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Thursday, Mar 28, 2024

Electronic Medical Records Provider Expects Growth

Not too many entrepreneurs are lucky enough to get the cash they need to start or buy a business, let alone $100,000 in crisp bills delivered in a brown paper bag. That’s just what happened to Randhir Tuli, however, when as a young accountant working for a physical therapy practice, a friend gave him cash to buy the business. “I told my friend over drinks one night that I’d love to buy the business,” he said. A few weeks later, the friend showed up with the cash. Three businesses later, this serial health care entrepreneur is finding himself in a similarly fortuitous situation—thanks this time to the federal government. With a big government push to incentivize doctors to adopt electronic medical records, his newest venture – Woodland Hills based MD Synergy Solutions — is set to take off. “This business has huge potential,” said Tuli, chairman and CEO. “It’s bigger than anything I’ve done before.” The company, which helps doctors make the switch to electronic records, expects to ink $10 million in revenue this year thanks to deals with large doctor groups such as Regal Medical Group and the Associated Hispanic Physicians of Southern California, as well as the newly formed Private Practice Doctors, a buying group that recently signed with the company. The company has grown to 120 employees to service the new business. But real expansion will come in the next three to four years, Tuli said. “I will consider us failures if we don’t reach $100 to $150 million,” in that timeframe, he said. Behind the huge growth potential is an aggressive push by the U.S. Department of Health and Human Services, which is using both a carrot and a stick to get doctors to finally give up paper charts and go electronic. The carrot is some $19 billion in awards under the 2009 American Recovery and Reinvestment Act. Doctors who achieve what the government calls “meaningful use” of EMR can reap $44,000 from Medicare and $63,750 from Medi-Cal over five years. The stick will come in 2015 when doctors who have failed to get on board will see their reimbursements cut by 1 to 5 percent a year The intent of the act was to spur adoption of a technology that by some estimates could cut 5 percent from the U.S. health care system, or some $100 billion, and help save lives. But success is far from assured. Tuli will have to fend off nearly 1,000 EMR vendors that have entered the market just in the last two years, according to the Millenium Research Group. It’s become one of the most hotly contested businesses in the U.S. today, and it’s a business that Millenium says will be worth $8.3 billion by 2016, growing at an annual rate of 12 percent a year. One huge obstacle remains doctors, many of whom have calculated that even the penalty is not worth the installation nightmare, including lost time and productivity. Adoption stands at just around 10 percent in this area, said Jim Coburn, director of Gold Coast Health IT Resource Center, a regional extension center funded by the federal government to guide doctors in implementation. He believes adoption will leap to 30 percent in two years. “There is no recession going on in this business,” Coburn said. “It’s like the dot com bubble and MD Synergy is perfectly positioned to benefit.” Tuli certainly hopes so. He bought MD Synergy in 2006 after buying and selling two other health care businesses. At the time, the company offered only practice management services. With EMR becoming a hot topic, Tuli saw an opportunity to build a platform of cloud-based software services for physicians, including EMR. He says his product is different in that it’s highly customizable and easy to use. And he says MD Synergy can take an office live in four to six weeks compared to some systems which can take six months.

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