Medsphere Systems Markets Open Source Electronic Health Records System

4/6/10

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privacy and security.) Clearly hospitals have a lot of work to do. Besides the availability of stimulus funding, hospitals have another reason to get on board: hospitals that fail convert to electronic medical records will have their Medicare reimbursements cut as punishment, beginning in 2015.

Medsphere argues that besides improving patient care, electronic medical record systems can improve financial performance and in effect pay for itself.  Having a complete record of patient care means “every single charge gets billed,” Jung says. In addition, he says, the electronic record systems contain treatment protocols that help ensure patients get proper care, reducing the likelihood of errors that can increase costs.

At one client, Midland Memorial Hospital in Texas, infection rates fell to 3 per 1,000 from 24 per 1,000 in the 18 months after the system was installed as staff followed infection-control procedures. Compliance with guidelines for patients on ventilators increased from 20 percent to 85 percent of cases during the same period. The guidelines are intended to prevent cases of pneumonia.

“We are able to decrease operating expenses in an important clinical way,” Jung says.

Medsphere was founded in 2002 by Scott and Steve Shreeve, two brothers who were also doctors. The brothers later left the company, and new management was brought in. The venture-backed company has raised about $46 million to date and investors include Azure Capital Partners and Thomas Weisel Venture Partners, both of San Francisco, and EPIC Ventures of Salt Lake City.

Medsphere is targeting hospitals with 50 to 500 beds that have little or no electronic record-keeping systems, Jung says. Subscription costs vary by hospital size and other factors. Besides Midland Memorial Hospital, customers include Lutheran Medical Center in Brooklyn, NY; Kern County Medical Center in Bakersfield, CA; Hoboken University Medical Center in Hoboken, NJ; and the federally run Indian Health Service.

Medsphere expects to triple its bookings this year as hospitals respond to federal incentives. The company has hired 30 people in the last two years, bringing the total workforce to 90, Jung said. “This piece of the stimulus has been magnificent,” he says.

Denise Gellene is a former Los Angeles Times science writer and regular contributor to Xconomy. You can reach her at dgellene@xconomy.com Follow @

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  • http://www.webkass.com/ KASS Inc.

    Even with Open-Source software, physicians need guidance in setting up and using these Electronic Health Record (EHR) systems in compliance with the law. It always comes down to people – people using software well or poorly, people who are good with open-source technology and those who aren’t. Physicians and office managers need a partner, whether using open source or more commercial packages.