Craig Patnode started a winner in 2004 with then-fledgling Sterilmed, a cleaner and refurbisher of medical devices. He hired veteran executive Brian Sullivan to succeed him as CEO in 2007 and drive the company forward.
Sterilmed rocketed from about $20 million to $100 million in revenue and several hundred employees by 2010. It was acquired by two private equity firms for about $175 million. And it was later sold to Johnson & Johnson for $350 million. It is still based in Maple Grove.
At about the same time he started Sterilmed, Patnode, 45, also acquired for not much a fledgling software program developed by the Wilder Foundation and the General Mills Foundation. It has since been refined, reformulated and evolved into a small business called Eldermark.
Minnetonka-based Eldermark employs 50 and expects revenue of $10 million this year. It automates and streamlines "senior housing" operations as well as connects with the electronic medical records of the residents through their health providers. The business has grown significantly amid federal health care requirements for integrated electronic records and the swelling ranks of senior citizens. Also, insurers, including Medicare, increasingly are moving to pay less on a fee-for-service model and more of an outcomes-based model. That requires an integrated housing-to-health care software or "personal health record."
"Our software focuses on senior housing; independent living to assisted living and memory care," Patnode said. "The other side of the fence is nursing homes, and that's declining. The government [through Medicare and Medicaid] wants to move increasingly to less-expensive senior housing … and as you age, you add services and the rates move up incrementally.
"We're a full software suite. One database. And the [housing] operators need a software partner … from marketing to risk management, general ledger, nurse care … core operations. And the electronic records need to be integrated and in sequence with hospitals, clinics and physicians for transitional care of residents. Still a lot of paper records [in senior housing]. We're developing the electronics that follows the patient."
The federal Affordable Care Act accelerated electronic records, and provided hospitals and clinics with financial incentives. The senior care operators follow the lead of health care providers.
Patnode said he has invested more than $5 million of his Sterilmed earnings into the Eldermark software platform. He hopes to get to a leading position over the next few years in a still-fragmented industry where he intends to grow organically and possibly through acquisitions.
