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October 9, 2002
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Alumni Company modeMD Allows Doctors to Share Information
Artical by Northern Nevada Business Weekly
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In a move that could be a harbinger of future of economic development in
the state, Nevada Ventures, L.P. has aligned with Sierra Angels and the
University of Nevada, Reno – through the State of Nevada’s Applied Research
Initiative – to fund the creation and establishment of modeMD.
The Reno-based software firm hopes to change how medical professionals collect,
share and distribute information.
The modeMD system allows physicians and clinicians to use a personal digital
assistant to record patient diagnostic and treatment information at the
point-of-care, and then transmit that information accurately, securely and
instantly to their practice office through the modeMD data center, the company
said.
The integrated service also allows a doctor to electronically transfer key
patient information to a colleague.
The new system appears to be a step up from the old face sheet system, where
a patient’s information is recorded on a sheet of paper. According to a report
by Stanford School of Medicine researchers, "The inefficiencies and frustrations
associated with the use of paper-based medical records have become increasingly
clear, especially when inadequate access to clinical information is one of the
principal barriers that clinicians encounter when trying to increase their
efficiency in order to meet productivity goals" for their practices.
Roy Graham, modeMD’s president and chief executive officer, said, "Government
and private research has shown that [physicians and clinicians] are losing an
average of 10 to 20 percent of their revenues due to billing errors. Our
system reduces the administrative costs associated with paper face sheets."
This, he said, will leave medical professionals more time to spend with
patients or family.
Other errors can include miscoding drugs or equipment and other mistakes
caused by illegibility inherent in some people’s handwriting. A 1999 study by
the Institute of Medicine found that more people in a given year die from medical
errors than from motor vehicle accidents, breast cancer or AIDS.
ModeMD was conceived by Phil Goodman, a UNR professor and director of its
Medical Informatics Division, who then hired computer programmers to make it
possible. Medical informatics is the scientific field that deals with biomedical
information, data and knowledge – their storage, retrieval and optimal use for
problem solving and decision-making.
"We’ve all heard the saying, ‘necessity is the mother of invention,’ and the
case of modeMD is no different," Goodman said. "As a physician I look for
ways to make more time for my patients, to give them better service. By
replacing the paper system with an electronic one, we can improve the flow
of communication to benefit both the patient and the practice as a whole."
Funding for modeMD came through the State of Nevada’s Applied Research Initiative,
which uses mix of UNR money and private funds to stimulate research in industries
that diversify and develop its economy. UNR’s investment gives it an equity
position in the company.
"[modeMD] is an excellent example of how the ARI can be used as a seeding
fund," Graham said. "The purpose is to stimulate the commercialization of
research on campus."
The ARI was established to support research and promote economic development and
diversity in Nevada. It leverages industrial dollars for research by matching
state or federal funds with private or commercial ones. ARI requires at least a
one-to-one match between public and private funds, and restricts funding to
research grants and programs that facilitate academic and industrial relationships;
particularly those that develop the university system’s technology and its ability
to realize its commercial potential.
Venture capital investment, which is often the primary source of funding for
start-ups and small businesses with huge growth potential, has remained relatively
low in Nevada. According to a National Venture Capital Association report in 2000,
Nevada ranked 40th among U.S. states in venture capital investment, allocating only
0.04 percent of gross state product to venture capital.
But venture capitalists see that trend turning around, noting that northern Nevada
is the perfect place for high-tech industry, which relies heavily on venture
capital for start-up.
"Reno is particularly attractive to businesses that work [in communications and
computing technology]," said Richard Bostdorff, president of Tech Alliance. "The
communications and air traffic infrastructure is good here. We now have first-class
office space available and there is a large pool of workers in northern California
that would like to live and work here, making skills and experience readily
available."
Bob Goff, president of Nevada Technology Council and Chairman of the Advisory Board
of UNR College of Engineering, said that investment in programs such as modeMD
will create high-value jobs and economic growth in Nevada.
"Tech jobs on average pay 60 to 200 percent higher than non-tech jobs," Goff
said. "And historically, the tech industry has a higher probability of high-value
liquidity" when consumed by IPOs or strategic acquisition.
The first round of public trading – Series A (preferred stock) – in modeMD
concluded Aug. 15 with future series to be introduced early next year. The company
started in UNR’s Applied Research Facility and has since moved temporarily to the
South Meadows Parkway business center. It expects to move into the new Tanamera
complex at the end of the year. "I’m really impressed with all the things that have
gone on in [Reno]," Graham added. "It just needs to market itself better."
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Alumni Company modeMD Allows Doctors to Share Information