Hello Health Deploys $10M To Expanding Patient-Funded Health Records

3/13/12Follow @arleneweintraub

When Westfield, NJ-based internist Peter Weigel began thinking about switching from paper charts to electronic medical records, all sorts of tech salesmen appeared in his office with pitches that seemed to good to be true. They told Weigel if he paid them to implement electronic records in his practice, he would be reimbursed under the government’s “meaningful use” regulations, which offer incentive payments to doctors who use such systems. “They said, ‘Yeah, there’s a price, but you’ll get it all back from the government,’” Weigel recalls. “It was worrisome.”

Then Weigel got wind of Hello Health, an electronic health record (EHR) platform that’s free for doctors—because it’s the patients who pay for it. Hello Health, which is a New York-based subsidiary of Myca Health in Quebec, Canada, has spent the last year or so rolling out an EHR system in the United States that patients can opt into for a fee that averages $36 a year. About 80 physicians have signed up for Hello Health so far, including Weigel, who estimates that 40 percent of his patients have signed up for it.

Now Hello Health is gearing up for a major national expansion, which will be largely subsidized by $10 million in venture funding the company announced it raised on Feb. 28. The funding—from a group of private investors and Sandbox Industries, a venture fund sponsored by BlueCross and BlueShield—will help the company branch out beyond the New York City area, where most of its current customers are, says Stephen Armstrong, vice president of marketing.

Hello Health has undergone a drastic evolution in the four years since its founding. The company’s initial goal, Armstrong says, was to hire its own physicians and outfit them with EHRs that would make the practices ultra-efficient. The company went so far as to set up its own clinic in Greenwich Village and hire a doctor. “But we quickly made a decision that we should stick to technology,” Armstrong says. So Hello Health converted the clinic into a small office and began perfecting its EHR platform.

Hello Health was designed with the needs of the patient top of mind, Armstrong says. Patients can use the portal to schedule appointments, keep track of their prescriptions, and send questions to their doctors via e-mail. Doctors can then consult the entire panel of patients to address specific groups who may have special needs, Armstrong says. “If they have a cohort of diabetics, they can use the platform to proactively send messages to them saying ‘it’s time for a checkup,’” Armstrong says. “You can start to promote greater frequency of visits when it’s clinically appropriate.” Hello Health also designs Web pages for the doctors in its system, and handles the conversion from paper to electronic charting.

Most EHRs offer similar capabilities, but what makes Hello Health different is it’s not only free for doctors, it also allows them to generate bolt-on revenue streams. Armstrong says Hello Health shares about one-third of the subscription fees paid by patients with the doctors. The company also offers video-chat capabilities, which doctors can use to schedule remotevisits with patients. Because the video visits are not actual exams—and therefore not payable by insurance—doctors can charge patients directly for them, and have the payments processed through Hello Health. “We see this as the evolution of the relationship between the doctor and the patient,” Armstrong says. “And it offers doctors a way to generate more revenue.”

For physician Weigel, who runs his practice in partnership with his wife, the small conveniences offered by Hello Health have been especially appealing. “Patients who spend their winters in Florida or their summers in Maine can easily access their medical records online, so they can show them to doctors there,” he says. And several of his New Jersey patients have been taking advantage of the ability to schedule appointments online, he says. “The majority are making appointments on Sunday night, so they don’t have to wait until the office opens on Monday. That has been helpful.”

As Hello Health expands nationwide, it will likely run up against competition from a variety of sources. Several large hospital groups and insurance companies have launched their own EHR systems, and the universe of independent players is growing, too. There are major players, such as Athenahealth (NASDAQ: ATHN) and eClinicalWorks, plus a host of more specialized startups. On the appointment-scheduling side of the equation, for example, Hello Health competes with its New York neighbor, ZocDoc, which has raised $95 million since it was founded in 2007. Then there’s Practice Fusion, a San Francisco-based EHR company that has raised $34 million in venture capital to expand its platform, which is fueled by advertising. Armstrong isn’t worried. “Practice Fusion is free but the doctors are being asked to look at advertising,” he says. “The shortcoming there is that it doesn’t offer revenue-generating opportunities for doctors and it doesn’t offer the strong patient engagement.”

Hello Health is hoping to boost its patient-engagement capabilities via a partnership it formed in December with San Diego-based electronics giant Qualcomm (NASDAQ: QCOM). The two companies are working together to develop a host of smart medical gizmos that can collect information from patients and beam it wirelessly into their EHRs. Hello Health is working on the initiative with Qualcomm Life, a new subsidiary that’s developing a hub of interconnected medical devices. “Say you step on a scale in your home that has a wireless sensor,” Armstrong says. “The hub can take that information and bring it up into the cloud. We can snag that data and bring it into the Hello Health platform.”

In February, Hello Health and Qualcomm Life appeared together at the Healthcare Information and Management Systems conference, where they manned a pavilion that used a dashboard display to showcase a variety of wireless, Internet-connected medical devices. “The dashboard is a great example of how biometric data can be aggregated and displayed,” says a Qualcomm spokesman in an e-mail.

Armstrong says that Hello Health will be using its new funding to expand its marketing team, so it can roll out its product in all 50 states. The company is also looking for ways to enhance the platform’s capabilities in areas such as billing, Armstrong says. He adds that the company is focusing on marketing the platform to small, independent practices that have between one and five physicians. “These are the doctors that don’t have a lot of time to deal with technology and that question whether they can afford an EHR, even with the government subsidies,” he says.

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