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 . 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virtual reality, are physicians – who perform some of the most important functions in our society – still using such outdated technology?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) . They found initial support and funding from Y Combinator, an incubator program run by seasoned tech investor Paul Graham , as well as a handful of angel investors . 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 , 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.” 
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 . 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 . 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 . 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?
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- 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].
- Medigram 2012 Y Combinator Demo Day pitch
- 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].
- 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].
- 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].
- Medigram. 2015. About. [ONLINE] Available at: https://www.medigram.com/#about. [Accessed 17 November 2016].
- 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].
- 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].