Axial Exchange Aims to Keep Patients Healthy Outside the Hospital

8/4/14Follow @wroush

The United States has some of the best hospitals in the world. That’s why 800,000 international patients come here every year seeking specialty care, according to data from Chapel Hill, NC-based Patients Beyond Borders.

If only the great care most patients receive while they’re inside the hospital could continue after they’ve left.

Too often, patients are discharged from hospitals without the information or support they need to make a full recovery. They may lack key details about their condition or post-discharge care procedures. They may not realize how important it is to take their medications or come in for follow-up appointments and tests. Their primary-care doctors may not even have a record of what happened to them while they were in the hospital.

All of those problems contribute to a disturbingly high rate of rehospitalization, which, not surprisingly, has been one of the major drivers of rising healthcare costs in the United States. Nearly 20 percent of Medicare patients are readmitted to the hospital within 30 days of being discharged, according to a study in the New England Journal of Medicine. More than 50 percent of Medicare patients who have surgery while in the hospital are readmitted, or die, within the first year after discharge. All these unplanned admissions cost the nation an estimated $25 billion a year.

In short, a lot of the good stuff that happens inside hospitals gets undone through inefficiency, ignorance, and neglect. That’s the big problem Axial Exchange wants to solve—and it aims to save hospitals and healthcare organizations a lot of money in the process.

The Raleigh-based startup makes mobile apps designed to keep patients involved in their own healthcare after they leave the hospital. The apps, which are available for iOS and Android devices, include tools for medication management and appointment scheduling. They also connect to monitoring devices such as glucometers, blood-pressure cuffs, scales, and fitness trackers, and send the data back to doctors. There’s even reference information and educational materials from the Mayo Clinic.

“There’s a pretty astounding statistic: that while you are in the hospital you retain only 4 to 11 percent of what you are told,” says Joanne Rohde, chief executive at Axial Exchange. “When you get home and you’re on your own, all of a sudden you don’t know anything. So we have that baseline education component. And we’re networked, so that if you are taking care of an elderly relative you can still read everything. That’s really important, because no one ever gets well on their own.”

Three views of Axial Exchange's flagship mobile app: the home screen (left), a list of devices and services that connect with the app (center), and a personal health-tracking screen designed to help patients monitor headache occurrences.

Three views of Axial Exchange’s flagship mobile app: the home screen (left), a list of devices and services that connect with the app (center), and a personal health-tracking screen designed to help patients monitor headache occurrences.

Axial Exchange is still young—it was founded in 2010—and small (its headcount is just 14). It faces an uphill battle in trying to sell consumer-facing technology to hospitals whose IT experience is often limited to claims management systems and electronic health records. But it’s got some veteran technologists from Raleigh-based Red Hat and the Swiss financial services giant UBS at its helm, it’s backed by more than $10 million in venture funding from Connecticut-based Canaan Partners and the Mayo Clinic, and it’s an oft-mentioned part of Raleigh’s growing downtown startup scene. And there’s one huge trend working in the startup’s favor: the transition in the U.S. from a fee-for-service medical economy to bundled, performance-based reimbursement.

This change began before the passage of the Affordable Care Act, aka Obamacare, and could ultimately be just as important, especially when it comes to costly problems like hospital readmission. To reduce rehospitalization rates, CMS, the Centers for Medicare and Medicaid Services at the Department of Health and Human Services, has imposed a system of escalating penalties for poor performers. Hospitals whose readmission rates were in the bottom quartile nationally in 2013 saw their Medicare reimbursements drop by 1 percent. This year, CMS raised the penalty to 2 percent, and in 2015, it will go up to 3 percent.

“Given the margins some hospitals work on, that could literally put hospitals out of business,” Rohde says. So there’s a growing incentive for hospitals to make sure patients stay healthy after they walk out the door.

On top of that, Rohde says mobile apps like Axial Exchange can increase engagement and loyalty among privately insured patients, who are the customers hospitals really want to capture. Big national healthcare providers are buying up smaller regional hospital systems at a rapid clip, and the more of these high-paying customers a given hospital’s overall population includes, the more leverage it may have in merger talks. “What we see when we talk to hospitals,” Rohde says, “is this desire to own as much of the paying market as possible, as Step One, and then to try to figure out how to keep them well and happy, as Step Two.”

Part of the idea for Axial Exchange came from Rohde’s own travails as a patient.

As chief operating officer at Red Hat, the enterprise open-source software giant, Rohde was assigned in 2006 to investigate vertical industries such as healthcare where the company might expand. “I very quickly learned that open source wasn’t going to cure healthcare, but I became very intrigued with the problems of interoperability in healthcare,” Rohde recounts. “We decided that the path for the company was to buy JBoss [a maker of open-source middleware] and the rest is history. That would have been the end of it, if I had not gotten quite ill and been plunged into the healthcare abyss.”

At first, Rohde’s doctors thought she had a textbook case of fibromyalgia, in which joint and muscle pain spreads throughout the body. Then she got so weak she couldn’t walk up the stairs—which was strange, since fibromyalgia isn’t a deteriorating illness. Eventually, after shuffling from doctor to doctor—10 in all—without much improvement, Rohde discovered that she had a House-like combination of problems: a fungal infection that was keeping her from absorbing vitamins and minerals, plus Lyme disease.

“In the end, it was a couple of simple tests that diagnosed me, and I wondered what was wrong with the system,” Rohde says. “I spent a year getting intravenous vitamins and minerals, three hours a day, three times a week, so I had lots of time to think. I decided I wanted to do something about the problem. I decided that the only way we are going to change the healthcare system is for consumers to become more involved in their own care.”

This was the late 2000s, way before the current revolution in consumer health apps got started. At first, Rohde thought the biggest problem holding back progress toward better patient engagement was the inability to share clinical information cheaply between patients, doctors’ offices, and hospitals. So the startup’s first product was what she calls an “open source interoperability engine,” designed to connect the back offices of various providers and payers.

After a few sales calls, “It became pretty obvious that from a business perspective the model was dead on arrival,” Rohde says. “The interests-that-be very much wanted to keep their walled gardens up.” (There’s still a perception at the top levels of healthcare organizations, Rohde says, that power in the industry comes from controlling patient records inside siloed systems. But just as in financial services or e-commerce, she predicts, there will come a time when everyone OK? recognizes the value of open standards and data sharing.)

Rohde and her three co-founders—Matt Mattox from Red Hat, John Casey from UBS, and Mark Ragusa—realized that it would be easier to bring about change in the healthcare system by focusing on patients, and piggybacking on their own power as consumers. “This is usually how change happens,” Rohde says. “The payers are worried about the hospitals and the hospitals are worried about the payers, and meanwhile you have the Fitbits and the Apples and the Googles starting what we believe will be a major wave of disruption.”

These days, Rohde says, Axial is staking out a role connecting two worlds: that of “classic corporate integration,” meaning hospitals’ internal IT systems and digital health records, and the world of “consumer integration,” including smartphones, health information, fitness apps, and personal monitoring devices. “We believe the power comes when you link those streams of information.”

There are three basic parts to Axial’s mobile application, which it licenses to its hospital customers under a “white-label” arrangement (patients see the hospital’s brand on the app, not Axial’s).

First, there’s a layer of information from the hospital: physician directories, appointment scheduling, maps and directions, personal health records, and the like.

Second, there’s the educational component. In 2012 Axial Exchange bought a Mayo Clinic spinoff called mRemedy, bringing full access to Mayo’s full library of consumer content, including reference information on nearly 1,000 conditions and diseases. The company also pulls journal articles from 500 peer-reviewed sources, Rohde says.

As users browse the reference section, the app learns what they’re interested in—say, cancer or heart disease—and guides them to deeper content. Hospitals can also program the app to show targeted health information to users based on their age and gender.

Finally, there’s a section of the app that connects to self-tracking technologies such as wireless blood pressure monitors, Fitbit exercise trackers, or Withings scales. The app can connect to 50 consumer devices overall, and help users track and interpret the data so that they can ask smarter questions the next time they see a doctor.

“Your physician doesn’t want to read all your Fitbit data, but they do want to know if your blood pressure was wildly out of range, and what you tried and what else was happening,” Rohde says. “We prompt you for that.” The self-care portion of the app also includes a tool that helps patients remember which medications they’re supposed to take every day, and when.

That’s a lot of functions to pour into one app—and it puts the startup into competition with quite a few other digital-health players. But Rohde says the integration is one of the reasons hospitals like the app. “The reality is that your Starbucks knows more about you when you’re out of the hospital than your healthcare providers do,” she says. “We give healthcare institutions a high-resolution picture of their population.”

Axial Exchange’s customer base spans 13 healthcare systems representing 70 hospitals, which isn’t a bad start. But the company’s main hurdle, Rohde says, is that hospitals are only slowly waking up to the idea that they should be staying in touch with discharged patients through their mobile devices. Only 6 percent of the 3,000 hospitals in the United States offer any kind of mobile app to their patients, she says. “This is not a mainstream thing yet. The rate of decision-making in healthcare is very slow.”

One of the keys to winning more customers will be compiling hard data to show that patients who use the Axial Exchange app have lower rates of complication or readmission. “We have done some one-off studies on readmission that are pretty impressive—we have been able to move the needle 30 percent,” Rohde says. But it will take large, peer-reviewed, published studies to get more hospitals interested. Given that Axial Exchange didn’t have a meaningful installed base until early 2013, it will take another six to nine months to collect the data, Rohde says.

Meanwhile, Axial Exchange still has some success selling its app to healthcare organizations as an engagement tool, Rohde says. Customers get access to a dashboard that shows them measures like reach (the percentage of a hospital’s patients who download the app), retention (the percentage who keep using it after 30 days), and self-care (the percentage using the information or medication-management tools). That’s useful data to have at a time when the price a hospital can bring from a potential acquirer depends in part on the health, demographics, and revenue-generating potential of its patient population.

“What’s driving healthcare right now is a land-grab mentality,” Rohde says. “You see one hospital buying up another, trying to get the biggest patient population under their care that they can before the revenue-per-patient is capped [under bundled, performance-based reimbursement]. Every hospital in the country is trying to get the best group of privately insured patients that they can.”

For years now, Scripps Institute director Eric Topol, a cardiologist and genetics researcher, has been telling his fellow doctors that they should consider prescribing health apps to their patients, rather than just drugs. Rohde thinks the time may soon come when hospitals do the same for all discharged patients. And not just to reduce rehospitalization rates, but to keep their customers happy.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • jonkernpa

    I imagine this approach will work wonders with an engaged patient population. I like my gadgets, I like tracking & graphing (longitudinal) my blood tests results, I think I would be an interested user of such a mobile app. It is a great idea to bring this all to the fingertips of smartphone users. It will definitely cut down costs and improve folks’ lives to be more in touch and engaged. After all, as my wife (a physical therapist in long-term care facilities) always says about healthcare, you have to advocate for yourself.

    But, I wonder what *percentage* of the post-hospitalization re-admits are tied to apathetic folks who: (a) don’t pay for their care in the first place, so are not motivated to stay out of the ED, (b) are not motivated to do better with their health, (c) exhibit traits belying their lack of attention to being healthy, (d) do not have or care to use technology. All the whiz-bang technology in the world will not overcome apathy and complacency. And if the apathetic patient population disproportionately drives up the health care costs for all, we still have a major unsolved problem as a society.