May 1, 2006

An Exclusive Interview with Girish Kumar, President of eClinicalWorks

Like many readers, I was shocked when 95% of Massachusetts physicians enrolled in an ambulatory EMR pilot chose one vendor: eClinicalWorks. More so when I found that the eCW product is relatively cheap, and yet physicians chose it over far more expensive competitors in the Massachusetts project, even though an outside company was picking up the tab. I took a look at KLAS: #1 in the small practice category with 100% "would buy again." I found the public discussion forum of their independent user's group and it was almost eerily positive. Naturally I wanted to learn more, so I e-mailed company president Girish Kumar, who graciously agreed to be interviewed.

Tell me about your company and products.

eClinicalWorks is a private company focused on the ambulatory space of healthcare. We offer everything needed to manage the physician's office. We started the company in 1999 with five individuals with varying backgrounds, a physician and five IT professionals. We looked at several verticals and chose to go into healthcare, based on the size of the market, its penetration, and having one of the founders being a physician.

We took the non-traditional approach. I had good contacts, but we decided strap it ourselves and not go with venture capital. We’re free of investors and debt. We have 270 employees and revenues of $25 million last year and $40 million expected this year. Of that, 99% comes from software. We don’t do hardware. We develop all of our products in-house. We don't outsource development or support. Our offices are in Westborough, Massachusetts and Atlanta.

Our goal is to stay private and keep growing the company, focusing on this market that we think is pretty large. We plan to come out with new products and solutions for ambulatory care.

We are finding that not only do we sell into private physician groups and networks, but also hospital-owned and hospital-managed groups, interfaced into hospital systems like MEDITECH and IDX. So, we’re also selling into hospitals who have owned and affiliated physicians.

As a guiding principle, some companies measure profitability or revenue. Our measure is the time we're going to be around. It's about duration vs. size. If we can make eCW transcend a generation and then hand it over to the company’s second generation of management, we’ll have been successful. Most companies disappear in 5-8 years. We think the industry we’re in lends itself to long-term relationships. Customers use our product for 10-15 years. Our people are young and excited about what they’re doing, with no external interference in what we do and what we enjoy doing.


Why do you think eClinicalWorks was so dominant in the recent Massachusetts pilot project?

We do that well against these same competitors all across the country. This is just the first time it became obvious. We’ve been consistently beating the competitors for three years in lopsided victories. This is the first open validation. It was an open beauty contest with a clear set of rules. The awareness came from Boston Globe coverage, but the reality is we’ve doing this well for a very long period of time, by winning against them in head-to-head competition. It’s not a one-time thing.

It was difficult to win because size was not a differentiator. Physician and practices would not have picked eCW unless the product works, they could learn it in record time, and deploy it within a week of training. They could understand the underlying IT technology and keep the product for the next 20 years because it's Web-based.

We’ve always been recognized as a company that listens to its customers. We have 70% of our employees in customer care. Customers believe that if they invest in learning the product, they can keep it and have a company that will listen to them.

Physicians had a catch in the Massachusetts process. Everything is free -- hardware, software, and training -- but the physician has to demonstrate usage of the EMR within strict guidelines, such as percentage of records in the EMR and percentage of prescriptions. If you can't demonstrate that usage, it's not free. You put the onus on the physician to pick the right product or it will cost them.

So, they picked a product they know they can use. In most cases, a product that is more expensive is better, like in automobiles. How would you feel if someone told you that physicians could have bought any product, some of them 2-3 times more expensive than eCW, and they still picked the less-expensive product? John Halamka called it a Lamborghini at a Camry price.

Our product is built on IT standards that will last 10-15 years. It has comprehensive functionality, sophisticated technology, quick and effective implementation, and good customer support. Put them together and you have a pretty powerful combination.

It’s not just small practices in Massachusetts who chose us. There were at least three large groups that picked eCW, including large hospital groups. We’re seeing that trend around the country, even though we dominate the small practice market like no other.


In your user group discussion forum, a physician customer said, “Not that it wasn't already obvious that the old school EMRs are bloated, cumbersome and overpriced by a factor of 10, the trouncing eCW just accomplished in this EMR head to head battle shows they are in trouble.” Do you agree?

Yes. I follow other industries because history offers a good handle on what’s coming. In the airline business, JetBlue has had impact and caused competitors to file bankruptcy. They have new planes, TVs at every seat, better service, a compelling price, and on-time service. It’s hard for companies with old aircraft that look lousy and with bad service to compete.

In our industry, the existing products won’t disappear over the next 12 months. But, unless you can re-engineer to become effective, fast, and agile, in this age where we can sell products with equal efficiency everywhere, you probably won’t be around. It’s hard to change the culture. Are they in trouble? I think so, unless they figure out how to restructure.

We offer more functionality than all EMRs today, guaranteed. We listen to our user base and we know what we need to work on from our eCW user group. We listen and read the forums, then talk to development in real time. The turnaround to getting a requirement to development is less than a week. We mold our product development by what users want, we develop on time, and we deliver on time.

We have never created a CD. We distribute, update, document, and train electronically over the Internet. We go on-site for training, but we don’t mail out boxes. That’s very nontraditional way of doing business, the Google way, where you have a white page and a search box and can be very successful with it. We take the processes, turn them inside out, define the traditional way, and define our way, which is not usually following tradition.

Our organization doesn’t have a traditional executive structure. We’re all team-based with team leaders – that’s it. Like football, we have groups specializing in offense, defense, and special teams, all of which have coaches, but no hierarchy. If I can learn to do something then repeat it 1000 times for efficiency, I will be successful and can move on to the next process. It’s not one guy doing something with an executive pushing.

I have a supply chain background along with IT. I’ve taken software and IT and structured it around a supply chain mentality. Wal-Mart and Dell are successful because of supply chain. We’re like one super-optimized supply chain.


I’d like to name some EMR companies and have you give me a few adjectives that come into your head. Let's start with Allscripts.

IDX. EMR only. Partial solution. Low profitability.


GE

Too diversified. EMR like the lighbulb business.


Nextgen

Complicated product. Slick PM, weak EMR.


Misys

Old product. Weak technology.


Epic

Respect. If we can do what they’ve done, we’ll be happy. Admiration. I've never met their CEO, but I've heard about her and she has similar thoughts on the corporate side. No used car salesman approach. Respect the customer. Don’t chase every deal.


Looking critically at your company and product, in what areas will you improve?

For the company, I'd like to stress more accountability in individuals who learn and respect the tradition of the company. I'm quite happy with the way the company is. The challenge is for the next 200 new employees to have the same fair, ethical competitive spirit. We don’t like to lose, but we like to win ethically. We have to be excellent. I’m paranoid about everything, worrying that the whole world will fall apart. It's good to stay grounded, assume that nothing has happened yet, and that everything starts from zero each Monday morning. Only the paranoid survive. Microsoft had that for decades even when they got large, at least for a while.

For the product, we'll enhance the entire supply chain of ambulatory starting with the patient. We'll make our patient portal as good as EMR/PM. Listen to customers to make it compelling. Connectivity between physicians will be important - we have a huge advantage doing that in Rhode Island and Massachusetts. We have other similar deals signed but are under NDA, large state or payor initiatives with eCW as the only solution. Sharing the patient master and progress notes - that's the next generation.

We will do more interfaces. If you've done 50, you need another 50. You need to interface to everything. It wouldn’t disappoint me if we doubled that list every year.


For which specialties and practice sizes is eClinicalWorks most appropriate?

If IT was the only criterion, we’d beat every ambulatory EMR. We're scalable, fault-tolerant, and mission critical. We are not limited to a user profile and functionality is not limited by size. It comes down to what you want to be known for. I believe in the power of focus. 80% of practices are 1-5 docs and I want to dominate that space, but we never like to lose. We’re doing well in the 5-100 physician space.

Product-wise, we handle the whole market. It’s a lot easier to do larger groups. They have infrastructure, IT, and support that's far harder to come by in 1-2 doctor group. We are almost dominant in that small market segment where competitors can’t scale down. We have a five-day implementation in the small groups.


You offer the product as an ASP. How would a practice decide whether that’s more appropriate than purchasing?

People still like to have the server in their office, although I don’t know why [laughs.] 85% of our customers are traditional hardware installations. People like to have the servers in their office with their data. However, even for those local servers, we offer disaster recovery service. We archive your data offline and set you up to use our ASP while you recover. We give the redundancy of an ASP with the comfort factor of a local system. That’s what the market is asking for. With our speed and agility, we were able to roll it out, and if our competitors follow, it will probably be at least a year. Anyone can archive data, but can you give them ASP access without downtime?


What is your strategic plan for the company?

We want to keep growing by keeping customer satisfaction as a priority. Manage the growth, but not slow it down. Still focusing on ambulatory.


Is EHRVA doing a good job?

It’s more like a trade association. They try to bring vendors together under one common consortium. I don't think they do either good or bad, they just voice opinions. I’m indifferent to them.

What’s your take on interoperability and David Brailer’s work?

Brailer did something very smart. First, he created awareness, His ideas around RHIOs plugging into a national health information network is the right strategy. 95% of healthcare is local. This scenario of being sick while on vacation probably happens less than 1% of the time. It’s important that my local hospital and doctor know what's going on. 

So, I like and understand the RHIO concept. I still think they’re very big Lego pieces like hospitals and IPAs that will create nucleuses of local healthcare by picking vendors who meet their needs. Vendors will exchange information under the form of a RHIO. Someday, maybe never, they will plug into national network, but I could care less if it happens within the next ten years because local is most important.

The idea needs to become practical. You’re seeing the building blocks – local groups building local networks and getting ready for state grids. I appreciate the amount of effort Brailer put in speaking and educating that EMRs are not something they might consider, but that they would have to consider.

I just hope they find someone with the same level of energy and passion because it’s a thankless job. We need someone who can carry the torch. I hope the government gives them more budget and leverage.


What do you think of certification of EMR products by CCHIT?

I believe some form of certification is important. We’re going to apply because its one of those necessary things we have to do to participate at the national level. We’re going to commit ourselves to that process. We were randomly selected by CCHIT in the pilot phase when they were looking at the time required to prepare for certification.

It has flaws that need to be rectified quickly, or else certification won’t have meaning. They need a clear process on defining what failed, what passed, and why they failed or passed. It should not just be black or white. Every vendor's entire certification process should be made public, where they passed and where they didn’t. Let the consumer decide what’s important to them. If you have a specialty EMR, some items don’t apply to you, so does that mean you don’t get certified and can’t sell into oncology? That doesn’t sound right.

Why don’t they make it more like Consumer Reports? List who went through the process, how they did, and any comments made. Put the whole validation process on the web, maybe even the whole vendor scenario they presented. Let customers make their own decisions. To keep it hidden may result in questions not being answered. Who will question the integrity of how one company did vs. another?