COMPANY BACKGROUND

Sage Healthcare Division is part of Sage North America which is the North American operating company of Sage Group plc , a large UK-based business management software company.  Headquartered in Tampa, Florida, Sage Healthcare Division is a leading provider of software solutions for the ambulatory physician market and offers a range of integrated business and clinical solutions including practice management (PM) software for billing, accounting, human resources, and payroll; electronic health records (EHR); business intelligence tools including practice analytics and performance dashboards; an electronic data interchange platform; and practice portals for connecting patients with their physicians.  The company's key brands include Sage Intergy, Sage Intergy EHR, Sage Medical Manager, Sage HealthPro XL and Sage Intergy RIS. Sage Healthcare Division provides their business and clinical solutions to more than 80,000 physicians in the United States; more than 1,000 medical professionals are currently using their clinical applications.

PERSONAL BACKGROUND

Betty Otter-Nickerson

Betty Otter-Nickerson joined Sage North America as President of the company's healthcare division in February 2010. Otter-Nickerson is responsible for strategic vision and operations, building on the company's more than 25 years of innovation in the healthcare field and brings to Sage a strong technical background in software, organizational and leadership development, an entrepreneurial spirit, and experience building a patient-centered movement in the healthcare arena. After beginning her professional life in social work, Otter-Nickerson's career has extended to the corporate and nonprofit arenas. Her early enterprise IT experience includes positions held with the Board of Regents for the State of Florida, TRW, Syntex Pharmaceuticals, and the Lower Colorado River Authority. She then spent 10 years at BMC Software, advancing from R&D product line manager to vice president of operations for product management and development, where she focused on worldwide operations for BMC's enterprise management solutions. After BMC, Otter-Nickerson pursued entrepreneurial and risk-based ventures as the president and CEO of both Vincera Software and Gallery Watch.  She most recently was COO of the LIVESTRONG Foundation, where she provided executive leadership for the foundation's activities and was instrumental in the development and growth of the LIVESTRONG Survivorship Center of Excellence Network, gaining international recognition for the network as an innovative, reputable, and sustainable model of cancer survivorship care in large academic medical centers as well community practice settings.

FROST & SULLIVAN INTERVIEW

How did your professional career evolve from your beginnings in social work to your current position as CEO of Sage Healthcare Division? What were some of the key lessons you learned along the way that are applicable to your present role?

I describe my background as very eclectic.  I started out as a social worker dealing with abused children and with geriatrics.  I really enjoyed working with people but I also discovered that I really like problem-solving and solving puzzles. Eventually I decided I wanted to become more involved in business and worked in IT capacities in several industries including education, defense, pharmaceuticals, and public utilities.  Then I joined business service management vendor BMC Software. I came in at the early stages when BMC was doing under $300 million and grew my career with the company as they evolved into a $1.2 billion global business.  At BMC, I worked on a variety of projects in corporate environments and I also brought the company's first Internet product to market. So, I learned a lot along the way and especially realized that meeting the customer's needs is the most important thing that you can do in any market.  And, I also learned how to grow and energize a business and how to get people organized in a team to meet business and market objectives. From BMC, I became involved in a couple of Internet start ups. This was in Austin around the time of the early dot.com boom and it was hard not to get caught up in that.  While I was at Galley Watch I was contacted by the LIVESTRONG Foundation who I had previously become familiar with through my work at BMC where we had supported their mission early on.  I spent five years as the COO of LIVESTRONG, and, in the process, learned a lot about how the nonprofit world works as well as a great deal about the healthcare system including how to connect patients with information.

Two of my key accomplishments at the LIVESTRONG Foundation were particularly valuable. First, the LIVESTRONG Survivorship Center of Excellence Network; I call this the forced collaboration model. This is basically a network of National Cancer Institute-designated comprehensive cancer centers across the U.S. and the focus and mission is to improve the quality of care and the quality of life past diagnosis and past treatment.  During the development of the network, I had a chance to work with large academic medical centers.  Out of that experience, we developed the LIVESTRONG Care Plan, which is on online tool that provides cancer survivors with information regarding the health risks they might face as a result of cancer therapies. This project was inspired by the 2005 report from the Institute of Medicine (From Cancer Patient to Cancer Survivor: Lost in Transition) recommending that cancer patients get a summary of their treatments and a follow up care plan. The LIVESTRONG Care Plan provides patients with a look at life going forward after they've completed treatment and helps them connect with their primary care providers when they are no longer seeing their oncologist.  We were very involved with the American Society of Clinical Oncologists (ASCO) at the Foundation. ASCO is predicting a significant shortage of oncologist for the future. Part of the purpose of the LIVESTRONG Care Plan was to try to help address that shortage and also provide a variety of tools to help informed decision-making for patients.  The Care Plan project made me excited about the broader potential for applying information technology solutions to improve the quality of healthcare and also made me realize how much I missed the software industry.  Luckily, it was around this time that the opportunity with Sage came up.

Given your diverse professional background, what are some of the unique perspectives and vantage points from which you approach the healthcare market?

My mother was a surgical nurse and my father was a hospital administrator and I grew up on military bases were I saw managed care delivered by the government. I personally have always had great access to healthcare but as a social worker and then while at the foundation, I saw that the quality of healthcare for a lot of people is lacking in many ways and that people face challenges in receiving adequate care. I also realized this when caring for my own parents and really saw that the lack of communication and coordination among doctors was a big issue.  I began to increasingly question why the system is so lacking in information sharing and what could be done to address these issues, including technology solutions.  The perspective I bring to Sage is that of a consumer, a patient, and a business manager - all these attitudes influence what we are tying to do. My job is to ask a lot of questions and to change things. Having a different view point is very valuable.  We are willing to try new things. I am assembling a management team with people coming in from a variety of industries, not just healthcare.

With regards to technology solutions to improve healthcare quality, what are your general thoughts about electronic health records (EHRs)  - what's good and what needs to change?

I think there are a lot of really good EHRs on the market whether it's a product from one of our existing competitors or from one of the new startups that we run across. What I see that's unique about the EHR market today is two things - first, the HITECH stimulus and then healthcare reform. We all understand that Medicare and Medicaid cannot continue on in their current form, and we seem to be finally coming together to change our healthcare system. And what that means is trying to change behavior.  This is a tough thing to do. It's not so much that EHRs themselves are good or bad, it's just difficult to get people to change the way they do work.   No matter what industry you are in, people buy a tool and then try to change the tool to do their job the same way instead of taking the approach that this could be a fresh palette to reengineer what they're doing and make it better. So, EHRs all have pros and cons whether its too much or too little in terms of features and functions.  I think it comes down to helping physicians understand that EHRs are a way of enabling them to deliver better care vs. a tool that's going to replace them. It's not about the technology; that's just the enabler.  You need to stay focused on what you are trying to accomplish with the technology.  A tool is a tool and not the panacea.  Unfortunately, some people are looking at EHRs as the pancea.  Any EHR that is going to be readily adopted has to have two things - first, it has to have a really easy and intuitive user interface, and second, it must be easy to incorporate into workflow. These are the two most important criteria that physicians care most about. Physicians cannot afford significant disruptions.  If any technology tool impacts a physician in a negative way, it will not get adopted.

How specifically will the prospect of HITECH stimulus funds and healthcare reform impact physician practices with regard to funding EHRs, ownership structure, increased patient volumes, and greater emphasis on quality measurements?

Some physicians remain skeptical about government programs and aren't sure that they will be reimbursed for their EHRs.  Implementing an EHR can be a significant investment for many physicians that is above and beyond the amount the government is providing.  Plus, there are human capital costs to consider, like the need to train staff to use the technology. Physicians want to know very clearly - how is this going to help me?  How is this going to help my patients?  We as a society and community need to emphasize the promise of EHRs to deliver better care. I'm surprised the quality issue doesn't resonate more. As far as practice ownership, we will likely see an ebb and flow of how that evolves over the next few years.  There will probably be some increase in hospital affiliations because some physicians will not want to continue to deal with the increasing financial burdens of running a practice. But personally I think this will swing back the other way because Americans like owning their own businesses, especially physicians. That's been the tradition.  That (independently-owned) market segment will never go away. Healthcare reform will drive the use of HIT with increased numbers of patients coming into the system and so will the greater emphasis on quality. Effective, efficient, and quality healthcare equals HIT. Healthcare reform is not just about the way we deliver care but about delivering better care.

How do you see physicians engaging with EHR technology? Will they be dependent on their staff like many are with practice management systems?

To some extent this is a generational issue but not always. Younger physicians with greater exposure to IT will inevitably be more comfortable but we are seeing many physicians who are very engaged with the technology. Physicians who are more used to using notes and transcription may have a harder time adjusting. Another concern is where does the patient fit in?  People don't want to see their physicians looking at a computer or a device and not them.  I think mobile devices are a big driver for the increased use of technology and will also improve the quality of life for physicians.

How will the EHR adoption trajectory evolve?  What's the tipping point?

Physicians are continuing to purchase EHRs and many others are actively considering purchase.  A segment of the physician market will be interested in being first. The changes in the meaningful use requirements that take a more incremental approach will help. From an adoption standpoint, the physician does not have to use every feature and function of an EHR to be successful.  Like with a lot of software programs, all the features can be a bit overwhelming.  A more incremental and measured approach to adoption is needed. I think the biggest jump in adoption will likely happen over the next two years as opposed to this year. The huge tide will take off, but slowly.

How is Sage Healthcare positioned in the growing market for information technology for physicians?

Sage Healthcare is a patient and physician centric company. We offer an integrated product suite that gives a 360° view of a physician's practice, especially for small group practices, i.e., over two physicians.  We have a portfolio of software tools beyond EHRs and practice management systems including accounting, human resources, and payroll systems, and I think this really distinguishes us in the marketplace. Our main focus today is small group practices but we are moving into serving all types and sizes of physician practices in the ambulatory space. However, that doesn't mean that we won't move into other markets beyond ambulatory.   Right now, we are focused on helping physicians meet meaningful use requirements for the right reasons - that is, quality improvements, and not just the financial benefits of HITECH stimulus funds.  We are really able to be a business partner so that practices can be financially successful and provide the best quality of care. We also believe that sharing information is critical to this process.

With regards to information sharing, how do you see the health information exchange (HIE) market evolving?

A lot of people are still trying to figure out how the various HIEs will evolve, and, particularly, how to monetize this environment. It's tough to predict. Private HIEs will likely be more important initially.  But it's so important to have information exchange on a national level.  The lessons of Hurricane Katrina make that very clear.  We dealt with this when I was at the Foundation; I saw first hand how lost medical records impacted cancer patients. But we will branch out into HIEs; this will be a critical part of the way that we live in the future.

How do you see patients' perspectives on their doctors' use of information technology and EHRs? Do you see patients getting more involved via patient portals and personal health records (PHRs)?

Patient portals can help people engage with their physicians but there are limits with this today. Patient scheduling, for example, can be a challenge to coordinate through portals.  But these systems will evolve and some services offered via portals may be supplemented by external consultants.  Patient portals will likely have a key role in the greater emphasis on wellness programs that we're seeing.  Corporations in particular are placing greater emphasis on wellness and preventive care as a means to drive costs out of the system. These programs have a significant patient education component that can be delivered via patient portals.  It's a convenient way to educate a whole new group of consumers currently outside of the healthcare system. Other drivers for portals include the convenience factor and the role of caregivers, e.g., people who are taking care of children or elderly parents.  This brings up a whole host of issues around privacy, authorization, and authentication. As far as PHRs, these have been slow to take off but could evolve in many ways.  PHRs and EHRs could converge for more disease-specific situations, especially in managing patients with chronic conditions like diabetes or heart disease. This can be a great way to keep track of a variety of information for patients and their caregivers. But in terms of information going back and forth between an EHR and PHR - I don't see that there should be a lot of this. Physicians are wary of information overload in EHRs. The PHR model needs to evolve so that they can deliver more value.  Again, this will likely be in the area of chronic disease management. So, ultimately, this means that patients will question if doctors are not using EHRs.