Health IT, Startups

A Q&A with AristaMD CEO: The shifting landscape of the specialist referral software sector

Rebecca Cofinas, AristaMD CEO, said in response to emailed questions: “We see ourselves as experts focused on a single but critical issue. We dramatically improve the specialist referral process and allow physicians to collaborate in real-time.”

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A few years ago, physician referral software was a popular area for health IT startups. Now they are getting snapped up by larger health IT vendors seeking to diversify their businesses as accountable care organizations, patient-centered medical homes and hospitals seek to do a better job of coordinating care and stem network leakage — when patients use out-of-network physicians.

There were 14 deals totaling $58 million in the practice management and referral category in the first half of 2016, according to data provided by Matthew Barbour, a Mercom Capital Group spokesperson. It’s a hot area and one that has seen quite a bit of deal flow. Last year, SCI Solutions acquired Clarity Health, an SaaS company that sought to improve the success rate of referrals.

San Diego-based AristaMD’s fundraise this week reflects the latest health IT startup to throw its hat into the physician referral space. The software company’s strategy is to improve communication between primary care physicians and specialists with digital consults that can lead to referrals.

The Stark law poses its own challenges to the progression of value-based care and leakage, according to a Modern Healthcare article published earlier this month. But I digress. Here’s a Q&A with AristaMD CEO Rebecca Cofinas, in response to a series of emailed questions I lobbed at her.

Why did you start a company focused on physician referrals when the market is so crowded already?

AristaMD focuses on providing significantly more efficient care than the status quo by asking a simple but complex question: Does this patient need a specialist referral or not? The data suggests up to 60 percent of referrals made to specialists are clinically unnecessary, and many patients do not need to be seen in- person. We focus on partnering with physicians for tailored work-up checklists and eConsults to resolve a majority of routine consults without triggering the need to see a specialist in-person. We partner with innovative providers that are rapidly embracing the concept of value-based care, not just do more, bill more, get paid more.

I started this company after seeing first-hand the need. I have been the chief operating officer of two major hospitals at Scripps Health and on the delivery side of healthcare for over 20 years. I was completely dissatisfied with the solutions available in the market and left to start AristaMD because I became passionate about the need for this new delivery model.

What does AristaMD offer that the likes of Refer WellFibroblast and Infina Connect and others don’t?

Other companies are doing important work in this space, but they are not doing what we are. We focus on answering the first but most important question: Is this referral necessary, and how can we improve the care plan without triggering the need for an in-person visit? When you get this answer right, everything else is an improvement down stream. The highest acuity patients are seen in much shorter time-frames, clinical outcomes are improved and physicians’ precious time is saved because they see the patients that need them the most. We can work seamlessly with other scheduling or automation systems that do something important but completely separate from us.

Do you see yourselves as niche players?

We see ourselves as experts focused on a single but critical issue. We dramatically improve the specialist referral process and allow physicians to collaborate in real-time. This is not a small problem or issue, as referral rates have doubled in the past five years and are set to double again. Our physicians deserve better technology that respects their time, supports how they practice and honors the value of true provider-to-provider collaboration. We have dedicated ourselves to that mission so that is our niche.

What aspect of physician referrals do you see as having the biggest opportunities for your business?

We see triaging, assessment and answering routine consult questions with our Work-Up Checklists and eConsults as the biggest opportunities around referrals. We have been able to resolve an average of 55 percent of all questions that go through our guidelines and eConsults. This is dramatic in terms of dollars and time saved. We also see a significant reduction in ER visits and hospital admissions. Making our healthcare system truly and fundamentally more efficient serves everyone — patients, physicians and payers.

Who are your competitors?

AristaMD is the first comprehensive solution in the market offering both clinically proven work-up checklists and eConsults. The AristaMD solution is proven to reduce overall specialist visits by 30 percent or more while also reducing ER visits and hospital admissions. This is a new model of care, and we are the first and currently the only company to focus on this critical area.

What will the funding allow AristaMD to do? How many hires does it plan to make? In which areas?

Our recent funding will allow us to continue to enhance the functionality of our platform and add additional program and service support. We believe our clients deserve an outstanding user experience and support. Our statistics from our users tell us we’re on the right path with a 9.1/10 likely to recommend, net-promoter score of 74, 95 percent of users saying the program significantly changed their care plan and a 55 percent resolution of routine consult questions.

How much has AristaMD raised to date? Where did the company get seed money from or is it bootstrapped? 

We have raised $11 million to date. Our initial seed funding was from two neurologists I knew from Scripps Health and myself. I will always remember the day we decided the time was now to start this company and am eternally grateful for their early vision and support. We quickly had Avalon back the company as our lead investor and Correlation followed. Our future is bright and we are grateful to be on this journey.

Photo: AristaMD