MedicalRecords.com Looks to Cash In on Health Software “Gold Rush”
What exactly is MedicalRecords.com? A health database? A doctors’ community? An encyclopedia site? Not exactly. It’s a lead generation startup for the electronic medical records sector. Sound boring or cryptic? Here’s why it’s not.
The U.S. government set aside about $27 billion through 2009’s American Recovery and Reinvestment Act to incentivize doctors to move patient medical records to an electronic system. There are about 750,000 doctors, dentists, and chiropractors who qualify for the money, and only 20 percent of the market has adopted electronic medical records (EMR). To top it off, it can be a confusing space: there are about 400 different EMR software makers, many with similar sounding names, says MedicalRecords.com founder Durjoy “Ace” Bhattacharjya.
The startup, which works out of Avalon Ventures’ office in Cambridge, MA, has developed a platform for connecting doctors with EMR providers in a meaningful way. MedicalRecords built a database of all the companies in the sector from the ground up, says Bhattacharjya. On MedicalRecords.com, doctors fill out some information on their practice and what kind of technology they’re looking for, and MedicalRecords.com’s engine finds a few EMR software makers that fit. MedicalRecords.com calls the doctor’s offices to confirm their identities and what it is they’re looking for, and then sells that doctor’s contact information as a sales lead to the software makers.
It’s a pricier sales lead, at $150 to $300 apiece, than what you might see in other software niches, says Bhattacharjya. But “nobody’s figured out how to solve this problem [of selling the software to doctors],” he says. “Some of these guys are GE, and they still can’t figure out how to get a doctor to buy their stuff.” They’re willing to pay to get in front of doctors who have actually started the shopping process, says Bhattacharjya.
Doctors aren’t exactly known for being an early-adopter, tech-savvy population, says Bhattacharjya. (He would know; he comes from a family of them.) Many are reluctant to take their records digital because they’ve gone on for decades with the paper format, says Bhattacharjya. But the incentives are there: the $27 billion in federal funding breaks down to about $44,000 for each practice that has implemented and used the software in patient care—and starting in 2015, the government will dock the Medicare and Medicaid reimbursements of those who haven’t made the switch.
MedicalRecords.com is looking to become a comprehensive, unbiased electronic medical records database, and to match doctors with the technology that best fits their need. It won’t promote EMR purveyors to doctors for an inflated lead price, says Bhattacharjya. “We want it to be ethical,” says Bhattacharjya, though “it’s less profitable to do it that way.” That plays into the company’s broader mission of becoming a hub of all things EMR.
“Our idea is if we could build this as a platform vehicle, it’s a lot more interesting,” says Bhattacharjya. “We’re taking a very long-term approach to this.” So far, MedicalRecords.com has gotten about 7 percent of electronic medical records providers to agree to buy its leads.
About a year and a half ago, Bhattacharjya left his gig in marketing at Athlete’s Performance, a company offering athletic training services via corporate wellness programs, to start MedicalRecords.com. He initially seeded it with $200,000 of his own money. The startup now has about 60 percent of a targeted $500,000 funding round committed, from angel investors including Ty Danco and Peter Bordes. (MedicalRecords’ landlord Avalon is not an investor, though.) Mark Slater, an investment banking veteran who helped take companies like ATG and Internet.com public while working for Hambrecht & Quist, is MedicalRecords’ chief revenue and partnership officer.
Last January, MedicalRecords.com went live with its EMR database and started collecting doctors’ information that it passed on for free to software makers. In August it started selling the leads. The company plans to serve as a lead-generation platform for other software purchases doctors may make down the line, like electronic insurance claims management. MedicalRecords also will buy the information from other sites that get inquiries from doctors seeking EMR information—as a sort of affiliate marketing business.
The next lead generation function MedicalRecords.com will roll out is in the education sector. The company says it will take inquiries from people looking for information on becoming certified EMR technicians, and will sell those leads at $50 to $75 a pop to send the information to schools offering the training programs.
The startup has three team members in Boston (Bhattacharjya, Slater, and Blue Cross Blue Shield veteran Arjun Maini), two in New York, and one in Seattle. And it has no immediate plans to raise a big venture round, as lead generation is a very capital-efficient business, says Bhattacharjya. But it does have plans to become very big.
“There are 400 vendors” in electronic medical records software, with new ones sprouting up all the time, says Bhattacharjya. “It’s like a gold rush.”