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Health Care's Big Opportunity
How many public school teachers do you know who have become successful entrepreneurs, pioneered an industry and created a multimillion-dollar company?
Steve Schelhammer is one of them. By the mid-'80s, he had switched to selling hospital supplies. By the mid-'90s, Schelhammer had turned entrepreneur and helped pioneer the disease management industry.
Accordant Health Services, his first venture, was a disease management company providing services for 15 unusual or rare chronic diseases like Lupus, multiple sclerosis, cystic fibrosis, hemophilia, myasthenia gravis and Crohn's disease.
Selling to managed care plans, Accordant brought education and information to the table, which increased quality and decreased costs for those very expensive diseases. The company had 300 nurses in its call center working with patients. Health insurance company Humana was its first major customer.
"We raised around $28 million in four different rounds. I sold the company in 2002 for over $100 million," Schelhammer says. "By the time we sold the company, we were dropping around $3.5 million EBITA to our bottom line. The revenue level when the company was sold was in the range of $25 to $30 million."
Soon, disease management was being recognized as a core strategy and capability for many health care organizations. But Schelhammer had his own observations on the industry. "One of the problems of the first generation of disease management approaches across the board was how to actively, effectively and consistently engage the physician in the process," he says. "We were coming through health plan sponsorships, so physicians were sometimes leery as to what [we] could offer them as a solution. We had to work very hard to engage them. We did an OK job, but I always felt if we had done a better job we could have had more impact on our program."
In 2008, Schelhammer became chief executive of Phytel, a patient care management company in Dallas, Texas. Phytel finds patients who are out of compliance with the recommended care of their chronic diseases. "We motivate those patients to reconnect with their physicians," Schelhammer says. "We architect and interface with the physicians' practice management systems, and the electronic medical records system if they are using one, and we sweep that data into our data environment.
We have an automated communication capability wherein we automate outbound messages in the name of the physician to book an appointment and come in."
Schelhammer saw the company as a perfect place to bring a more meaningful and relevant solution to the marketplace. For a number of years, key luminaries and decision makers have been driving payment reform to physicians. They want payment amounts tied to the physician's ability to improve quality, health and results. Increasingly, physicians are part of pay-for performance programs, making Phytel's solution attractive for them