Monday, September 17, 2007

ASP Me No Questions

Born in Alexandria in 69 BC, Cleopatra became one of the most famous women in all of history. A stunningly adept politician and businesswoman, she inherited the Egyptian throne at the age of 18. A cunning linguist (who was fluent in nine languages), her intelligence and wit were backed by strong mathematical skills. Burning with ambition and devoted to her country, she proved to be a talented and popular queen. Although forced to marry two of her younger brothers in order to protect the Ptolemaic dynasty, Cleopatra was nevertheless instrumental in the deaths of several of her siblings.

A wily strategist, the woman knew how to use sex as a political tool. JuliusCaesar gave her a son, land, power, and great wealth. Her face even appeared on Roman coins. By 41 BC, when Mark Antony invited her to Tarsus, Egypt was in dire economic straits. Having learned about the proud Roman warrior’s ambition, drinking, and limited intellectual capabilities, Cleopatra made an intentionally vulgar entrance dressed as Aphrodite, the goddess of love. Her strategy was designed to flatter the ego of a middle-class soldier like Antony. The ruse worked brilliantly and Cleopatra’s winning streak lasted for nearly another decade.

After many battles, however, her political power began to fade. Following Antony’s death, Cleopatra was taken captive by his brother-in-law, Octavian (who planned to display her as a slave in the cities she had once ruled). Even as she plotted her own death, Cleopatra’s wits never failed her. While under heavy guard by Octavian’s forces, she managed to smuggle the instrument of death into her chambers in a way that could easily pass the gaze of the Roman guards. Determined to die with dignity, Cleopatra arranged to have an Egyptian cobra hidden in a basket of figs. Knowing that the cobra’s venom would quickly spread through her body and kill her within minutes of the snake’s first bite, Cleopatra reached into the wicker basket and -- as legend and Elizabeth Taylor would have us believe -- quietly brought the asp to her heaving bosom.

Because Egypt’s religion held that death by snakebite could secure immortality, when the Queenof the Nile committed suicide on August 12, 30 BC, she did much more than triumph over Octavian. In death, Cleopatra achieved her final goal: not to be forgotten.

The rest, as they say, is history.

Rather than delivering the kiss of death, an ASP (application service provider) is designed to breathe new life into today’s medical transcription industry. With the growth of Internet technology, an ASP’s strength lies in enabling people from any number of remote locations to access the same software at the same time without ever having to worry about software upgrades, cross-platform issues, networking conflicts, or document delivery problems.

The business/financial model of an ASP depends on a hospital or MTSO continuing to buy its services. The ASP essentially ties these parties together so that, from the customer’s perspective, they have a pay-as-you-go philosophy. Meanwhile, from the ASP’s perspective, there is a receive-as-you-go philosophy that helps a new business to thrive.

Unlike previous business models -- in which hospitals and MTSOs budget for capital expenditures that include upgrading digital dictation systems, their suite of office products, and the computers at each transcriptionist’s work station -- the use of an ASP can effect an easy transition to a much higher level of technology. Unlike traditional digital dictation system vendors or “box” companies(where revenue arrives in large increments), the business model for an ASP allows for a steady stream of revenue that can be projected with a certain degree of accuracy.

In many situations, an ASP can handle all the technological needs of a small business or a hospital trying to cope with healthcare information management issues such as secure transmissions, document storage, report retrieval, remote printing/fax/email capabilities, electronic billing and data mining. Accompanied by some very slick marketing tools and lushly funded by venture capital, today’s ASP technology can be extremely seductive.

But at a cost, to be sure. The devil lies in the details.

The standard sales pitch is that an ASP will only charge a certain number of cents per line for its services. And that, by consolidating the number of middlemen a hospital or MTSO must deal with, if the ASP performs its duties well, business will move further along. But because the technology is so new and the target market relatively naive, it is easy for the sales team to skip over some critically important pieces of information which would concern sophisticated shoppers. Questions that could easily be raised by informed buyers should include:

● Who owns the data?

Who gets the revenue from data mining?

● Will data mining be done without the client’s express consent?

Who has access to the MTSO’sclient information?

In the past two years a gaggle of new firms offering ASP technology has ventured out onto the shifting sands of the medical transcription industry.

● Some have made the kind of flashy debut (with lots of display advertising, aggressive sales teams, exaggerated claims of 100% compliance with yet-to-be published HIPAA regulations, and an idiotic website) that has branded them as being run by greedy entrepreneurs who don’t know have a clue about medical transcription.

Some have built their business plans on the concept of using cheap offshore labor as a way to cut transcription costs.

Some have been very well-conceived businesses that understood the needs of the medical transcription industry and have gotten off to a good start.

The motivation behind these businesses has been pure and simple: To make money.

In April, when the Medical Transcription Industry Alliance held its annual conference in Seattle, a curious sequence of events started to raise serious questions about how safe it is to rely on an ASP as a business partner. Industry concern mounted as soon as Medquist acquired Speech Machines, one of the largest and most popular ASP vendors.

“A number of small services looked at the situation developing in the marketplace and thought the same thing: Medquist will buy Speech Machines, Medremote or some other ASP,” notes a long-time industry insider. “So it was no big secret. The big company in the industry needed an Internet strategy for Wall Street. With one acquisition they got a couple of needs filled.”

There’s just one hitch. If a company was already a client of Speech Machines, the chances are pretty good that Medquist gained access to all of its client information that had been resting on the Speech Machines servers. Unless, of course, it was one of the few companies that had had sufficient foresight to negotiate a license to run the Speech Machines software on its own servers.

I asked Dave Woodrow, President/COO of C@pitalMT what gave his management team the intellectual acuity and long-range vision to seek a separate license when entering into a business relationship with Speech Machines. “We began last fall to see how a deal could be structured that would allow us to be totally independent of their infrastructure. We had some money and were therefore able to essentially step up to the plate and make a capital equipment purchase which protected our future,” he explained.

One of the sessions at the MTIA conference stressed that whoever pays the ASP determines who has final control of the situation. But what if an ASP is the servant of two or more masters? What happens when the flow of funds raises serious questions about business ethics? Those MTSOs who originally signed on with Speech Machines hoping to grow their businesses may now find themselves in a Catch-22 predicament:

● With Speech Machines having been acquired by Medquist, in order for them to continue to use the ASP technology they contracted for with Speech Machines, they must write checks which end up lining the corporate pockets of their biggest competitor.

And yet, if they sever their relationship with Speech Machines, their biggest competitor has access to all of the contact information which would immediately allow Medquist to contact the MTSO’s clients and transcriptionists.

In the old economy, this phenomenon was called “protection money.” In other words, some MTSOs have the choice of paying Medquist money (through Speech Machines) which will allow them to stay on the Speech Machines platform while hoping that Medquist doesn’t meddle with their customers. Or, if they so choose, these MTSOs can risk angering the industry’s 900-pound gorilla.

Hollywood has paid homage to such business relationships in movies like Analyze This, Mickey Blue Eyes, and My Blue Heaven. Earlier this year, the California Medical Association was joined by the Texas and Georgia state medical associations in an amended complaint against the nation’s largest for-profit health plans. The CMA’s amended complaint alleges that there have been violations of federal Racketeer Influenced and Corrupt Organizations Act (RICO) laws to defraud physicians, enrich themselves at physicians’ and patients’ expense, break contracts with physicians and otherwise jeopardize patient welfare. “While charging the[health] plans with racketeering is clearly a drastic measure, we feel it is unavoidable because so many of our attempts to end these abuses have been largely futile,” stated Dr. Frank Staggers, President of the California Medical Association.

It will be interesting to see how folks within the medical transcription industry view the outcome of Medquist’s acquisition of Speech Machines. This much I’ll tell you: If I were the illegitimate love child of Martha Stewart and Tony Soprano, I would probably shrug my shoulders and tell a nervous MTSO that “As far as I can see, it’s a good thing. So just fuggedaboutit! Okay?”

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