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Business Observer Thursday, Feb. 19, 2009 12 years ago

Prescribed by the state to help

The government will penalize doctors who don't shift to electronic records, but Brian Lichtlin is here to help.
by: Jean Gruss Contributing Writer

Brian Lichtlin is here to help Doctors comply with records law.

Brian Lichtlin liked what he heard from Barrack Obama when the president came to Fort Myers recently.

Obama told a crowd that the stimulus bill would include provisions to computerize health-care records. Democratic legislators delivered a few days later with billions of dollars of incentives to push doctors to abandon paper records.

Lichtlin, 37, the chief executive officer of MedAppz, recently established a revenue-sharing partnership with Naples-based ASG Software Solutions to provide Web-based electronic record-keeping applications for doctors. MedAppz and ASG hope to be among the winners in the race to help doctors make the shift to electronic records.

Lichtlin recently signed a deal with the Collier County Medical Society that will provide the organization's 500 doctors with free electronic prescription capabilities that link their practice with insurers and pharmacies. Currently, only about 100 doctors in the Naples area use e-prescriptions.

The government is taking a carrot-and-stick approach to push physicians to adopt electronic medical records and technology. This year, Medicare rewards doctors with a 2% bonus on all charges if they use electronic prescriptions.

In a few years, doctors will be punished with a 1% reduction if they don't use electronic prescriptions.

“You know who is our biggest competitor? The status quo,” says Lichtlin. Only 15% of ambulatory care doctors have converted to electronic records and Lichtlin says cost and disruption are the two biggest hurdles.

But issues of privacy and fears of government intrusion into the health care field are also on a few doctors' minds, says Joseph Gauta, president of the Collier County Medical Society.

Whatever the reasons behind doctors' reluctance to move away from paper-based records, there's little doubt the system now is cumbersome, costly and perhaps even dangerous because of human error. “It's archaic,” Lichtlin says. “I see it as a busted system.”

As easy as Internet banking
Unlike many larger competitors that install software applications on doctors' computers, MedAppz provides Web-based electronic recordkeeping. The idea is to make it so simple that almost anyone can use it.

“If you can use online banking, you can use our product,” Lichtlin says.

The banking analogy is a good illustration because that industry has blazed the trail by shifting vast quantities of paperwork among payers and payees in an ultra-secure way. Besides electronic prescriptions, MedAppz offers document management, billing and scheduling systems. The company doesn't disclose financial information.

On average, the cost of using MedAppz' full suite of applications is $500 per month. Because it's all Web-based, there's no software to buy and that price includes all updates and technical support.

Lichtlin says the cost hasn't been a major issue for most doctors. Instead, physicians are reluctant to make the shift to electronic records because they're worried about the disruption it might cause if the transition doesn't go smoothly. That's the case even when MedAppz offers its service for free.

That's where the government incentives or penalties come in. Medicare already offers to add 2% to doctors' charges if they use electronic prescriptions. Eventually, that 2% incentive will turn into a 1% penalty in a few years.

With Obama's push for electronic records, those incentives or penalties could have a meaningful impact on doctors' practices. Lichtlin says Obama's plan isn't fully fleshed out yet, but he expects some of the billions of dollars allocated to that effort to filter to the states. Some states have started to look at incentive programs because Medicaid, the states' health care program for the poor, has become a huge cost.

Lichtlin says his company is trying to stay out of the political debate over cost control and a national health care plan. “We're not politically involved at all,” he says. His objective is to “fix the problem in the doctors' office first.”
Helping doctors shift from paper to electronics is “a totally separate issue” from the politics of health care, he says.

Partners with ASG
To increase its reach, MedAppz recently partnered with ASG Software Solutions, the software giant founded by Naples entrepreneur Arthur Allen. ASG's specialty is handling massive amounts of electronic data for companies such as American Express, Coca Cola and Toyota. It has more than 1,000 employees in 70 offices worldwide.

Already, ASG manages information technology for over 100 hospitals, including Florida Hospital, one of the largest hospital not-for-profit companies in the U.S. “It's an extension of what we do for hospitals today,” says Jimmy Augustine, vice president of marketing for ASG.

“I've been talking with Art Allen because he's got this huge distribution channel,” says Lichtlin. Now, ASG's 200-strong sales team will sell MedAppz programs. Lichtlin and Augustine say ASG and MedAppz will split revenues evenly. If the partnership is successful, ASG may acquire MedAppz. ASG has grown by acquisitions, doing more than 30 in the last few years. Augustine equates the partnership between the two companies as “dating before getting married.”

Collier docs' free e-prescription
Gauta, the president of the Collier County Medical Society, says MedAppz will gain a foot in the door of some 500 doctors in the Naples area. Gauta, a gynecologist, will sign up his own practice for the program.

By offering e-prescription technology for free to doctors who belong to the society, MedAppz will have an opportunity to sell its other services to them. Meanwhile, society members get the benefit of a free service that will help those who take Medicare patients get a 2% bonus.

“We're going to learn a new language,” Gauta says. “Once that hurdle is achieved, then I think the physicians will start to notice a big improvement in their practices.”

What's more, Gauta says rival systems the society's doctors looked at are too expensive. “Some of the others are $2,000 to $3,000 just for the setup,” he says.

While Gauta expects most of the organization's doctors to adopt the new technology, there are some who will not. Some are physicians on the verge of retirement and others are against electronic medical records because of concerns about what the government will do with the information.

“Up to now, we do know this: Medicare and large private insurers are already using some of this data through billing to formulate their own quality assurance program,” Gauta says.

Gauta says some fears about government control are well founded, but electronic prescriptions is a way for doctors to test the waters without jumping in completely. If it works well, MedAppz will be able to hold up Collier as a community that embraced the new technology.

President Obama, take note.

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