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Posted: November 01, 2013

Medicine in the information age

IT industry steps up to curb health care inefficiencies

Eric Peterson

The Institute of Medicine found that 30 percent of U.S. health care spending in 2009 was waste. That’s $765 billion. And skyrocketing costs have ballooned at a rate that’s more than triple that of wages over the past decade.

Many believe information technology is health care’s last hope for reducing waste and capping costs. With more than a trillion dollars worth of fruit hanging from branches of all heights, health care most definitely has the tech world’s full attention, and there are a host of federal financial incentives set to go into effect soon.

Amid this landscape, it’s no surprise Colorado is home to a notable and growing cluster of health care IT companies. Some provide tools to the masses to help manage their own care, some are aimed squarely at health care professionals, and others still look to bridge the often unwieldy gap between the two.

“Ultimately, information has been underutilized in health care,” says Evan Marks, vice president of informatics and strategy at Denver-based HealthGrades. “It’s been used by pharma and device manufacturers, but in terms of the broad application of informatics, health care has really lagged.”

Marks says the reticence of the industry to adopt new technologies led to numerous mandates and incentives in the Affordable Care Act (ACA). “Efficiency in other businesses is really rewarded, but in health care, the sloppier your business was, the more money you made. With the ACA, a lot of the disincentives have changed. Hospitals are no longer rewarded for bad behavior.”

According to Marks, the health care industry needs to self-assess with the tools afforded by modern IT. “Just like every other business, whether they’re an assembly line or a bank.”

HealthGrades has been doing just that since 1998. With about 200 of its 600 Denver-based employees, the formerly publicly traded company was taken private in 2010, but its core business remains the same: to offer consumers information on practitioners and hospitals.

The company evaluates health care providers on 35 procedures and practice areas from hip replacement to neurosurgery and delivers the results to the public via and

Marks says the company helps cut costs by allowing for analytics-based targeted marketing campaigns, rather than billboards and direct mail. “When those campaigns are ill-informed, the costs associated with producing materials and reaching a largely inappropriate audience are high,” he says.

More importantly, the rankings help guide patients to hospitals where outcomes are best, lending to lower incidence of mortality and malpractice. Patients can have up to 10 times higher mortality rates at the lowest-ranked facilities.

“Consumers can evaluate hospitals based on positive outcomes,” Marks says. “These outcomes are typically associated with lower costs.”

Traditionally, this information has been unavailable, but not anymore. Still, the public has a learning curve to climb. Using outcome-based data “is not how people typically choose their doctors,” says Marks. “Consumers haven’t been trained; that’s part of our mission.”

And likewise it is part of WellTok’s mission. The Denver-based company has about 50 employees after closing on $18.7 million in Series B funding in April.

“WellTok is at this very interesting intersection between health care and the cutting edge of social media and technology,” said former VP of Communications and Marketing Brad Samson. “The big problem with health care is getting people to engage with their own health.”

Samson says the ACA assumes people want to be engaged, but he doesn’t think that’s necessarily the case. “A lot of the things the government is doing are ‘step two’ engagement levels,” he explains. “It’s ignoring the reality that there are a lot of people sitting on the couch ignoring their health.”

WellTok is starting with a “step one” engagement model. “What motivates people?” says Samson. “It comes down to very traditional kinds of appeal: fear, greed, hunger.”

To this end, WellTok incentivizes people to actively participate in various health care programs or take specific actions with free pedometers and financial rewards. “You get them in the door with greed,” says Samson. “Every activity in CafeWell earns you coins and then every month your coins are tallied up into entries for a gift card.”

But social rewards quickly supplant financial ones – such as walking competitions. “People get very motivated by having this new social circle,” says Samson.

Indeed individuals have grown accustomed to receiving financial rewards for completing health risk assessments (HRA), but social rewards can be effective as well. “We had one client program that got 25 or 30 percent of members (completing an HRA) who were just as happy,” says Samson. “It’s a complete change of how we look at things.”

Feedback has included comments such as, “Thanks for getting this fat, old man out of his armchair,” says Samson. “People see it as a lifeline. That’s where these technologies are making a difference – changing behaviors people have today.”

Founded in 2008 by Peter Hudson and Wayne Guerra, both medical doctors, iTriage is also trying to help consumers make better health care decisions. The 100-employee company was acquired by Aetna in 2011 and its app has been downloaded more than 8 million times, garnering testimonials from users who credit it with saving their lives.

Guerra says unnecessary care adds up to more than $100 billion annually. “When a lower-cost option is available, our users are selecting emergency departments 40 percent less. That’s huge,” he says.

A beta release of iTriage Trends went live Sept. 27, allowing site visitors to click on a map and see the top medical conditions searched in the vicinity.

Hudson – who received the Entrepreneur of the Year Award from the Colorado Technology Association Sept. 10 at the APEX 2013 Conference awards dinner – says the big trinity of health care is payers, providers and patients. “If you don’t have that third party – the patient – involved, you’re not going to succeed,” he says. “There’s a lot of things that need to occur, but having an engaged, informed population is really important.”

Beyond an active, engaged public, doctors must change their ways, and companies like Aventura are attempting to help. The Denver-based company’s genesis stemmed from an initiative in 2008 to virtualize clinicians’ desktops at Denver Health, and it spun off as an independent company in 2009.

“The desktop is the last frontier for virtualization,” says CEO and president John Gobron. The 32-employee Aventura, which closed on $4.3 million in new funding in September, aims to solve this problem. “We can deliver a virtual desktop to a clinician anywhere.”

The status quo involves nurses and paper notepads. “When their pad gets full, they go to their nursing station and input vitals and other data,” says Gobron. “It’s as inefficient as it gets.”

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Denver-based writer Eric Peterson is the author of Frommer's Colorado, Frommer's Montana & Wyoming, Frommer's Yellowstone & Grand Teton National Parks and the Ramble series of guidebooks, featuring first-person travelogues covering everything from atomic landmarks in New Mexico to celebrity gone wrong in Hollywood. Peterson has also recently written about backpacking in Yosemite, cross-country skiing in Yellowstone and downhill skiing in Colorado for such publications as Denver's Westword and The New York Daily News. He can be reached at

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