business

In 2000, John Fraser co-founded VisionShare Inc., a Minneapolis company with a tantalizing, albeit challenging, focus: a software system that linked health care organizations so they could share medical data over the Internet with a high degree of security.

Nine years later, after leaving VisionShare to start a second company, Fraser might have that original goal in his sights at last.

A disinterested marketplace forced VisionShare in 2002 to refocus the business on a service that connects hospitals and clinics via the Internet to Medicare for billing, payment and eligibility verification. It was a smart move that hoisted revenues from about $500,000 in 2002 to more than $6 million last year, said Fraser, the son of former U.S. Rep. and Mayor Don Fraser of Minneapolis.

But it did not make him very happy: "I agreed with the decision, but I was disappointed that we had to defer the larger vision of connecting the medical community online," he said.

Which is why he left VisionShare in 2006 to pursue the dream once again. It appears that the market, with a nudge from the federal government, might be a bit more receptive this time.

Fraser, 55, is founder and CEO of Mednetworld.com, a Minneapolis company that has made the first sale of its software and services to a Duluth association of health care organizations for use by 18 northeastern Minnesota hospitals that will begin sharing medical data in August.

The hospitals, part of the Community Health Information Collaborative (CHIC) in Duluth, will then link up to the emerging Nationwide Health Information Network later this year through the Center for Disease Control in Atlanta.

Improved-quality goal

The goal is improved quality of care, said CHIC Executive Director Cheryl Stephens, whose consortium was formed in 1999 to promote online data sharing among health care organizations: "Imagine being in an emergency room, where time is critical," she said. "You won't have to remember every prescription or when and where you had your last tetanus shot."

As a result, "doctors will have a more complete picture of your health, which will improve the quality of care," Stephens said. Not to mention that it will save money compared with the paper- or fax-based data-sharing system now in effect, Fraser added.

Despite the progress toward a national network, however, the financial impact on Mednet has been minimal so far. The sale to the CHIC hospitals generated just $180,000 last year, and a pilot project at three northeastern Minnesota hospitals produced $100,000 in 2007.

But the potential is substantial, Fraser said. CHIC's membership includes about 200 hospitals and clinics in northern Minnesota, all of them potential clients for Mednet's Health Information Exchange Service.

And organizations similar to CHIC are forming across the country, thanks in part to $30 billion of federal stimulus funds available to "wire up" medical facilities, Fraser said.

In fact, Mednet is running a demonstration project with such a group in Ohio, and is talking with medical organizations in five other states about using the company's software. Moreover, he expects that long-term care facilities also will be added soon.

The state-by-state, region-by-region approach "might seem like a patchwork arrangement now," Fraser said. "But the vision is groups of health care organizations much like CHIC creating gateways through which the data will flow."

The Mednet software system is built around military-grade encryption technology used by the federal government to assure security. Fraser sees this as more compatible with the national system that's developing than the proprietary software being developed by several of his competitors.

Mednet's first service offering to the 18 Minnesota hospitals will be a patient lookup service, with a focus on data required by emergency rooms and supplied by hospitals and clinics affiliated with them. The cost: $500 to $3,000 a month, depending on the size of the health care organization, with the price to rise as services are added.

Meanwhile, Mednet is discussing a licensing agreement with the University of Minnesota for a research service to pinpoint and recruit qualified patients for medical research. A system to provide data for insurance preauthorization also is in the works.

The real push for a national system came in 2006, when three hospitals in Minnesota and several more in five other states participated in a demonstration project sponsored by the General Services Administration and the Healthcare Information Management Systems Society, an association of national health care organizations.

That led early this year to the first step in the national network, a project that linked several hospitals and clinics in Virginia with the Social Security Administration to share medical data needed to qualify patients for disability benefits.

And Fraser is rejoicing: "It took a long time," he said. "But the vision we saw back in 2000 appears to be happening."

Dick Youngblood • 612-673-4439 • yblood@startribune.com