Hospital CTO helms pager replacement business

By Jonah Comstock
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SorensenMichael Sorensen, in his old job as chief technology officer of the University of Chicago Medical Center, had a problem: pagers.

Healthcare is one of the few areas where the pager still tenaciously hangs on in the age of the smartphone. A combination of factors contributes to this: many hospital CTOs find pagers more reliable than cellphones in a large hospital complex, and a switch to smartphones has to be done carefully to maintain privacy and security of patient information. But Sorensen didn't find the case for the legacy devices compelling.

"Pagers are not as reliable as everyone thinks they are. If you drill down, there's so many single points of failure that we were suffering outages all the time. We measured it in the most recent year. Within a calendar year, we missed about 2,000 pages," he said. "And then finally the other thing that was frustrated was the expense associated with it. I was spending over half a million dollars a year on paging services. That was one of my top expenses."

In addition, unlike pagers, smartphones can, in Sorensen's words, "close the loop" -- users can be notified when a recipient receives their message and when they open it. This ensures that, for instance, if a nurse sends an urgent message to a doctor who for any reason doesn't receive it, the nurse can try another doctor right away.

So Sorensen founded a company, called Stage 8 Systems, which he ran in a largely advisory capacity while continuing to work as CTO at University of Chicago Medical Center. Stage 8 Systems was developing a secure messaging system on BlackBerry before the iPhone was even introduced, according to Sorensen. When the company was acquired by software company Mutare at the end of last year, Sorensen left the University of Chicago Medical Center to become president of Mutare's newly established healthcare division.

"I either needed to go the route of VCs or find a company like Mutare. ... I was able to find a company that had some of this mass notification technology already in their portfolio, and then assume a key role that allowed me to drive the innovation and the market strategy," he said.

Plenty of startups are tackling the pager problem by including secure hospital messaging systems for smartphones as part of their offerings: AmcomVoalte, TigerText, and Docbook MD are just a few of the players MobiHealthNews has written about, many of which have been in the space for a number of years.

Sorensen feels many of his competitors (he didn't name names) are offering too basic a product at too high a cost.

"I don't want to trade my $500,000 paging bill for a $300,000 smartphone app," he said, referring to the 4,000-pager system he had at the University of Chicago Medical Center. "I want to drive that down as low as I can get it."

Sorensen said Mutare could get that number as low as $150,000, and their pricing scales with the number of users, allowing smaller practices to use the system for as little as $10,000. And on top of secure, HIPAA-compliant two-way messaging, the platform includes built-in disaster recovery (a back-up site kicks in in the event of a power failure at Mutare's facility or in the hospital), mass notification for non-patient information that needs to get out to all hospital personnel, and basic patient engagement messaging, like sending out surveys to help reduce re-admissions.

Mutare's messaging system, called Vital Link, works via a web application, as well as through native apps for iPhones, iPads, and Android and BlackBerry devices. Sorensen said the company is continuing to add features, and is also willing to customize the platform for hospitals' individual needs.

"What really drives me is I've got some customers that really get this, that get the platform concept. We have a major customer in South Carolina who says 'Couldn't I send notifications out ot family members in our surgery waiting area?' We get back here, we start literally adding on to the platform," he said. "We are building that custom and near-cost for that hospital. ... We come with these core capabilities, but if you want it to flash blue when you send a code blue message, we can do that. If they can tell me it will improve workflow and outcomes, I'm all set to make that happen."

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