Drchrono is a technology startup that’s revolutionizing that way that office paper work is done in medical offices… and it’s free! Learn how this Drchrono came about and how it’s become one of the fastest growing companies in America.”
Welcome back I’m here today with Michael Nusimow and Daniel Kivatinos the cofounders of Drchrono, welcome today’s show.
Daniel: Thank you thank you having us.
Michael: Thank you for having us
So what is Drchrono?
Michael: Drchrono is a really innovative technology company in healthcare that’s based here in Mountain View in Silicon Valley. Our primary product is an iPad electronic health record that we launched right when the iPad first came out in April 2010 and it allows the doctor to use their iPad to do everything you need to do when they're at the point of care with the patient so when they're in the exam with the patient they don't need a computer or laptop they don't need any paper medical records of the prescription pad they can view all of the patient's information on the iPad their complete medical history and they can document their medical encounter that creates the medical and legal record it can even do all of their medical billing which funds the financial side of their practice and there's a lot of other workflows that are all supported on the iPad such as sending electronic prescriptions directly to any pharmacy in the US right from their iPad they can also do lab ordering through Request and Lab Core and third-party labs, they don’t have to give you a sheet anymore they can send the lab order directly to the lab so when you get there they take a specimen they can just do all of the ordering there and they’ll get your lab results so really everything is just designed to replace all the kind of awkward paper workflows that doctors used to use and I think it’s a much better work on the iPad because they're not using a computer. One encounter I had that really inspired me to start Drchrono was I was helping care for my father in New York City at the time and I took him to doctor visit I just noticed there were doctor visits where your doctors would have a thick stack of manila folders crammed full of paper and you only have 20 minutes, kind of paging through it figuring out what's going on, you know my father at the time was taking over 20 prescription drugs, that a lot of drugs to look at on paper and the doctors are seemed a little bit hapless they’re really overwhelmed by the paper and how much time it takes to go through all that data and in another encounter he went to Cornell Medical Center, really great medical center, one of the best medical facilities you can go to in the world, and the doctor was using a big kind of big-box EMR, like a more hospital focused system and the doctor spent 20 minutes with his back facing me and my father in the exam room just hacking away on this computer terminal, the computer was built into the wall and I could see him attracting with the software throwing care over his shoulder, my father was like, I can’t believe we waited three months this visit, the doctor never looked us in the eye he didn’t ask how I was doing, just kind of moving the case along with his computer and I saw what the software looked like, it looked like a really old this was around 2008 it looked like just really old software even for you know for 2008 it looked like you know Windows 2000 or software that was just like 10 or 15 years old with you know like the old window system dialogs and 100 text entries and 100 you know displays there, it just didn’t look very workflow oriented it really distracted the doctor. So that’s what we really focus on doing with the iPad it’s very natural, the doctor could hold the iPad keep eye contact with their patient there's not a lot of typing so it's an input device that you know is not super engrossing we use a lot of touch inputs and speech to text technology and we give all that away for free so we give that tool completely for free to the doctors they can download it from the iTunes App Store and start using it for free and we’re certified for the governments free use program which actually earns doctors who use our free software tens of thousands of dollars in government incentives and we monetize by taking over the doctors medical billing and practice management we give them software they do it would also sell them separate services to help them do all that for them and that's how we monetize which is something doctors are already paying several hundred to several thousand dollars a month for. So we’re giving them this really cool, mobile focused EHR for free and taking over their existing kind of boring back-office work to get off their hands and monetizing by doing that more efficiently.
Alan: Now I understand both you were college roommates?
Daniel: We were
Alan: and this business Drchrono did it start while you were at school still or after you graduated?
Michael: No, so yeah we both went to SUNY at Stony Brook on Long Island I studied computer engineering, computer science and I was in a lot of classes with Daniel, we were roommates for part of our time there, and we each went our own separate ways after school I went to go work at Bloomberg LP in New York City I was a software developer there for over seven years and I learned a lot about building software there, great customer service and how you know, a really successful large-company works, very inspirational, and Dan went to go work in a bunch of different startups, we reconnected guess about seven or eight years after college to start Drchrono.
Alan: What brought you from a New York City out to Silicon Valley?
Daniel: We were looking for the right investors while we were building the company. We built the company got several users several paying users got featured by Apple.com and a really interesting investor we started having a dialogue with a really interesting investor Y-Combinator. So Y-Combinator is really well-known in Silicon Valley and we flew out here we had a meeting with the Y-Combinator partners and they want to invest so we moved out here with the intention of going back to New York City after being here for three months so Y-Combinator has a program it's a three-month program they invest in your company you stay for three months and then it's up to you what you want to do whether be moved back to wherever you're from or stay in Silicon Valley. For us when we came here we realized there was a lot of really good talent pool of developers brilliant people and investors all around the area and essentially we saw value in that. It was very much a plug-and-play kind of environment where you can start your company have a lot of support and a lot of support infrastructure and we stayed we decided it was more beneficial for us to stay here
Alan: I’m visiting here today with Michael Nusimow and Daniel Kivatinos they’re the founders of Drchrono. it's a practice management system that that doctors use on their iPad. I need to take a quick break, I need to take a quick break and we’ll be right back after these messages.
Alan: Welcome back at visiting with the founders of Drchrono Michael Nusimow and Daniel Kivatinos and we’ve talking about how Drchrono came about it’s a medical practice piece of software that you can manage, doctors manage on the iPad but let me move into why should a doctor think it's so great to put their medical practice on an iPad, how does that benefit everyone?
Michael: I would say initially that the government has passed something called the high-tech act that was part of the really large healthcare reform package and they set aside $27 billion in 2008 2009 to actually payout incentives for doctors to adopt HR technology and there's also penalties that are starting as early as next year if they don't adopt the technology so to the individual doctor they’re really feeling a pressure to adopt the technology because of these government programs there's opportunity get huge incentives now and they also if they don't see the light they’ll also feel the heat from these penalties that are looming in the future. There are practical benefits to why the government is asking for HR technology I had my own personal encounters as a patient caring for family members that the majority of healthcare workflows happening on paper are very inefficient and just very troubling it's huge efficiency gains to be had and that's one reason the governments pushing for these-
Alan: So Michael I'm a doctor my ears perked up 28 billion of incentives, is that designed for letting me to transition to electronic software?
Michael: The initial grant for doctors to bill Medicare was $44,000 paid out over four years and for Medicaid it's over $63,000 paid out over several years and the reason the government chose that amount is because that's how much the estimated back in 2007 2008 that an EHR system would cost. If they go to a big company that usually sell systems to hospitals they would sell a system to doctors that cost about $40-$60,000 and there's cost for adoption in training so we give our EHR prduct away for free, in fact, doctors can download it right on their iPhone or iPad from the iTunes app store free and sign up in under a minute and start using the system so I think the government at the time didn’t count on innovative entrepreneurs coming out offering a free product that would meet these needs and kind of the existing vendors in the spaces been around for you know 10 to 20 years in the really big box vendors they primarily sold hospitals didn't really like selling the small practice doctors they weren't geared to it but the systems are quite expensive so I think that something that we really offer doctors I'm really proud of is that we just give them something that they would normally would spent $40-$50,000 on they get it for free right on their iPad and they can get that incentive money just pocketed and essentially reinvested in other parts of their practice.
Alan: Free is a good thing and imagine it helps make an easy sale there. How big are you right now?
Michael: So we have 33 people here in Mountain View and another 50 people who are outside contractors and consultants who work remotely and they do a lot of support in supporting medical billing for the doctors is kind of outsourced contractors,
Alan: Now you made the Inc. 500 fastest-growing company list and that was is sued in 2014, so where do you anticipate you’ll be in a 3-5 year window?
Michael: That's a really great question we’re really proud to making 500 list I really like to thank all of our customers out there because you know we have a upsell product we don't just give her product way for free. So I’m really grateful for all the doctors who buy our paid services to take over their medical billing because that's what allowed us to grow our revenue so quickly and I would say our goal is to really keep growing as fast as possible kind of true North for us what I was considered because me and Dan are both software developers we really care about the products there's a lot of technology things we focus on just making the product better adopting new technologies and make them relevant for doctors to start using day-to-day in their practices and true North is really to keep investing in product really keep growing or revenue if we made a 500 list again next year will be doing amazingly well if you keep up in 1800% growth you know every three years will be doing phenomenal if we can maintain that and also just personally I really care about improving our customer services while we're a real tech focused company but I think unlike a lot of other Silicon Valley tech focused companies in the healthcare space service is incredibly important, doctors and healthcare providers really need a lot of support and training a lot of them are coming from environments where they were just using paper and didn't even have a computer in the office and we’re introducing really cutting-edge technology to them so you have to give them a lot of training and support to get up to speed and also I think to be successful in her industry we just have to raise the bar on supporting our customers and training them better and ideas something we've improved amazingly on in the last year in the kind of shoes in a revenue numbers no doctors sign up at this month-to-month was great Amazing technology and grab their attention to get in the sign-up and we kind of have to fulfill the contract by giving them really good supporting training to keep them paying us every month because if we don't. After few months and we won't really keep earlier revenues in a sustainable way.
Alan: I'm visiting here today with Michael Nusimow and Daniel Kivatinos they’re the cofounders of Drchrono its a medical practice software that doctors can put on their iPad. I need to take another break and we'll be right back after these messages.
Alan: Welcome we’ve been visiting here today with the cofounders of Drchrono Michael Nusimow and Daniel Kivatinos we’ve been talking about how the doctors being allowed to put his whole medical practice belaying and patient records on an iPad of which when you started this is really cutting-edge, how do you stay ahead of the curve here to keep putting more more things on the cutting edge I'm just going to throw out a question, Apple talks about a watch coming-out or does this wireless that is basically saying we can eliminate the computers altogether, are you for that in the company, do you see a vision of that down the road or how do you stay on the cutting edge?
Daniel: Sure I can take this question so I would say that technology moves at a really rapid pace in the last hundred years you went from no computers basically effectively nothing out there to what we have today and every single year leaps and bounds of progress are made whether it be the iPad whether it be the computer whether be a tablet or iPhone one thing that just came out was Apple had produced something called Health and its and app on your phone and what this does this connects all of these Internet of things all these devices around you blood pressure cuffs glucose meters software producing software tidbits all these things are pulling you into this one way that you could take a data and do interesting things with and I see the Internet of things becoming the next wave of interesting interactions for us as human beings You can have whatever it might be a sleep apnea device and you can pull that into your iPhone and this is sort of unheard of before right so you is the as an individual you're your health becomes more accountable, so this is one of the new wave sets happening and it's it's hard to predict exactly what these waves are going to be but they keep happening year after year and we see what's happening in the sort of say this is the future so we I personally believe and Michael believes that the Internet of things all these things coming together taking that data, giving it to the individual to share with their physicians, it's definitely something that’s happening right before your eyes in the Apple watch has a pulse right so you literally will wear an Apple iWatch and you'll get a pulse rate on that which you have in your iPhone you can share it with your doctor never had that before.
Alan: And it just seems that wearables are the next best thing you know the Jawbone did their Up24 Apple with the iWatch now they're talking a companies coming out putting a computer right into the textiles that you wear so you’re developing this and keeping the medical practice, the medical industry fluid with the rest of technology, and what are some of the difficulties that you’re encountering as you’re trying to cross platforms between the iPad back in 2010 to Google Glass today? Is that easy to stay up with?
Michael: I think it's really hard to build on these cutting-edge platforms but it's also really valuable and being a tech focused company that's one of our greatest advantages over other healthcare companies trying to sell software to doctors. We’re always building really early on the next cutting-edge wave of technology so we launched our iPad EHR in April 2010 and got featured by Apple really early because nobody else was building on the platform in the healthcare space at that time and I feel like now for over four years later in 2014 a lot of other of the large vendors are finally starting to move to the iPad is a platform but we have a huge advantage cause we have a very mature product that's been battle tested and field tested and used by doctors for the last 4 1/2 years and we keep improving it every month. So we just have a 4 year head start and even if the company has billions of dollars in reserves they’re not going to be able to make up for that four years of time by throwing a lot of resources at it in and catch up in a very short period of time and setting that huge advantage of us but it's very hard to abilities early platforms you face just technical challenges because people haven't done it before and healthcare you have to make sure that the security and compliance is up-to-date and even doubt and kind of fear uncertainty and doubt in the market where I remember when iPad first came out there was huge traction among doctors 10% of the preorders, there were three hundred thousand preorders before the iPads came out in April 2010 and 10% of those preorders were to doctors in the US so there were 30,000 physicians who had an iPad on the first day of launch you could download our app and start using it. That was a really great early market to have but they still were bit skeptical though can I use this in my practice to treat patients or is it just kind of a toy, kind of like a real cool thing to play around with or is it a real powerful business tool. And I think now nobody questions iPad is ubiquitous it's replacing laptops it's everyone has one people use it at work people use it everywhere but at the time there was this data is it just the next fun kind of iPod device or is it a really powerful tool you can actually use to treat patients using it in business.
Alan: So when you’re dealing with the healthcare professionals, I would view, and this is just me, that that they would not necessary be early adopters how difficult is it to take the technology to them and encourage them to adopt that within their organization.
Michael: I would say I think physicians are really great early adopters of tech. They’re affluent they have money they’re always buying the latest gadgets like every new iPhone and iPad and you know the Apple watch I think you know for every physician in the US is in abide gold Apple watch right when they first come out so I’m really excited about that platform and I but I think when you're doing with the healthcare organization and healthcare industry it's not just the physicians there's also their staff members and nurses and lots of other people who you know and the healthcare system I like to think of like an iceberg when you're it's being seen by a physician that's the 10% of the iceberg above the water that you see in the other 90% of healthcare dollars in effort and what people are doing in healthcare is once you leave all the paperwork all the filing all the medical billing all the accounting all the lab work so that 90% of the iceberg as I think where the biggest obstacles to adopting newer technology is so the doctors I think are really big advocates over 90% of your physicians own an iOS device an iPhone or an iPad so they’re definitely early tech adopters they’re with it they want to use newer tech and it's just that other 90% of kind of hidden below the waters all the medical billing there’s these huge billion dollar companies you’ve never heard of who just operate on just processing your medical billing claims and moving them around the insurance companies and that's where I think the part of the healthcare system repented driving forward when we’re trying to adopt the technology.
Alan: So if a person wants more information on that Drchrono where would they go?
Michael: So they can go to our website Drchrono.com D-R-C-H-R-O-N-O.com or they could just search for EHR which is short for electronic health records in the iTunes App Store we’re the first result there, or search for Drchrono in the app store and download our apps.
Alan: I’ve been busy today with Michael Nusimow and Daniel Kivatinos, they are the cofounders of Drchrono. Thank you for being on today’s show.
Daneil: Thank you
Michael: Thank you
Alan: We’ll be right back after these messages