Incorporated in 2003, Presidio spent its startup years developing core technologies by partnering with private physician practices to build out its proprietary platform, PerformMDTM. This platform was designed to replace manual, paper-based medical record tracking and physician performance management with automated electronic processes.
Founder and President Douglas Evans, MD, is a practicing Emergency Medicine physician, and served as the CFO for his Emergency Medicine physician group in San Francisco until 2019. He has directly experienced the frustrations and daily challenges of working in the antiquated healthcare industry, struggling with error-prone and siloed data to run his 85 physician group practice and pay his providers for their day-to-day work covering 24/7 Emergency Departments in the San Francisco Bay Area.
His goal today remains what it was at the beginning: build the best technology platform for capturing and managing clinical data and documents, enhancing physicians’ clinical quality and productivity while optimizing the reimbursement process for hospitals and providers.
Healthcare Revenue Cycle
The “Healthcare revenue cycle”, simply explained, is the process of how healthcare institutions and doctors are compensated for their services. The revenue cycle begins when a patient visits the hospital and completes the registration process. Once registered, a patient will typically be seen by a nurse and a doctor. Doctors and nurses capture details about a patient’s visit by recording relevant clinical data into an EMR (Electronic Medical Record). These details include but are not limited to the patient’s vital signs, complaints, physician activities, nursing activities, medications given, lab and X-ray test orders, procedures, etc. The granular data taken from each of these visits is critical to all downstream business uses once the patient is discharged. The quality and completeness of physician EMR documentation is the primary driver for optimal future billing and reimbursement.
Presidio’s market advantage starts with its 13+ years of industry experience focused on creative revenue cycle solutions for the US outpatient physician services market. The introduction of its NLP-driven data automation platform in a fragmented, mostly manual vendor market, sets Presidio apart from the service companies (not technology) that currently provide billing solutions to this marketplace. Presidio expects that with a significant technology and pricing advantage it will be able to disrupt and displace this market within 3-5 years. By investing early in its foundational PerformMDTM platform and AI-enabled Superchart infrastructure, and by leveraging automated data abstraction processes for multiple uses, Presidio will also be able to penetrate near-adjacent opportunities in the hospital enterprise markets.
Competition Matrix Description:
The competitive matrix describes the current marketplace that Presidio is expecting to disrupt. 1) Vertical axis describes the reference companies that provide services ranging from the lower end “general services” to a more comprehensive platform of services beyond the people based legacy coding and billing services that have been the standard for the past 50 years. 2) Horizontal axis defines the level of AI automation technology (low to high) that is applied to the core problem of data extraction and quality management for medical record management. The matrix quadrants can be defined as follows:
Basic general service and low level of AI automation: These companies are strictly service-driven and have no corporate DNA to pivot into a technology solution, other than by purchasing those solutions from a company like Presidio. Today, most outpatient physician groups purchase their solutions from these legacy providers.
Full-service platform and low level of AI automation: There are very few organizations in this marketplace that offer the value-add technical data management solutions together with the basic general services that run on that platform. Provider companies can purchase the excel-based low technology services or the platform service-only solution (example VeriDocs) but not the combined solutions that generally improve operational efficiencies throughout the entire revenue cycle process.
Basic general service and High level of AI automation: There are a handful of smaller point-solution companies (Linguamatics, Ciox, Apixio) that are tackling the AI problem set for single target domain verticals in healthcare. Most are targeting the large Hospital enterprise (Inpatient services) marketplace, while still only focusing on single point solutions for document data extraction or coding only solutions for the revenue cycle process. The larger companies (3M and Optum 360) both offer a full suite of general AI automation solutions, however, neither company offers a solution set that can be effectively consumed by the Emergency Medical coding enterprises in 2020. There are several newer AI company entries (ezDI, Medical Savant) that are targeting market-entry solutions like partial auto-coding without a turn-key coding platform- and these are limited solutions for ER companies. Fathom has been targeting the Radiology auto-coding market with some success but have gained little traction in ER coding due to the significantly higher complexity in this specialty’s coding problem set.
Full-service platform and high level of AI automation: Presidio is the market leader in the Physician market segment that combines the high value of an integrated data management platform with the cost savings and quality enhancing attributes of AI-driven automation solutions. By aggressively lowering the cost of running data management services in target revenue cycle businesses, Presidio expects to bend the price curve to the point where it captures the market from the quadrant 1 legacy providers with a competitive price-point, and/or force the entrenched service companies to purchase AI-enabled service platform in order to remain relevant to the marketplace.
What Presidio Does
Presidio’s platform provides pre-billing solutions for increased revenue capture and cost reduction.
1. Healthcare visit data is recorded by the nurse or doctor in an EMR system.
2. Medical Record Capture: Once charts are completed, the EMR data is captured and manually tracked for completeness.
3. Medical Coder Production: Medical coders are persons who are trained and licensed to read the nursing and physician documentation and convert it into standardized codes. The medical coder receives the data in one of two ways:
* Manually enters the codes into the hospital or other coding system, or
* The EMR medical record information is transmitted electronically into a separate coding system for efficient code capture
4. Quality Check: All medical coder data must be regularly audited for quality and accuracy prior to export into billing (Caduceus, 360 Medical Billing Services, etc.). Coders also should send all inaccurate or incomplete medical records back to the providers for correction and re-coding. Provider documentation performance is tracked and reported to the hospital or physician group for additional quality training.
5. Export: The claim data is exported to the billing system and a claim is then sent to the insurance company. Once the claim is verified the billing system may then send a bill directly to the patient. Doctors and hospitals receive payment for services from the insurance company, government payer or patient.
Efficiency and Revenue Capture
The technology benefits the customer’s cost structure as it decreases the number of employees required to manage data. Presidio also enhances service charge input, thus increasing provider billing.
Medical Record Capture and Reconciliation:
- Presidio integrates with all enterprise data systems
- Data Integrity Validation Automation
- Presidio Cost Efficiency (Direct Full Time Employee “FTE” Savings)
- Enhanced Charge and Revenue Capture
Medical Coder Production:
- Automation – Medical coding consumes at least half of the FTE cost of the pre-billing revenue cycle process and is the source of most errors and potential revenue loss. Presidio removes manual work by automating the necessary steps.
Quality Check and Billing Optimization:
- Quality Auditing and Compliance
- Coder and Provider Education
- Reporting and Analysis
PerformMD™ optimizes clinical document management and professional coding and is the cornerstone of the Presidio application suite. It is designed to leverage the latest in clinical AI technology to increase efficiency and human performance while maximizing accuracy and provider reimbursement. Everything is driven by Presidio’s proprietary SuperChart engine which is responsible for normalizing clinical notes into comprehensive, indexed documents of contextually relevant regions which can be further used for insurance coding, medical-legal research, clinical best practices or myriad other healthcare-related activities.
PerformCycle™ provides dashboards and a report panel which easily allows identification of critical areas of revenue leakage and human inefficiencies.
Case Study: US Acute Care
Presidio Health collaborated with US Acute Care Solutions (USACS) to provide a proof of concept for the PerformMD and SuperChart Coding assistance platform. The Presidio Team developed SuperCharts for each of five different USACS locations over a six-week period. For the study, Presidio Health provided two USACS coders with two-hours of training on how to use their platform. Presidio also provided two of their own employees that were experienced with the platform to serve as a productivity reference. USACS coders were compared to their enterprise benchmark coding rate. USACS found that with the assistance of SuperChart, they had a 23% productivity increased compared to their enterprise benchmark. Furthermore, it is estimated that the enterprise benchmark is not indicative of the actual productivity rate for each site. Therefore, it was calculated that the true productivity increase is closer to 56%. Below is a graph depicting the coder productivity data from the USACS Case Study. Data points can be found in the Data Room folder A, document titled “USACS ROI Response & Investment Summary.”
Presidio’s solutions are cloud-native applications developed on and running in Amazon Web Services (AWS). Presidio’s latest version, code-named Codigo, utilizes the most modern development patterns that deliver a hybrid FaaS (Functon-as-a-service)/SaaS (Software-as-a-Service) system that is fully reactive, delivering performance and scalability at a public cloud price.
Security in the cloud is another important requirement for any healthcare technology vendor. Presidio has teamed up with two of the leading firms in the area of healthcare cybersecurity. Armor security provides managed security service for Presidio’s current system which removes the active burden of monitoring and remediation of cyber-threat, while making it easier for Presidio to self-certify its systems under HIPAA/HiTech. Once commercially available, Codigo will run under the security umbrella of ClearData which manages all security aspects of the system running in AWS and allows Presidio to declare HiTrust security compliance, which is exceedingly important to larger healthcare institutions.
AI is at the center of Presidio’s technology focus. AI engines have become as ubiquitous as open source Java libraries; the question is not necessarily what AI technology to leverage, but rather how it will be leveraged to deliver value. Additionally, one must look at the entire ecosystem that surrounds the AI module in order to maximize its accuracy.
Data Acquisition from Hospitals is a key component to Presidio’s success. More and more hospital systems are under pressure to share data with outside vendors. While it is marginally getting easier, it still is a pain point for vendors like Presidio given the requirement of data feeds in order to provide the services the company provides. In order to overcome the resistance of hospital IT to work on data sharing projects, Presidio leverages many open-source technologies in order to make integration as close to frictionless as possible. Furthermore, Presidio Health is teaming up with Redox of Madison Wisconsin to lessen the burden of hospital connectivity given their integration industry footprint. The following is an abbreviated list of systems with which Presidio has built and run successful interfaces:
Technology Partnerships are important to Presidio health to make sure that the company can deliver, maintain and monitor it’s platform. The following is a list of some of the technology partners Presidio works with in order to run, secure, monitor and add value to the services we deliver
Presidio is a Linux-based development shop that relies on Java and many open-source technologies for its development
Presidio’s current development team consists of 5 full-time members and 1 part-time member, including the CTO. The U.S.-based team members are located in various technology centers in the U.S., while the Ukrainian team members are co-located in the European technology center of Kiev. The team is made up of senior java developers, a senior AI and data specialist, a senior product manager, user interface developers, quality assurance and a development operations team.
As Presidio focuses on RCM (Revenue Cycle Management) efficiency improvements through AI and robotic process automation, it is creating a “Centers of Excellence” strategy to address the critical areas of software development required for success in the next 5 years. Given the complexities and uniqueness of the U.S. healthcare market that demand domain expertise, Presidio must maintain a core, U.S.-based team that is well educated in the challenges and nuance of the U.S. healthcare revenue cycle. The company is also aware of the challenges of finding and hiring quality development talent in the U.S. at salaries that are affordable. Over the past 5 years of working in Ukraine, Presidio has found that talented software engineers are available at a 50% savings related to a comparable engineer in the U.S. Because of these factors, Presidio expects its development team to expand more rapidly in Ukraine, but anticipates a modicum of expansion in the U.S.
Presidio expects to expand all Centers of Excellence as follows:
Center of AI and Advanced Data Sciences
Presidio is building its team in Kiev around Alex Laptiev. With his Masters in Mathematics training from Kiev, Ukraine’s internationally recognized University (National Taras Shevchenko University of Kiev), he will lead and build out Presidio’s AI and big data product development team. This team is primarily responsible for clinical document feature extraction, document completeness detection, automated coding assistance, automated auditing and audit scoring. Presidio has chosen Kiev as the place to build this team due to Alex’s deep technology network and the availability of University-trained engineers in the region.
Center of Platform Services and Advanced User-Interfaces
Presidio’s CTO, Tom Gregory, is a seasoned professional in the area of application platforms, data systems integration and challenges surrounding the scaling of complex data systems and leads the development of Presidio’s software platform that must support the overall revenue cycle and scale to handle millions of patient visits. The core Platform Services team is located in the U.S. given the complexities and required team domain knowledge of the U.S. healthcare system. A key to Presidio’s success thus far has been the design of its purpose-built end-user applications that have been used everywhere in the revenue cycle from patient registration and payment collection to insurance coding and data administration. The Advanced User-Interfaces team is responsible for creating the next generation coding and auditing tools that will take full advantage of the automation being facilitated through AI and process automation. It is expected that this team will grow by adding members in both the U.S. and Ukraine.
Center of Data Analytics and Reporting
Ivan Porokh also hails from a top-ranking international technology University in Kiev, Ukraine (National technical University of Ukraine). He is responsible for leading the Data Analytics and Reporting platform (PerformCycleTM) development team for Presidio. This critical product platform continues to expand a unique solution set that provides the business intelligence and insights required by our healthcare customers.
Presidio has $2.5MM of trailing twelve-month revenues (TTM) recurring revenues from 24 master customers. The top master customer represents 45.62% of total revenues.
Note: 360 medical Billing Solutions is made up of 5 individual customers
The chart below outlines, a view of Presidio’s sales pipeline. The company continues to rely on channel partners like Caduceus, AthenaHealth, Azalea and Emergency Care Partners to provide opportunities. Separately, the company continues to push its direct sales effort pipeline.
Marketing Presidio leverages both traditional marketing solutions (conference and meeting attendance), industry newsletter ad placement, and modern lead generation services in order to reach its target market.
- Healthcare Professional conferences (National and Regional) including the National, regional and state ACEP (American College of Emergency Physicians) conferences, AHIMA (American Health Information Management Association), American College of Radiology and the Radiologic Society of North America (RSNA).
- Lead Generation includes services that identify and contact healthcare executive prospects and arrange a face-to-face or telephone meeting with the key decision makers.
Social Media Marketing: Across all businesses, only 14% of businesses trust marketing and advertisements, while 90% trust peer recommendations.1 This is especially true in the healthcare marketplace and requires a unique corporate and marketing strategy to identify and communicate with business prospects. Presidio has initiated development of an influencer marketing approach in order to leverage peer-to-peer engagement for all marketing efforts and expects to expand this campaign upon funding completion.
Identify, prioritize and market to Influencers through targeted content development and social media publishing.
Lead Generation through survey development, email campaigns and influencer networking.
Extending social media network visibility through focused thought leadership with content development leveraging high quality blog messaging, whitepaper and infographic materials.
1. Nielsen Online Customer Survey
The Artificial Intelligence Healthcare market is exploding at a 44.9% CAGR, which is expected to grow from $4.9 billion up to $45 billion by 2026. This growth is mainly a result of needing to reduce rising health care costs. As the data becomes increasingly complex and abundant, companies are employing the use of AI – based technologies such as machine learning and natural language processing (NLP) to synthesize data sets. Another growth factor has been the COVID-19 pandemic, as research labs and pharmaceutical companies world-wide are adopting AI technology in order to expedite the vaccine and drug development processes to fight the spread of the virus.2
North America Overview
Given that North America is generally more developed and technologically advanced, it is likely to be a paramount contributor to the overall growth during the forecasted period. In addition, the US and Canada spend high amounts on healthcare which result in the demand of increased focus on healthcare services and products.
NLP (Natural Language Processing Market)
The majority of NLP use in healthcare today is made up of speech recognition/dictation, data mining and computer assisted coding (CAC). CAC has become a main focus due to the transition from a reclassification of diseases, from ICD -9 to ICD -10.3 All in all, most electronic health records (EHRs) support the use of NLP but in most cases remain underutilized.4 The need and growing demand to synthesize data has overwhelmed Healthcare organizations (HCOs) leaving opportunities for NLP competitors, high tech giants, EHR vendors and many NLP startups. NLP software is still in its nascency but will continue to provide increased ROI for HCOs.
Regulations & Industry Standards
The healthcare IT industry is facing significant challenges and opportunities due to changes in regulations/industry standards.
ARRA/HITECH: In 2009, the US federal government enacted the American Recovery & Reinvestment Act (“ARRA”), which included the Health Information Technology for Economic and Clinical Health Act (“HITECH”). HITECH sanctioned the EMR Incentive program, also referred to as the Meaningful Use program (the “Meaningful Use” program), this program provided incentives to physicians and hospitals that can prove they have adopted and are appropriately using technology such as EMR solutions.5
ANSI-5010/ICD-10: In unity with requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the U.S. Department of Health and Human Services (“HHS”) is implementing a new version of the standards for HIPAA-covered electronic transactions, including claims, remittance advices, and requests and responses for eligibility. These standards are called ANSI-5010. HIPAA requires all entities who are covered by HIPAA to upgrade to the tenth revision of the International Statistical Classification of Diseases and Related Health Problems promulgated by the World Health Organization, also known as ICD-10, for use in reporting medical diagnoses and inpatient procedures by no later than October 1, 2014.
Provider Reimbursement: In recent years, there have been significant changes to provider reimbursement by the United States federal government, followed by commercial payers and state governments, which have fostered the move to a value-based system of care. For instance, the Centers for Medicare and Medicaid Services (“CMS”) has enacted several programs oriented around the establishment of Accountable Care Organizations (“ACOs”), which reward providers who demonstrate an emphasis on cost containment and quality improvement, specifically through care coordination and population health efforts. Another similar initiative is the Comprehensive Primary Care Initiative, which is working toward similar goals but with an increased emphasis on the role of the primary care provider. Perhaps more importantly, there is increasing pressure on healthcare organizations to reduce costs and increase quality, replacing fee-for-service with a value-based payment system, which could further encourage adoption of health IT beyond provider populations that are eligible for the Meaningful Use program. As a result, many healthcare organizations will need solutions EMR solutions since significant levels of reimbursements will be based, ultimately, on providing quality outcomes that are captured, communicated, measured, and shared through technology solutions.
PPACA: The Patient Protection and Affordable Care Act (as amended, the “PPACA”), which was signed into law in 2010, contains various provisions that have impacted and will likely continue to impact healthcare IT companies. Some of these provisions may have a positive impact by requiring the expanded use of products to participate in certain federal programs. Other provisions, such as those mandating reductions in reimbursement for certain types of providers, may have a negative impact on existing healthcare IT companies.
The combination of changes in federal and state law, the development of new industry standards, and various incentives that exist today for EMR use, ePrescribing, and pay-for-value initiatives, are moving health care towards an environment where EMRs are as common as practice management systems in all provider offices.
Presidio’s Target Market
Presidio is targeting the $3.4B US Coding services market6 with a Natural Language Processing (NLP) driven data automation opportunity of medical record transformation into billing codes for the US outpatient physician visit market. All of the 1.6 billion (2017) US outpatient visits require this highly manual, high cost and low-quality process today so that providers can get paid for their services.7
2. Artificial Intelligence in Healthcare Market. Markets and Markets. Jun 2020. https://www.marketsandmarkets.com/Market-Reports/artificial-intelligence-healthcare-market-54679303.html
3. ICD-9-CDM (International Classicfication of Diseases, Ninth Revision, Clinical Modification. TechTarget. 2020. https://searchhealthit.techtarget.com/definition/ICD-9-CM
4. Market Scan Report (Chilmark Research) NLP: Enabling the Potential of Digital Healthcare Era. 2018. https://www.chilmarkresearch.com/chilmark_report/nlp-market-scan-report/
5.ARRA, HITECH Act, Meaningful Use Overview. Excite Health Partners. May 2012. http://excitehealthpartners.com/news/arra-the-hitech-act-and-meaningful-use-an-overview/
6. US Medical Coding Market Size. Grand View Research. Published 2019. Found in folder C Market Overview.
7. Target Market Data/Diligence/C. Market Overview