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Big Data, Big Hospital Venture

Proven health care entrepreneur G.T. LaBorde is busy selling his next big venture. Private equity investors are betting millions that hospitals buy into his new Big Data tool.

The partnership of Birmingham physician Makul Mehra and entrepreneur G.T. LaBorde was born at their children’s grade school.

The partnership of Birmingham physician Makul Mehra and entrepreneur G.T. LaBorde was born at their children’s grade school.

Makul Mehra, M.D., a Birmingham gastroenterologist, says he first met entrepreneur G.T. LaBorde while attending parent orientation at their children’s grade school. The two dads struck up a conversation and later got together for beers to talk about business, technology and Mehra’s big idea. 

Mehra had an idea to invent a way for healthcare providers to efficiently access massive amounts of patient data to help them make better treatment decisions. Such a tool could be useful because the Affordable Care Act requires a value-based payment system over the traditional fee-for-service model to keep costs low and to improve outcomes and quality of care. 

Mehra recalled meeting a new patient, a 39-year-old nurse with Crohn’s disease, who had previously sought help from several other physicians. In researching her medical records, he discovered that she had undergone 18 CAT scans in three years. Each physician, Mehra believed, had been unaware of the number of CAT scans the patient’s previous physicians had ordered. 

“I went into her records and did the mathematical computations and analysis and read articles about atomic bomb survivors,” he says. “This poor nurse had had the radiation equivalent of living a mile from ground zero of the atomic bomb in Hiroshima two-and-a-half times.” 

It took almost eight hours to do the research, says Mehra, and he knew that few physicians had the time to do that kind of backgrounding on every patient. The problem was that electronic medical records (EMRs) for patients do not “talk” to each other.

The partnership of Birmingham physician Makul Mehra and entrepreneur G.T. LaBorde was born at their children’s grade school.

 

“That’s why it came to me what we need to be doing in healthcare,” Mehra says. “We need to focus on patient care, but also give physicians data at the point of care that doesn’t exist in EMRs.”  

Mehra knew LaBorde understood business and the potential of what is known as “Big Data,” the use of large data sets to spot and analyze trends and patterns. Back in 2000, LaBorde, along with Stephen Brossette and Patrick Hymel, co-founded MedMined Inc. MedMined was a startup company in Birmingham that mined large databases to identify outbreaks of hospital-acquired infections nationwide, as well as opportunities to manage and prevent future occurrences. Hospitals around the country bought the software, and, in 2006, Cardinal Health Inc., a global Fortune 500 company, announced plans to acquire MedMined for more than $100 million.

Mehra continued mapping out ideas for some kind of ribbon of information that could accompany a patient’s EMR. Then, he pitched his ideas to LaBorde.

“I told him all of the reasons why it would never work,” says LaBorde, “but he was very persistent.” 

Undaunted, Mehra says that again and again he did more research and met with LaBorde to discuss his idea. Finally, after more than a year, Mehra came up with a product idea that LaBorde thought was both workable and worth the risk. 

Creating the product involved collecting massive amounts of data and working various algorithms. In 2014, IllumiCare was born. 

The IllumiCare Smart Ribbon is an application in which an electronic band floats across the top of a patient’s EMR. The ribbon is separate from the EMR, and healthcare providers can view it using the same login they use to access the EMRs. The ribbon contains real-time data on not only the costs of medications, but also lab tests ordered, radiation exposure and the associated risks of treatments, such as adverse drug reactions. The financial and clinical data comes from the hospital’s internal records and third-party sources. 

If the health care provider chooses not to interact with the ribbon, it disappears after a few seconds so it is not intrusive to the EMR. The goal is to give health care providers more information about treatment costs and risks at the point of care. 

“If we want them to provide value-based care,” says LaBorde, CEO of IllumiCare, “we have to empower them to know the real prices that are actually being paid by the hospitals they practice in, so they can make better judgments.” 

A patent on the ribbon is pending, Mehra says.

Establishing a startup is a gamble, but LaBorde says he is used to risk. He began his professional career as an attorney. He left it behind after a couple of years, however, to become the director of sales for a New Orleans company that organized corporate incentive travel packages to major sporting events like the Super Bowl.

“I’ve always been passionate about business,” he says, “and a legal background was a wonderful preparation for understanding the rules of business and commerce. At the sports travel place, I was the director of sales, and I learned how to sell. My clients included some of the largest corporations in the world in putting together incentive trips for their employees and customers. It was good preparation for ultimately starting a business.”

Selling was a skill that proved useful once LaBorde and Mehra began the task of seeking investors. In 2015, the company won a $100,000 grant in the Alabama Launchpad Startups Competition sponsored by the Economic Development Partnership of Alabama. Then this past spring, IllumiCare capped off its first round of funding with more than $2 million from Jemison Investment Co., Stonehenge Growth Capital LLC and Timberline Investments. 

Braxton Goodrich, a director at Timberline, notes that a startup’s leadership is one of the key factors investors consider when deciding whether to invest.

“They need to have a strong management team in place,” Goodrich says. “Someone, preferably, who has done it before and someone who has a clear vision and is very dedicated to the cause because startups require a tremendous amount of effort and you need to have someone who is very passionate about what they’re doing.”

Stonehenge Growth Capital LLC, a national, later-stage investor, manages private equity, venture capital and mezzanine investments. Its Alabama portfolio includes a range of companies, from healthcare and information technology to manufacturing and wholesale distribution, says Steve Davis, who directs Stonehenge’s Alabama operations. 

Even when a startup has a slam dunk management team and an interesting product or service, says Davis, it’s still a risky investment. A big challenge for IllumiCare, he says, will be getting more hospital systems on board to try the product.

“You have to be willing to invest the money you’re willing to lose,” says Davis. “The risk is that we have to put more money in or it just doesn’t work. We think the solution and the [IllumiCare] team will work, but selling to hospital systems is a long sale cycle, and it’s not an easy sell.” 

But in January of this year, IllumiCare revealed that St. Vincent’s Health System would begin implementing the product at four of its hospitals. The same month, the Texas Hospital Association announced that it would introduce the THA Smart Ribbon powered by IllumiCare. Then in July, the Economic Development Partnership of Alabama named IllumiCare its “Corporate Innovator of the Year” for 2016.

Still, IllumiCare is a gamble. But LaBorde says that despite the inherent uncertainties of the enterprise, the professional challenge of putting together a team with the ability to solve problems, the struggle to overcome the odds of building something new and the process of getting people to adopt a product is what he enjoys most about operating a startup. 

“The amount of fun involved in that,” says LaBorde, “to me is super exciting.”

Gail Allyn Short and Cary Norton are freelance contributors to Business Alabama. They are both based in Birmingham.

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