Medigram and the slow death of hospital pagers

If there is one thing that a law-abiding doctor and a narcotics-peddling drug dealer have in common, it’s pagers. Despite the ubiquity of smartphones today, a survey published in February 2016 showed that of 204 US hospitals sampled, 90% reported pager utilization at their facilities [1]. Why, in the age of driverless cars and virtual reality, are physicians – who perform some of the most important functions in our society – still using such outdated technology?

Why Hospitals Live in the Stone Ages

In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA), which required that healthcare providers protect the security of patient health information (PHI) through physical, network, and process security measures, including the encryption of any digital communications involving PHI. Because most forms of Short Messaging Service (SMS) are communicated over networks without end-to-end encryption, hospitals maintained HIPAA compliance by requiring staff to communicate via pagers. This, however, contributed to longer lead times before a required action for a patient was taken, as pagers did not allow senders to provide sufficient context to the recipients, nor did they allow for two-way communication by which recipients could follow up.

There’s an App for That

In 2011, a Stanford medical student decided that he had had enough of pagers and the inefficiencies that inevitably accompanied them while completing his in-hospital rotations. He recruited two other software engineers and together they founded Medigram to provide a secure messaging mobile app specifically for healthcare providers. They saw a 4-billion-dollar-a-year opportunity in the in-hospital messaging market alone and the chance to help save lives – quite literally. They also had a vision to expand their service to eventually cover the exchange of images (X-rays, CT scans, MRIs), lab reports, medical records, and remote monitoring (EKGs) [2]. They found initial support and funding from Y Combinator, an incubator program run by seasoned tech investor Paul Graham [3], as well as a handful of angel investors [4]. The team produced an app for both Android and iOS devices that allowed for secure texting. By 2013, Medigram had made substantial progress on several fronts. The product’s features had expanded to include urgent message alerts (i.e., when a doctor received an urgent message, the app would produce a sound that resembled a fire alarm), image transfers, integration with cloud storage provider Box [5], among others. The startup also had pilots under way at several well-regarded hospitals. The CTO of UCSF said of Medigram, “We are looking for this type of communication software to be part of our core technology.” [2]

Why Hospitals Still Live in the Stone Ages

At the same time, challenges abounded in an industry that, by its nature, resisted rapid innovation. The sales cycles that Medigram encountered were much longer than the ones that their fellow Y Combinator startups – most of which grew at the pace of consumer tech adoption (or failed) – experienced. Hospitals, which mostly operated as nonprofits on razor-thin margins, were loathe to invest in nascent technology. Even when Medigram’s pricing made economic sense when compared to the costs of maintaining pagers, buy-in was difficult to obtain from gatekeepers within the IT departments whose jobs consisted of managing the pager system. Further, HIPAA compliance requirements made software development costly as each update of the app required a contracted third party to conduct penetration testing, which validated the security of the code before it could go live. Infrastructural challenges within the hospitals also proved problematic: many hospital facilities simply did not have reliable wifi or telecom service connectivity throughout their buildings.

Slow and Steady Wins the Race… In Healthcare

Today, Medigram remains a small, privately held company operating out of Los Altos, California [6]. Recently, it was lauded as one of the “50 healthcare apps for clinicians and consumers to know” by a Becker’s Review, a leading industry publication for healthcare providers [7]. Meanwhile, a host of competitors have cropped up, including companies like TigerText, Vocera, and athenahealth, validating Medigram’s original business idea. Pager use has been declining by 11% per year, indicating a slow shift toward other technologies [8]. Medigram’s journey provides just a peek into the pace of digitization within one small component of healthcare. Outside of in-hospital communications, opportunities abound for digital solutions to improve upon inefficiencies within the systems. The proliferation of disease classifications (ICD codes) and the fragmentation of the electronic health record systems industry are just a few of many problems that present challenges to digital advancement. The most successful digital health companies are hardly the high-flying unicorns that occupy TechCrunch; they look more like Epic Systems, which has taken over 30 years to become the standard-bearer for electronic medical record systems. What are your thoughts about how digital innovation can survive the systemic inertia in healthcare to provide impactful changes?

Word Count: 794

Sources:

  1. TigerText. 2016. The Hidden Cost of Pagers in Healthcare. [ONLINE] Available at: http://www.tigertext.com/wp-content/uploads/Report-Hidden-Cost-of-Pagers.pdf#_ga=1.70962452.508313226.1479429141. [Accessed 17 November 2016].
  2. Medigram 2012 Y Combinator Demo Day pitch
  3. TechCrunch. 2016. YC Demo Day Session 1: PlanGrid, Medigram, Zillabyte, HireArt, Flutter, Givespark, Popset, SendHub, Screenleap, Coderwall, LVL6. [ONLINE] Available at: https://techcrunch.com/2012/03/27/yc-demo-day-session-1/. [Accessed 17 November 2016].
  4. MarketWatch. 2014. 3 Rules to Make You a Smart Investor in Startups. [ONLINE] Available at: http://www.marketwatch.com/story/3-rules-to-make-you-a-smart-investor-in-startups-2014-02-25. [Accessed 17 November 2016].
  5. IT World. 2013. Box Sets Its Sights on Healthcare Customers. [ONLINE] Available at: http://www.itworld.com/article/2709539/storage/box-sets-its-sights-on-healthcare-customers.html. [Accessed 17 November 2016].
  6. Medigram. 2015. About. [ONLINE] Available at: https://www.medigram.com/#about. [Accessed 17 November 2016].
  7. Becker’s Health IT & CIO Review. 2016. 50 healthcare apps for clinicians and consumers to know. [ONLINE] Available at: http://www.beckershospitalreview.com/healthcare-information-technology/50-healthcare-apps-for-clinicians-and-consumers-to-know.html. [Accessed 17 November 2016].
  8. The Globe and Mail. 2015. Telus drops paging service as demand declines. [ONLINE] Available at: http://www.theglobeandmail.com/report-on-business/telus-dropspaging-service-as-demand-declines/article22753554/. [Accessed 17 November 2016].

Photo source: Medigram, (2014), Homepage [ONLINE]. Available at: http://www.medigram.com [Accessed 18 November 2016].

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4 thoughts on “Medigram and the slow death of hospital pagers

  1. Great post, Anonymous! I have always been shocked by the lack of advanced technologies used by medical professionals as a result of HIPAA. In addition to pagers, my sister who worked at Dana Farber always had to use a fax machine to pass orders and other patient information instead of using email. As you rightly point out, there seems to be such reluctance to move online and make use of technologies that would actually improve communication among stakeholders in the medical community. It’s a shame that apps like Medigram are not catching on faster, but I can understand why hospitals don’t want to invest. Though my knowledge of the healthcare system is basic at best, it seems like the technologies and initiatives that have the best chance of adoption are those that mutually benefit both payers and providers and cut costs out of the system. If Medigram or a similar company could convince insurers that claims would go down as a result of better, real-time communication in hospitals, they might be willing to help convince hospitals to adopt or offer more favorable reimbursement rates or something to encourage hospitals to make the investment.

  2. I am surprised that hospitals need a budget to adopt an app. I would imagine most doctors and nurses have their own smartphones and can download apps? In which case, the app producer needs to get regulatory approval and then have hospitals be open to using it.
    This of course assumes that hospitals do not need to invest in their IT systems in order to integrate with the app.
    But in any case, I am sure app producers can provide a simpler version of their software that medical staff can use without extensive IT integration. Even WhatsApp offer encoded texts which security agencies cannot hack.
    However, if the solution were so simple, then why are 90% of facilities still using pagers? I am sure I am missing something here, and would appreciate your thoughts.

  3. Great post Ann! In response to your question, I think that due the stringent requirement of security around patient information enforced by HIPAA movement in this space will necessarily always move slowly, and for good reason. It seems like a major impediment to wider adoption of Medigram is obstinance on the part of the Hospital IT. One cause of this, I would assume, is the cloud based nature of the product. With most EHRs, such as EPIC, the software isn’t cloud based and IT department still maintains control over a local implementation. However with Medigram, it would seem that everything would be managed remotely by Medigram. This paradigm shift is probably difficult for many IT departments to feel comfortable making. Even trusted systems such as Epic are having a hard time getting customers onto their cloud based offerings. As more and more record move online, and people are more comfortable with the idea perhaps Medigram will experience greater adoption. This might be a case of right place wrong time for Medigram.

  4. Loved the “If there is one thing that a law-abiding doctor and a narcotics-peddling drug dealer have in common, it’s pagers”. Really brings things in perspective! I find it fascinating that there are some developing countries who adopt technology faster than hospitals in US. Medigram seems like a long-term sustainable investment and should receive more regard from hospitals (and faster implementation). With entire industries moving to online platforms, it is astonishing to me that hospitals cannot move to operating smartphones (insured for security breaches) as opposed to pagers. Hospitals should invest in cybersecurity and adopt this disruptive technology! It is tough to fight against archaic systems, but I am confident that in a span of less than 10 yrs, given the current tech progress and the tech dependence of Milenials this technology will be on the rising side of the adoption curve!

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