Steven Plochocki, the new chief executive of Irvine medical software maker Quality Systems Inc., isn’t spending all his time dealing with board issues.
He’s also working on how to get more doctors to adopt electronic medical records. Plochocki said he doesn’t plan to change Quality’s strategy and hopes to spur internal growth and strike some deals.
The company already has a made a sizable deal. It recently bought Healthcare Strategic Initiatives Inc., a St. Louis company that makes software for medical billing and collections, for undisclosed terms.
Getting Healthcare Strategic “gives us a running start” on integrating medical billing and collections into its software, Plochocki said.
“It’s our very first acquisition in a long time,” he said.
Quality and its competitors have room to grow. Only about 20% of America’s doctors have switched to electronic health records, according to figures in a recent Investor’s Business Daily story.
Other companies involved in medical software include Allscripts Healthcare Solutions Inc. of Chicago, Cerner Corp. of Kansas City, Mo., and Epic Systems Corp., a privately held company in Wisconsin.
Plochocki said he’s looking for the Healthcare Strategic acquisition to spur growth:
“Clearly, we can take the product and hand it off to our sales force, and they can go to our 50,000 doctors,” he said.
Quality has two divisions. NextGen, which provides electronic medical records, is the dominant one, and accounts for some 93% of the company’s $230 million in yearly revenue. QSI, which provides electronic records for dentists, accounts for the rest.
Salespeople for NextGen and QSI work together to sell products to health clinics certified by the federal government to provide medical and dental care for Americans who live in “high need” areas with large numbers of uninsured and underinsured people.
“There are about 1,000 of these different types of organizations in the U.S.,” Plochocki said. “We have to sell to them individually.”
Quality also plans to identify other areas for joint selling as part of its upcoming effort to develop a strategic plan, Plochocki said.
The company has seen rapid growth in recent years, as well as some battles with a dissident shareholder. Quality held its annual meeting last week, with another challenge to its management.
Ahmed Hussein, an Egyptian businessman who owns some 17% of Quality, put forth in July a slate of himself and five others for Quality’s board. He says the software maker needs new governance practices, a strategy to increase returns for shareholders and a board that’s not so closely allied to Sheldon Razin, Quality’s founder and chairman.
Management prevailed in the vote with seven of eight candidates elected. Hussein was re-elected along with one other person from his six-candidate slate.
Plochocki, a director for the past four years, took over as chief executive from Lou Silverman in August.
Healthcare Shopping
An effort by health insurers to help their members compare prices and quality data for hospitals and doctors has limited usefulness, according to the Center for Studying Health System Change.
Orange County is one of 12 communities that the center, a Washington, D.C.-based nonprofit funded by the Robert Wood Johnson Foun-dation, looks at as part of its examination of the country’s healthcare industry.
The study showed that health plans, thanks to large employers’ interests in clearer healthcare prices, are providing details about inpatient and outpatient procedures and services.
“However, the information often lacks specificity about individual providers, and its availability is often limited to enrollees in specific geographic areas. Likewise, few plans provide price information on services in physicians’ offices,” the center said.
The study noted that large employers are pushing for transparency as part of a broader “consumerism” strategy in which workers take more responsibility for things like medical costs, lifestyle choices and treatment decisions.
But health plans are divided over the idea, with some believing it created a competitive advantage, while others are skeptical and are proceeding cautiously, the report said.
Bits and Pieces:
I-Flow Corp., a Lake Forest medical device maker, said it received a three-year contract from HealthTrust Purchasing Group LLC of Brentwood, Tenn. Under the deal, I-Flow will make its On-Q pain relief device available to HealthTrust, which supports more than 1,400 hospitals, as well as ambulatory surgery centers, doctors and alternate care sites InSight Health Corp., a Lake Forest provider of medical imaging services, said it now is using patient check-in kiosks provided by Clearwave Corp., a suburban Atlanta healthcare technology company, at 16 of its locations in California and Texas. The kiosks allow InSight workers to verify a patient’s insurance eligibility in real time South Coast Medical Center in Laguna Beach said its weight-loss surgery program received a five-star rating from HealthGrades, a Web site that rates hospitals, physicians and home health agencies.