Source Medical hired Dr. James Coffin as the new CEO, and he has big changes planned for the company.
Dr. Coffin is an established leader in the healthcare IT space. He built the IBM Healthcare & Life Sciences business into a $6 billion player and led the charge to make Dell among the largest healthcare IT businesses in the world. Source Medical's private equity team brought Dr. Coffin in to reorient the company and implement a growth strategy that makes sense for the outpatient surgery market of the future.
"One of the challenges facing the healthcare industry is consolidation," says Dr. Coffin. "It happened in the physician space and now it's happening in the ASC space. Not surprisingly, because of the bundled payment model trends in the industry, integrated delivery networks are seeing a need to consolidate all of the points of the healthcare continuum in their practice."
There have been several examples of ASC consolidation at the center-level with hospital joint ventures as well as at the management and development company-level. Last year Surgery Partners acquired Symbion and AmSurg acquired Sheridan Healthcare. Earlier this year, Tenet Healthcare announced plans to acquire United Surgical Partners International.
"There is much more happening in the healthcare arena than just consolidation; procedures are moving to the outpatient space and there hasn't been a focus by larger software companies to properly address changing market needs," says Dr. Coffin. "It was a small space traditionally and not interesting to larger vendors focused on acute care. We look at the ASC and physical therapy space as focal points. There is a large opportunity for us to become more than just a niche player."
Source Medical is already the largest player in the ASC industry, but that doesn't mean the company can slow down.
"We have to move the ball," says Dr. Coffin. "The future of healthcare is the outpatient continuum of care, everything from surgical centers to physical therapy, outpatient oncology and assisted living space all the way to home health."
The challenge for Source Medical now is to move from being the $63 million leader in outpatient surgical center software to creating a next generation platform that will enable a broad array of capabilities to improve clinical and financial outcomes outside the walls of a hospital.
"We see untapped growth in the outpatient space," says Dr. Coffin. "We're working on making sure that while providers are delivering care at the home health level the data is going back to the management company. How do you truly manage networks of contract clinicians, patient visits across multiple facilities, and tracking care and financial information over an extended period of time? We're working on building more effective analytics and tools to fill this market need."
But it's not only the technology that's changing; Dr. Coffin replaced three-quarters of the leadership team over the past three months. The new leadership team includes:
• Jonathan Isaacs — Executive Vice President and General Manager, Surgery Division, brings over 20 years of technology experience. Previously he worked at NextGen and Dell Healthcare & Life Sciences.
• Kareem Saad — Executive Vice President, Strategy and Business Development, came from Dell Healthcare & Life Sciences. Prior to that he spent several years with IBM's clinical genomics group.
• Matthew Phillips — Senior Vice President, Partnerships and Business Development, spent the last 15 years at Dell, Inc. He is a seasoned healthcare solutions leader with a broad skill set across multiple disciplines.
• Dan Trott — Vice President, Surgery Sales, was previously at Dell, Inc. His entire career has been in healthcare and life sciences, including positions at IBM and Kodak.
• Dennis Martineau — Executive Vice President, Product Development, came from Allscripts Healthcare. He brings over 40 years of experience in technology, research and development, and business administration.
• Britt Denning — Vice President of Commercial Operations, has over 20 years of high tech experience, most recently at NextGen and Dell, Inc.
All new team members have extensive experience in the healthcare IT space and bring a wealth of talent and experience into the company. Source Medical is ultimately looking to grow into a $300 million to $400 million company in the next four years, and has the financial backing to do so.
"If it doesn’t make sense to build it, we’ll figure out how to buy it," says Dr. Coffin. "We have private equity backing which allows us to expand. We are focused on Source Medical becoming even more of a leader in the outpatient space as patient care continues to shift to that area. We want to leverage the experience we have in the ASC industry to help our customers in a much more integrated way."
There are a few new strategies the company is trying out as well, including new partnerships to pursue growth.
"Historically Source Medical has not done a good job with its partnerships," says Dr. Coffin. "In the healthcare market, if you aren’t a good partner, you will not do well. When I was with Dell, more than 40 percent of business was through partnership channels."
The company also brought on ASC industry veteran Ann Geier to build up Source Medical's consulting practice and share her knowledge on ASC operations.
"Ann helps ASCs with process optimization and financial optimization," says Dr. Coffin. "This changes the way the ASCs deliver care for more efficiency and better quality."