Podcast interview with NaviNet CMO Michael Ross (transcript)

This is the transcript of my recent podcast interview with Michael Ross, Chief Medical Officer of NaviNet.

David Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Dr. Michael Ross, Chief Medical Officer of NaviNet.  Dr. Ross, thanks for being with me today.

Michael Ross:            You bet David.

Williams:            Tell me about NaviNet. In particular, what is the core challenge that your company addresses?

Ross:            NaviNet is an 11 year old company focused on real-time health care communications. We provide core customers, which are largely health plans –but also governmental entities and — with a linkage that enables administrative simplification. It gives doctors the ability to receive key pieces of information in their offices that support their financial and administrative functions. It serves as a conduit between payers and doctors in real time to enable information exchange.

Williams:            How widely deployed is your solution?

Ross:            We operate in all 50 states and communicate to about 70% of the doctors across the country.  We have 30 health plan customers, which translates into about 460,000 unique physicians, 90% of which are in small group practices of ten or fewer physicians.  We also have solutions deployed to about thousands of hospitals and ancillary care facilities. It’s about 800,000 transactions per day going across the network; about 300 million transactions a year.

Williams:            That’s quite high coverage. How did you get from zero up to that point?

Ross:            You know, our work started off with largely regional customers and that was Blues plans. And then, as the national payers started to emerge, it enabled us to get a footprint into a much larger provider network for purposes of servicing these national payer needs and delivering that financial and administrative information.

Importantly, for about the past two years or so, NaviNet has layered on clinical transactions that flow between our payer customers and our provider offices.   Those transactions include gaps in care and other things that are derived from the plans’ care engines that provide or serve as a transmission channel for things that are going on outside of the doctor’s offices.

So the electronic health records and other tools that the docs are using locally, if they have to be enabled on those kinds of solutions, really give them insights into what’s happening in their practice environment. The layering of the clinical transactions with data supplied by the plans gives them a view of what kinds of things are going on outside of the individual offices, a much wider purview on behalf of that patient.

Williams:            It sounds as though your paying customers are mainly the health plans, but a lot of the users are on the provider side.  Do I have that right or how does it align?

Ross:            You do have that right, but about 5% of our revenues and an increasing percentage of it are derived from provider revenues.  We recently launched our practice management and EMR solution, which we are now rolling out in the provider community together with our mobile solution.  The practice management and EMR solution is financed by the physician offices.

Williams:            It seems as though a lot of what you’ve built up over time is based on an e-prescribing platform, if I’ve understood that right. So I wanted to hear about if that’s the case and about how, as we transition into an era that’s characterized more by electronic health records, how in fact you’re thinking about moving along with that.

Ross:            It’s really interesting.  The NaviNet enterprise has purchased a solution, Prematics, in December. Prematics’ focus was on using an e-prescribing Trojan horse as an entrée to clinically messaging physicians when they’re at that teachable, impactable moment behind the examiner’s door.

What the acquisition of Prematics, now relabeled the NaviNet Mobile Connect Solution, provides is that last few feet from what were historically clinical messages deployed on the NaviNet portal to get them into the doctor workflow.

The vast majority of docs write one or more prescriptions for roughly 85% of their encounters. Therefore if they’re up on the e-prescribing solution, it affords a phenomenal opportunity to render other clinically relevant message that the health plan has where they’re actionable.  That really was the genesis.

The acquisition was taking the clinical messaging pieces that NaviNet had been doing for the past couple of years and getting them in front of the docs when they can do something about that.

It ties to such broad adoption that’s going on in general with mobile.  Seventy-five percent of practicing docs are now using smartphones.  What’s phenomenally interesting over and above that is the trajectory of the tablet, and specifically the iPad, as a form factor that docs are using for a variety of different things when they’re rendering care to patients.  What we’re seeing happen right now is that iPads are deployed in roughly 28% of doctors’ offices today, but if you ask them what their plans are within the next year with respect to acquisition of that specific form factor, it’s getting upwards of 90% or more.  NaviNet’s mobile solution is deployed on iPad in addition to iPhone and iPod Touch and Android form factors together with our earlier deployments, which were largely Windows Mobile.  What we’re tying to is a dramatic sea change in the use of mobile technology for care-giving. It’s just fascinating to watch.

Williams:            What level of receptivity do physicians have to this kind of mobile solution if they’re also implementing an electronic health record at the same time, as I assume many are?

Ross:            That’s such a great question.  I’ll make a couple of observations about electronic health records in general.  Keep in mind that 90% of our docs are in practice configurations of ten or less and while those docs may in fact be contemplating EHRs with some of the incentives around Meaningful Use that are out there right now, a large number of them are not, particularly in the small doc offices.

What the NaviNet Mobile Connect offers the docs is the opportunity to take a more incremental, modular approach to automating what they do in terms of acquisition of technology in their office.  We tend not to deploy in those practices that are already down the EHR pathway. But importantly, we can and do.

I think one thing that’s important in EHRs is that there are documentation management tools and they serve a very important function in that regard.

Open questions in our minds are: do you really need to take the three inch thick chart into each and every encounter, particularly with what’s going on with the iPad right now? Do you prefer to have essential pieces of information available to you in the exam room; discharge summaries, patient clinical summaries just in general, e-prescribing, labs, referrals, authorizations?  Would you prefer to have those kinds of key pieces in the care-giving process, assuming those things are integrated with the EHR, and then to go back into the equivalent of the three inch chart or the electronic health record for more specific information if those are lacking?

These are open questions as we evolve NaviNet Mobile Connect from what it is today, namely a clinical messaging platform that is layered on top of an e-prescribing workflow tool into itself becoming Meaningful Use capable.

We’re working on that and trying to sort through some of those issues, mindful that, as you suggested, the docs are hearing much more about and considering their options with EHRs.

Williams:            I’m sure that even as the physicians are shifting along in technology that health plans aren’t standing still in terms of what they’re expecting from you or in terms of what they’re business objectives are?  How do you look at the health plans going forward?

Ross:            One of the areas that health plans are struggling with and that they’re looking for NaviNet to help with is this area of medical home and accountable care.  Clearly in the past year and a half, there’s been a sea change that involves the shifting of care coordination responsibilities from the payers, who historically have done that with less than optimal results, to the doctors who have the trust and relationships with the patient.

The plans are putting significant amounts of money on the table to support the doctors in doing this care coordination and they’re looking for NaviNet to help them deliver the tools to the docs to support those kinds of efforts.  Mobile is certainly a piece of that, but I think where you’re going to see NaviNet go is the support of a clinical dashboard.

We’re already deployed in 70% or more of the physicisn practices around the financial/administrative clinical messaging component.  It would seem that we are a very logical place.  The plans expect us to be the one that convenes a clinical dashboard that can be shared across multiple stakeholders.  Some of those will be in the medical home and/or the ACO.  Some of those may in fact reside at the health plan leveraging people resources; pharmacists, nurses, etc. that today are working with the health plans, but tomorrow may be extensions of the physicians.

All of the tools, whether that is NaviNet’s portal that will have enhanced clinical capabilities or NaviNet’s portal PM and EMR, which is an option for some practices, will be available.

We also will be able to relate to other practice management and EMR systems as well and the mobile will be multiple views, with multiple access points for those offices to support future requirements.  The plans have really aligned the economics to help doctors move in this direction in the next year or two.

Williams:            What is the role of the patient?  Do you have applications that touch the patient either directly or indirectly?

Ross:            While a critical component of this whole medical home care coordination piece, we will likely get to that through partnerships.  We’re looking at various types of solutions that help do that; some of them are portal-based, some of them are SMS text-base, some of them are IVR-based.  Frankly, the social networking arena gets particularly interesting as well to support patient engagement.  That will likely happen through partners.

That said, I think that our payer customers today expect us to be a general contractor and provide them with turnkey solutions, end-to-end solutions and that doc/patient communication conduit will be a critical component of that if we’re going to be successful in optimizing the medical home initiatives.

Williams:            What else do you see going on in the environment that presents either opportunities or threats to you?  I’m thinking for example about the shift of physicians towards employment and away from some of these smaller practice settings.  What are some of the things that you’re seeing and how do you evaluate them and look for opportunities?

Ross:            I do think the dynamic you just expressed is spot on.  Doctors, particularly those that are a little bit further in their career, are looking at the hurdle rate that some of these medical home ACO type of initiatives are going to impose and wondering whether, at that stage in their lives, there may be a more convenient way to get there by

Several plans that we work with, they’re hoping that by us supplying the tools and them supplying the incentives, they can help smaller practices to not be forced into that acquisition mode and to have alternatives.  I think that that’s one sea change that you’ve correctly identified.  NaviNet is well positioned either way, were that to happen or were that to not happen.

The payment reform issues are real and so I think a lot of my comments thus far have focused around the medical home because it’s more tangible, it’s more real, there are standards set out.  ACOs, which clearly the Feds have incentivized through the Affordable Care Act, feels more like a work in progress, but one that NaviNet will also be able to play a role in.

If you keep in mind some of our core assets around financial and administrative transactions and now increasingly into the clinical arena, I do think that we have a role to play as ACOs mature.  We’re certainly mindful that if you’ve seen one ACO, you will have seen one.  Some of the core transactions that we support will probably be significant and there will be a role to play in integrating financial, administrative and clinical as ACOs shape up.

Williams:            I’ve been speaking today with Dr. Michael Ross.  He is Chief Medical Officer of Navi Net.  Dr. Ross, thanks so much for your time.

Ross:            Likewise David.  I really appreciate it.

June 24, 2011

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