HIStalk Connect Interviews Joe Reinardy, Founder and CEO, CenterX

Joe Reinardy is founder and CEO of CenterX of Madison, WI.

8-7-2013 6-33-15 AM

Tell me about the company.

CenterX is what we like to call the nation’s next e-prescribing network. We’re building what we speak about internally as e-prescribing 2.0.

When we talk about e-prescribing 2.0, we’re referring  the e-prescribing that has been adopted in the United States over the last 2-4 years. E-prescribing 1.0 is largely the sending of electronic prescription messages from a doctor’s office to a retail pharmacy. If a patient goes to the doctor’s office, the doctor orders a prescription for the patient and says, “Which pharmacy do you want to go pick this prescription up from?” The patient can say, “I want to go to Family Drug Store on Main Street” and the doctor can look up the address electronically and send an electronic copy of that prescription directly to the pharmacy through the Internet rather than writing it on a piece of paper and giving it to the patient and having the patient act as courier of that piece of paper to the pharmacy.

In the last several years, the government has incentivized doctors to adopt e-prescribing. They have done so quite a bit. It’s gone from an insignificant adoption rate in about 2008 to about 44 percent of doctors reporting using e-prescribing in the last year.

CenterX wants to take that adoption and the use of that technology and turn it into something more clinically meaningful. Something that reduces the cost of healthcare and shares relevant information with the various providers of care for a given patient. In the next generation of e-prescribing, what we really want to do is close the feedback loop.

Today the status quo is that doctors send messages to pharmacists, but they don’t get any feedback about whether or not their patients are taking their medications, whether the patients can tolerate the medications, or whether the patients are getting better. The CenterX network simplifies the financial model around e-prescribing and closes that feedback loop. A doctor gets information about, did my patient pick up their medications, are they getting better, or do I need to pick up a phone and call them and ask them why they’re not taking their meds?

 

Closing the feedback loop is a powerful concept. A lot of companies are trying to innovate at the far end of the loop, the patient end. Companies like AdhereTech, Scanadu, and Proteus, for example. Are you trying to provide the signaling, routing, and transfer infrastructure for all these different kinds of data?

Yes. We would welcome data from anywhere that you can get it. Ultimately what the doctors find useful is knowing exactly what the patient is taking, when, and why or why not. If he can get as close to an actual feedback mechanism that says this pill was ingested by this patient at this time, that would be the ideal situation.

If there are device companies that are coming online and that they’re able to make progress with pharmacies or with health plans and selling their tracking products, those are products that can provide very useful data to us. We act as an aggregation point for a lot of these companies and types of data they create.

 

Has CenterX exposed APIs to make all of that happen?

Yes. We’ve exposed APIs exposed to receive any kind of data.

 

You mentioned that you have a different pricing model than Surescripts.

Surescripts and the other companies in the space charge anywhere between $0.25 and $0.30 per prescription. They penalize patients, doctors, and pharmacists per prescription. This is called transaction-based pricing.

Our model is fundamentally different. We charge a flat monthly fee and share the cost among everyone that’s involved: providers, pharmacies, and payers. Prescribers pay just $5 per month for unlimited transactions. We are in many cases two or even three orders of magnitude less expensive than the status quo. Our pricing model encourages participants to use new technology and to use new message types, such as refill requests, cancellations, adherence notifications, and missed notifications.

 

I can see why pharmacies and payers would be willing to pay, but why would PCPs?

We bring value to PCPs in two forms. We bring value in immediate release to the doctor’s financial ledger every month as soon as they sign up for our network and start using our network. As soon as they’re paying their monthly subscription fee, we are having a real impact their budget constraints.

Firstly, refill request messages, when a patient has filled their script or already filled their scripts three times and they need a new prescription to extend the treatment of whatever drug they’re on, whatever medication they’re participating in. They need to notify their doctor that they need a new script. That’s what’s called a refill request in the e-prescribing world. Those refill requests have been allowed or permissible on the prescription network or other e-prescribing network for years, but their adoption rate is very low.

Last year, fewer than five percent of refill requests went electronically through an e-prescribing network, as opposed to being delivered via phone or fax. So for a $5 per month subscription to our network, we can get rid of the faxes, we can get rid of the callbacks and get those things electronically into the EMR. The other thing that having an electronic refill request provides that doctor is an accurate and discrete type data list of the medications that they’ve written for this patient in the past and that they’ve taken.

The other problem we help alleviate is prior authorization faxes. We can provide the messaging and routing to expedite that process dramatically. The top six drugs account for 10 percent of all drug costs. Not 6 percent of the drugs — six specific medications. Each of those six medications has what’s called a prior authorization, a paperwork process that takes anywhere from six to 20 hours to complete. You have very expensive meds that are important to patients that the patients can’t start treatment on, for sometimes up to a week if that paperwork process hasn’t been filled out.

We automate their prior authorization process. It’s electronic prior authorization process. It saves hours per week per doctor. For a $5 per month subscription fee, they’re getting rid of their refill faxes and they’re getting rid of the callbacks, the hours that they’ve spent working on prior authorization just to make sure that their patient qualifies for the treatment that they need.

 

Can providers use CenterX in conjunction with their existing network provider or is it a mutually exclusive switch?

CenterX is not mutually exclusive of SureScripts or any other e-prescribing network. We do not, however, share data or traffic with other networks. We provide a different level and layer of support.

We provide a comprehensive solution that for some clients meets all of their e-prescribing needs. But for most of our clients, we need to grow our network in their communities and demonstrate our capability as an excellent service provider before they can risk single-sourcing their e-prescribing services. Typically, we start working with a new client by finding which e-prescribing services that client is not currently using. In that way, we sit right along side other e-prescribing solutions.

 

How did you get into this business?

I have a BS in chemical engineering from Michigan Technological University. I worked as an engineer in product design, manufacturing process design, and operations for Kimberly Clark for five years, including brands such as Huggies, Depends, Viva, Scott, and Kleenex.

I wanted something that made me feel more engaged with the customer, an opportunity to do something every day that I thought needed doing. I supported Epic’s first standard implementation of e-prescribing for one of the larger healthcare organizations in the world. Not long after that, I was asked to lead the e-prescribing team as CMS issued a mandate to eliminate computer generated faxes for scripts.

I ran the e-prescribing department at Epic for a number of years. Over that time period, I oversaw the connection of 200 of Epic’s customers to the e-prescribing networks that were available in that timeframe. I saw it was a marketplace that was underserved and was really still struggling just to get a business model off the ground that I thought would be obsolete by the time it was successful. I decided that I would leave that job and started an e-prescribing network.

When I left Epic to start CenterX, I turned to my best friend for help. Our roles have evolved as we find new team members. I wrote the first version of our Web services, but most of what I had written has been revamped by our software architects, who are true computer programmers and mathematicians.

Today I provide technical guidance from an experiential basis. I have years of experience implementing and supporting standards-based interfacing, specifically in e-prescribing. I guide our developers to deliver a robust NCPDP and HL7 standards-based architecture. I’m primarily in charge of strategy. Chris, my business partner, manages the day-to-day operations and is responsible for client relationships.

I often say that I’m an engineer and not an entrepreneur. CenterX is a startup by necessity. I believe that effective change in the e-prescribing industry must come from an independent, organically grown company. I don’t see myself ever leaving CenterX to do the small scale startup thing again. I have developed tremendous respect for the difficulty of entrepreneurship. I enjoy it, but I think e-prescribing has a lot of opportunity for improvement. I could spend my entire career advancing that industry while maintaining that satisfactory sense of direct client engagement that I wanted in 2006.

 

Tell me about the company.

We are a privately-held company. We started the company on November 11, 2009 in Wisconsin.

I say “we.” At the time, I was otherwise not employed in any meaningful way and a business partner joined me with the LLC. He had a full-time engineering job working for a large paper company, but it was basically the two of us. We filed the LLC paperwork and worked out some of the details of the business plan. 

We had the technology portions of the business plan worked out, but we didn’t know how to get from idea to reality. It’s pretty tricky to try to negotiate contracts with doctors and pharmacists at the same time who are serving the same patient population.

We spent about a year working on the business plan and writing the first version of the software that runs our Web services. After that first year, we started selling, pitching our product, our solution to a number of perspective clients. We received some very useful feedback that said, “This isn’t quite plug-and-play for us yet, but it’s interesting. Don’t throw it away – we would be interested in talking more.”

At that time, we decided we should go out and get some money. We raised from friends and family somewhere under $200,000. We are now 12 employees. We have not had to go back for any additional funding. We can feed ourselves today.

 

Any final thoughts?

There’s a better, cheaper, faster alternative to the e-prescribing monopoly.

  • Curious

    Wondering if CenterX has any actual e-prescribing clients yet. Sounds great but I haven’t heard of anyone using their network, just more hospitals, clinicians and EHRs expanding their relationship with SureScripts.

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