a customer of Redox.
“We hope that other health systems, the wider Partners group included, see this as an example of how to scale digital transformation at their organizations,” Skievaski says.
Redox has said its application programming interface can be used to talk to software developed by Epic, as well as a host of competing electronic health records (EHR) vendors, including Allscripts (NASDAQ: MDRX), Athenahealth (NASDAQ: ATHN), and McKesson (NYSE: MCK).
Michael Greeley, general partner at the Boston-based venture investment firm Flare Capital Partners, says companies like Redox, which fall into the category of digital health “integration,” provide an important link between large EHR vendors’ systems and other software hospitals want to use. (Greeley and Flare are not involved with Redox.)
“You need connectors, and Redox does that,” Greeley says.
Redox, which Skievaski says now has about 45 employees, has installed its tools at 150 health systems. More than 100 “third party” software applications—care providers and EHR vendors being the other two parties—connect to providers’ records systems via Redox, he says.
One of them is ER Express, an Atlanta-based startup that has developed software allowing patients with non-life-threatening ailments to virtually “check in” to an emergency room or urgent care clinic and wait at home until shortly before a clinician is ready to see them.
Skievaski says the Brigham will pay a flat yearly fee to use Redox’s software, and the startup could potentially charge the hospital a small additional fee, based on the number of third-party applications the Brigham uses Redox to share data with. The companies that develop those software products will not need to pay a separate fee to Redox, he says.
Redox’s software will allow the Brigham to “efficiently and securely share information and data that are essential to supporting the development of novel technologies that have the potential to ultimately improve” patient care at the Brigham, says Adam Landman, the hospital’s chief information officer, in a prepared statement.
Skievaski says that his startup won’t exclusively target networks of hospitals and clinics as customers—having other healthcare software vendors pay to use Redox’s tools helped the company gain traction early on, and appears to be a viable business model. But selling directly to health systems is something Redox will likely do more of in the future, he says.
“When we work with vendors … our strategy [is] to get in as many health systems as quickly as we can,” Skievaski says. “Vendors provide us breadth, and health systems provide us depth. The new thing that we’re doing is going deep with more and more health systems. [The Brigham] is number one that we’re making public, but there’s going to be more to come.”