Understanding that size does matter: Kareo

Page 1 of 2

Too many times when we gauge the significance of challenges, we correlate difficulty with scope. We believe larger populations breed larger problems and that bigger campuses generate more opportunities for errors. This overly simplistic thinking does little in terms of creating meaningful change in the quality of care for the vast majority of patients who go to small practices.   

I spoke with Rob Pickell, Chief Strategy Officer, Kareo, to discuss how our industry’s preoccupation with larger organizations is doing a disservice to smaller practices and the patients they serve. 

(Editor’s note: To hear audio excerpts of this interview, click on the media player buttons that run throughout this article.)

Free: You are responsible for Kareo’s overall strategy. Could you describe your company’s position and goals within the healthcare IT market?  

Pickell: One of the things relatively unique about Kareo is that we are completely focused on smaller practices which, for us, typically means one to ten providers.

We very strongly believe that technology that’s purpose-built for smaller practices can be really game changing for not only those practices, but their patients as well. What’s often missed in the ongoing conventional wisdom, or what you typically do not see covered by the press, is that healthcare technology is not a one-size-fits-all solution. Our part of the market cannot use the technology designed for the larger healthcare organizations and expect the results it needs. 

 There’s a lot of discussion around the fact that healthcare in general under consumes technology and it’s certainly true within the ambulatory space, but what I think is often missed, that part of the reason that that happens, is that the technology really hasn’t been built for the unique needs of the market that were focused on. I always use the simple example of if you’re running a small restaurant and you had to run Oracle for your financial system, it would be pretty difficult to run an effective business, right? And yet in healthcare, most of what is out there is designed for much larger deployments and so our vision as a company, and my role in it, is to change that. 

Free: A few weeks ago, Kareo announced a new billing system designed specifically for small practices. Can you please describe how that solution was created?

Pickell: The new solution is called Kareo Medical Billing. It’s our second-generation offering in the area of outsourced billing.

We launched back in the first quarter of 2013. When we got into the business, ever company would take a practice management software application and build an outsourced billing solution around it. 

We got into the business with the same basic strategy and then, over time, we realized that the trend around practices outsourcing continue to grow. We believe over time that the vast majority of practices will outsource billing. It’s something that there’s a lot of advantages for centralizing and scaling it, but that the solutions in the marketplace haven’t been purpose-built for that model. It’s kind of taking a software application that was designed for a practice to manage their own billing and then building an outsourced solution around that instead of purpose building a technology specifically for the outsourced model. The one company has done that effectively, but serves much larger practices than we do, is athenahealth. 

We took all of that prior knowledge and experience and completely started from scratch. Over time, we learned a lot about how to deliver a great offering. We built a new solution that, again, is absolutely everything that a practice needs when it’s outsourcing its billing, but also taking a lot of things out of it that are really not critical in small practice model. We are really excited about that milestone. Today, we serve more than 1,000 practices with their outsourced billing. 

Free: So many of the discussions and debates that are currently occurring in healthcare seem to approach the field with a preoccupation toward the larger organizations. From your perspective as a vendor, do you see small practices not getting the considerations they deserve?  

Pickell: We’ve been focused on small practices since our founding. In the first eight years of our existence, we were focused in a way that many other companies that serve the ambulatory world have been and that’s with a single product.

 We got into healthcare IT by focusing on practice management. In 2011 and 2012, we started to see that ultimately what a small practice wants is they would rather work with a smaller number of suppliers versus a larger number. They’re not going out buying best-of-breed. They just want to simplify how they interact with their suppliers. Ultimately, we learned during the big ramp in the EHR growth spike of ’10, ’11 and ’12 that the value of integration across the various solutions that can exist in a small practice is tremendously important. We call it, internally, the value chain, right, from finding patients, engaging with them, on boarding them, delivering care and getting paid for your work. All of those steps are inextricably linked. That realization drove us the strategy of basically expanding our product line.

That’s still a work in progress as we bring various products to market. That being said, our focus on the small practice has never changed and because of that we are pretty uniquely positioned to understand their needs. Small businesses, which small practices essentially are, they behave more like consumers than that of a big business and without that understanding quite a few obstacles present themselves when you are addressing IT issues. That perspective of the market has been a real asset for us as we have broadened our strategy.