Bridge Medical: Oops-less Medicine

The subject of medical mistakes has drawn increased attention over the last five years, culminating in the November 1999 Institute of Medicine's report, which made front page news and triggered responses from President Clinton and Congress, as well as the medical establishment and the health care industry. Of particular interest to pharmaceutical and medical products companies is the problem of medication errors, which appear to be increasing for a variety of reasons, ranging from the complexities posed by ever-increasing numbers of drugs and delivery regimens, to more basic factors such as indecipherable physician handwriting and the increased pressure resulting from medical staffing reductions. Whatever the cause, one thing is clear: medication errors are a systemic problem not given to any one quick fix. With the potential for errors occurring at every stage of the medication delivery chain--prescribing, processing, dispensing, and administering drugs--there's plenty of room for companies with potential solutions. Yet, existing information and automated drug distribution systems only incidentally address the problem of medication errors. Bridge Medical, a start-up focused exclusively on developing systems to prevent medication errors, is looking to correct mistakes no matter where they originate by concentrating on the final step in the drug delivery process: the patient's bedside. Bridge recently parted ways with its founder, choosing to move in a different direction that will bring it into more direct competition with large health care information technology players. The company is betting that having a technological headstart and being the only pure-play medication-error company will enable it to successfully navigate what is rapidly becoming a crowded and heavily scrutinized market.

The current national debate over medical mistakes has set the stage. Bridge Medical's trying to take advantage with its system for preventing medication errors.

by Stephen Levin

• The subject of medical mistakes has drawn increased attention over the last five years, culminating in the November 1999 Institute of Medicine's (IOM's) report, which made front page news and triggered responses from President Clinton and Congress, as well as the medical establishment and the health care industry.

• Of particular interest to pharmaceutical and medical products companies is the problem of medication errors, which appear to be increasing for a variety of reasons, ranging from the complexities posed by ever-increasing numbers of drugs and delivery regimens, to more basic factors such as indecipherable physician handwriting and the increased pressure resulting from medical staffing reductions. Whatever the cause, one thing is clear: medication errors are a systemic problem not given to any one quick fix.

• With the potential for errors occurring at every stage of the medication delivery chain—prescribing, processing, dispensing, and administering drugs—there's plenty of room for companies with potential solutions. Yet, existing information and automated drug distribution systems only incidentally address the problem of medication errors.

• Bridge Medical, a start-up focused exclusively on developing systems to prevent medication errors, is looking to correct mistakes no matter where they originate by concentrating on the final step in the drug delivery process: the patient's bedside.

• Bridge recently parted ways with its founder, choosing to move in a different direction that will bring it into more direct competition with large health care information technology players. The company is betting that having a technological headstart and being the only pure-play medication-error company will enable it to successfully navigate what is rapidly becoming a crowded and heavily scrutinized market.

When device entrepreneur Jim Sweeney launched Bridge Medical Inc. in April 1996, the subject of medical mistakes generally and medication errors, in particular, was just beginning to receive national attention largely arising from the death of Betsy Lehman, health care reporter for The Boston Globe. In 1995, Lehman was given an overdose of a chemotherapy drug at Boston's Dana-Farber Cancer Institute . Sweeney's own awareness of and commitment to the medical mistake problem—to the point of starting his own company to develop a solution—derived in part from personal experience. Hospitalized and facing serious surgery, Sweeney says he avoided being given the wrong medication only by virtue of the fact that a visiting family member interceded to prevent a nurse from administering the incorrect drug.

Yet even Sweeney was taken aback when, upon inviting former Surgeon General C. Everett Koop, MD, to be Bridge's keynote speaker at a dinner held during a national pharmacy meeting, Koop told Sweeney that the former Surgeon General, his wife, and their eldest son had all nearly been victims of medication errors during recent hospitalizations. Sweeney says Koop told him, "Jim, I wouldn't go into a hospital again unless I had someone with me 24 hours a day to protect me [against medication errors]."

The problems of medical mistakes and medication errors defy simple solutions because they arise as much from problematic philosophies and cultures as they do from poor logistics and simple human error. Experts point to the attitude inculcated in physicians during medical school that doctors are infallible as a major obstacle to addressing medical mistakes, given the inevitability of human error. Further, they contend that a culture which first looks to point fingers and place blame, rather than seeking to solve problems, greatly inhibits efforts to undertake open discussions of where mistakes occur and how they can be corrected.

Medication-error experts argue that the incidence of problems is much greater than commonly believed, in part—and fortunately so—because the vast majority of errors go undetected since they do not result in a patient suffering an adverse drug event (ADE). But even this silver lining has a dark cloud: the relatively low reporting of errors makes it much more difficult to identify the sources of errors because of the numerous links in the medication delivery chain, which includes prescribing, processing, dispensing, and administering drugs. For example, one hospital that is an early user of the Bridge Medical system found it had as many as 65 steps in the process by which drugs are administered. The problems occurring at different stages that might result in an error vary significantly—an illegible prescription resulting in the wrong medication, as opposed to the wrong drug being provided because it is packaged similarly to another product. The result is a problem that doesn't lend itself to a single comprehensive solution.

Bridge Medical's approach has, from its inception, focused on catching medication mistakes as late in the process as possible in order to prevent the maximum number of errors. For Bridge, this means designing a system to operate at the patient's bedside where most drugs are administered. While the implementation site has remained constant, Bridge recently readjusted its strategy from Sweeney's original approach: where Sweeney had designed a device specifically to prevent intravenous (IV) drug errors, the Sentry, while still screening for other types of medication mistakes, Bridge's system is software-focused and does not include the IV device. In shifting its strategy, Bridge is bringing itself into more direct competition with large health care information technology providers that are increasingly looking to add medication mistake-prevention elements to their traditional, legacy information systems, companies such as McKesson HBOC Inc. , Pyxis Corp. (a division of Cardinal Health Inc. ), Cerner Corp. , Shared Medical Systems Corp., and Eclipsys Corp. In so doing, Bridge is betting that having a technological headstart and being the only pure-play medication error company will enable it to successfully navigate what is rapidly becoming a crowded and heavily scrutinized market.

The Error Prevention Business

Jim Sweeney's realization that medication errors are a serious problem arose from more than just his own personal hospitalization experience. Sweeney has spent his entire career in health care, starting at age 15 in the purchasing department of Sharp Hospital in San Diego, followed by three years in the US Army's Medical Corps. Prior to launching his entrepreneurial career, Sweeney was a marketing executive with Baxter International Inc. and American Hospital Supply Corp., a consultant with Arthur Young & Co., and president of the medical division of Kay Laboratories Inc. Sweeney freely admits that his entrepreneurial spirit, at least in part, derives from his frustration with the slow pace of change in large companies.

Sweeney first recognized an opportunity to launch a start-up when, in 1979 as marketing director with IV-solutions maker McGaw Inc. , (now owned by B. Braun Melsungen AG ) he realized that patients were being kept in hospitals longer than necessary simply because they needed some type of intravenous therapy. Sweeney's idea was to enable these patients to receive the necessary IV treatments at home, which would please the patients while also reducing costs for insurers and employers.

Sweeney first brought the idea to McGaw, which wasn't interested. In fact, Sweeney admits that his candor and direct approach didn't sit well with senior executives at McGaw, and he was fired. But the move proved a good one for Sweeney; in 1979 at age 36, he launched Home Health Care of America (later Caremark), which pioneered home infusion therapy at a time when most companies believed patients would not be able to master feeding themselves at home through an IV tube (or similar therapies), and most payers wouldn't reimburse such treatment.

After struggling initially and failing to convince insurance companies of the virtues of home therapy, Sweeney achieved a breakthrough by going directly to employers to show them the savings they could achieve. His first big customer was Ford Motor Co. Home Health Care of America achieved revenues of $1 million in the company's first year and grew to $250 million by 1987, when it was acquired by Baxter in a transaction valued at approximately $580 million.

Sweeney's next venture wasn't successful. In 1987, he launched CarePartners Inc., a service provider that offered what Sweeney calls "community-wide nursing stations" that patients and caregivers could contact directly from their homes. CarePartners was aimed primarily at geriatric patients and the families of premature infants. Both were groups that Sweeney thought would benefit from being at home while having this type of nursing service. Sweeney contends CarePartners was unsuccessful because hospitals were reluctant to discharge these patients to be treated at home. In 1990, he sold the company and saw his entrepreneurial career come full circle.

Sweeney headed an investment group that engineered a leveraged buyout of the company that essentially started him on the road to company creation, McGaw. Sweeney's group acquired McGaw from Kendall International Inc. for $200 million in October 1990. In three years, McGaw's revenues increased by 50% and earnings tripled. In January 1994, McGaw merged with Ivax Corp. and, at an acquisition price of $16 per share, McGaw's original investor group realized a 640% profit in three years, says Sweeney[See Deal].

Later in 1994, Sweeney rolled up four home IV therapy companies to create Coram Healthcare Corp. Coram followed that with additional acquisitions consistent with Sweeney's strategy of acquiring companies that were not market leaders and putting them together to form what, he says, became the leading US provider of home IV therapy. Sweeney remained with Coram until he launched Bridge Medical.

What attracted Sweeney to build a company aimed at preventing medication errors was, he explains, the same thing that drew him to start his other companies: "big ideas looking to solve problems that had not been pursued." "My particular skill set is being able to identify new ways of doing things, raising capital, and implementing those new ideas," he says.

From his work with hospitals over the years, Sweeney knew the problem of medication errors was widely recognized within the medical community, though not often publicly acknowledged. "When medication errors occur," he says, "they're whispered about throughout the organization but they're not the kind of thing about which anyone talked openly." Typically, he says, within a few days, the nurse involved in the incident is fired and that would be the end of it. Such a response to the problem constitutes what Sweeney calls, "a punitive approach to managing, as opposed to addressing weaknesses in a systemic process to solve the problem."

Where To Begin?

Perhaps the toughest problem in devising a solution to preventing medication errors is that there are so many points throughout the current labyrinthine drug delivery system where mistakes can occur. "When I began to think about a solution to this problem," Sweeney explains, "I realized that the reason it hadn't been addressed successfully was that it was multi-layered and involved so many people and systems in the hospital, so that to really tackle the problem you had to tackle all of the problem and not just a piece of it."

Peeling back the layers of the medication error issue, Sweeney found that "the single biggest cause of death is related to patients getting the wrong IV solution or an IV solution that wasn't mixed properly." With his background in IV therapies, Sweeney set out to make accurate IV therapy the cornerstone of Bridge Medical's approach to preventing medication errors. "I believed that if I could develop a solution to the IV part of the problem, it would be relatively easy to wrap the other medication problems around that," he notes. For example, Sweeney saw the benefits of developing a bar coding system in a hospital for administering oral drugs "to make sure the right drug gets matched up to the right patient." But, he goes on, "people don't typically die from getting the wrong oral drug, they die from getting the wrong IV." Thus, Sweeney's original strategy for Bridge Medical was to develop an omnibus system to cover any medication error but would be keyed to a device designed to prevent IV mistakes.

Sweeney's idea for the technology behind such a device would control both the delivery of IV solutions to the patient's bedside and then infuse them directly into the patient using an IV pump built into the system. Sweeney had previously acquired the rights to that technology when he owned McGaw and had spent $8-10 million dollars developing it. But the technology rights went to Ivax when it acquired McGaw. In 1996, while trying to get Bridge off the ground, Sweeney was also involved in litigation with Ivax over money Sweeney claims he was owed. Sweeney was able to negotiate an agreement with Ivax under which Bridge received the rights to the IV technology system in exchange for Sweeney dropping his lawsuit.

Back in 1996, Sweeney had no trouble getting capital for his new company from traditional venture sources. He raised a total of $41 million in three private financing rounds, with New Enterprise Associates as the lead venture firm, along with Coral Ventures, Sierra Ventures, and Nassau Capital [See Deal]. Sweeney, who is encountering quite a different reaction now as he tries to raise money for a new venture, notes that the pre-money valuations for Bridge's three rounds were $15 million, $47 million, and $100 million, respectively, even though, as he notes, "It was just an idea at that point."

But developing a technological approach and raising capital were straightforward challenges compared with the sales and marketing hurdle Bridge was facing. Simply put: how does a company go about marketing a solution for a problem that both hospital administrators and clinicians have been traditionally loathe to publicly acknowledge?

Burying Mistakes

Sweeney describes the way most hospitals typically deal with medication errors as a form of "silent conspiracy" driven by a "Don't ask, don't tell" mindset. He contends that the issue of medication mistakes is "well known among the medical community," which he defines narrowly to include only doctors and nurses, "but is not well known by hospital administrators." This is because the medical community's approach to managing these problems is to contain them within the clinical staff without raising awareness among hospital administration. Hence, as noted, Sweeney contends the typical approach is to fire the nurse involved and leave it at that.

This damage-control approach by the medical community concerning medication errors created a significant marketing challenge for Bridge particularly in the company's first three years, prior to the widespread publicity this issue gained with the release of the Institute of Medicine's report in November 1999. (See sidebar.) According to Sweeney, the marketing challenge was surprisingly clear-cut: "If the hospital CEO was an MD, we would get a very different response than if the CEO was an administrator," since MDs tended to be much more receptive since they were more keenly aware of the actual scope of the problem.

In order to improve the receptivity of hospital administrators to Bridge's system, Sweeney brought in John Grotting, who had been an administrator with two of the nation's leading managed care organizations, Allina Health Systems where he was COO and Legacy where he was CEO. Sweeney's view was that Grotting's background made him well suited to effectively inform hospital administrators as to the actual costs and liability risks their institutions are incurring as a result of medication errors.

Since the 1980s, most medication-error experts, Sweeney included, have advocated an FAA (Federal Aviation Administration) model for understanding and preventing medication errors in the US health care system. Both health care and aviation involve large numbers of people and complex procedures in their respective goals of healing patients and safely flying and landing planes. Sweeney says that, according to one medication error expert, "If you took the current medication mistake error rate and applied it to aviation, we would be losing an airplane every day." The FAA model, Sweeney explains, is predicated upon approaching things from a systemic, rather than an isolated, point of view. This is particularly important in dealing with medication errors, he says, because "these mistakes are typically compound errors that are not the result of just one person."

And it was on this model that Sweeney based Bridge Medical's original IV technology-driven strategy, an approach that would succeed, he says, "so long as the hospital is committed to it." To understand Sweeney's conception of how his IV-based device, the Sentry, could prevent medication errors, one must first understand how intravenous drugs are currently prescribed, delivered, and administered. Once a physician either writes or verbally gives an order for an IV solution, that request is transmitted to the hospital pharmacy. There the drug is mixed by combining a vial of powdered medication with the correct diluent, placed in a container, labeled, and sent back through the system to the nurse to administer to the patient.

Using the Sentry, once the medication order is entered into the pharmacy system, the information is electronically transmitted to the IV device at the patient's bedside. The pharmacist simply sends the powdered vial of drug with a bar code attached to the nursing station. The nurse obtains the vial, scans the bar code on the drug, and places the vial on the IV device attached to the patient for delivery. No additional tubings or containers are necessary. The IV device has built-in instructions on how to safely administer the drug to the patient at the right time. The device will mix the powdered drug with the patient's primary IV solution, dilute to the appropriate volume, and administer the drug automatically to the patient via their IV at the time that the dose is due. The system's computer technology is also designed to use bar coding and software to verify, screen for errors, and document all of the patient's medications prior to administration, including oral, topical, and inhaler drugs.

Sweeney acknowledges the complexity of the device he envisioned but believes only such a comprehensive approach can effectively limit a problem of such broad scope. Following the FDA's approval of the IV-based device, Bridge set out in mid-1998 to raise the additional capital necessary to bring the product to market, which Sweeney estimated then to be $35 million. However, the financing environment for device companies had changed dramatically in the two years since Bridge's launch, driven largely by the disappointing performances of many of the device start-ups that took advantage of the open IPO window in 1996, only to fail to meet expectations.

The difficulty in obtaining the additional financing necessary to market the device led Sweeney and his investors to a crossroads. In Sweeney's view, the investors wanted to adopt a lower risk strategy that entailed jettisoning the more comprehensive, IV-based device technology in favor of developing a software-focused approach to preventing medication errors. Sweeney's concern was that a small company like Bridge, focused exclusively on medication mistakes wouldn't bring sufficient leverage to the software marketplace, dominated as it is by large health care information systems companies, to succeed. Bridge's board disagreed, and the result was that in January 1999, the board asked Sweeney to step down and replaced him with John Grotting.

Switching Gears

Grotting's experience as a senior executive with several leading provider organizations gave him with insight into the need to develop creative solutions to entrenched health care problems. "What I was doing frequently involved re-engineering the process of care in order to live with the new economics of medicine," he explains. Grotting found that "you couldn't just re-structure the way in which people did the work and get to where you needed to be. As an organization, you had to embrace new technologies."

Dealing with medication errors, Grotting acknowledges, requires not only a technology to prevent these mistakes, but also re-educating the medical community to change its mindset on this issue. He agrees with experts who contend that the current body of incident reports, which are the mechanism by which medication errors are processed, vastly under-report these events. While the medical literature suggests that the actual number of medication errors are anywhere from 20 to 50 times the number reported, Grotting says that Bridge Medical's initial data suggests the actual number of errors is even higher and believes the greatest culprit is our society's culture of blame. "Rather than acknowledging that, when a medication mistake occurs, we are dealing with a systems failure and treating that accordingly," he says, "we reprimand, punish, or fire the nurse who brings attention to the error."

Extensive reviews of the medication delivery process show that approximately 40% of the errors occur in the initial stage when the physician prescribes the drug, says Grotting. Another 40% take place in the final stage when the nurse administers the drug and the remaining 20% happen somewhere in between, during the preparation and dispensing of the drug, which often takes place in the hospital pharmacy. Grotting argues that most of the device innovation that has taken place—at among companies like McKesson HBOC (which has developed a robotic dispensing system) and Pyxis (with its automated dispensing cabinet system)—has focused on that middle stage of controlling and dispensing drugs which, while not insignificant, is the smallest aspect of the problem. Donna DuLong, Bridge Medical's VP of marketing, adds that while the technologies developed by companies like McKesson HBOC and Pyxis are successful, "what they're really after is not so much driving error out of the system but, rather, increasing efficiency."

Grotting acknowledges that the industry is going to have to develop better systems for every stage of the drug delivery process, from electronic order entry systems onward, but, he goes on, Bridge Medical's strategy was to determine at what point could a system prevent the greatest number of errors from reaching the patient, no matter where in the process these mistakes occurred. The answer: at the final stage, when the drugs were about to be administered at the patient's bedside. In addition to preventing medication errors, he says, Bridge has built into its system the capability of providing the hospital with data designed to help the institution track where the error occurred in order to help analyze a particular situation and improve clinical decision-making in the future.

A former nurse, Donna DuLong has first-hand experience with this issue; she also worked at both HBOC and Pyxis. She explains that the difficulty n building a system to prevent medication errors lies in the broad range of possible mistakes given the multiple steps in the medication dispensing process. On the ordering end, for example, people joke about the illegibility of doctors' handwriting, but the reality is hardly a laughing matter when indecipherable script results in serious problems. Other common errors made at this stage, says DuLong, are ordering an inappropriate drug for the condition being treated, ordering the wrong dose for that particular patient, and confusing drugs with similar names.

The next stage at which errors typically occur is when orders are transcribed. A decimal point put in the wrong place, for example, can result in large overdoses being given, says DuLong, and simply misunderstanding what is written, such as transcribing a "U," which stands for units, as "O" can also cause problems.

The third medication delivery stage, the drug dispensing stage, has, as noted, seen the greatest advances in new technologies. However, even here, DuLong notes, if an automated cabinet or robot is filled with the wrong medication, those systems are not primarily designed to catch such errors. In fact, the result can be multiple medication mistakes since those automated systems treat numerous patients. She adds that companies such as Pyxis and OmniCell Technologies Inc. are introducing additional features to their existing systems designed to address medication errors, such as the increased use of bar coding to verify that the proper medicine is given to the right patient. But by themselves, such precautions won't prevent all medication errors.

It is in the final stage of the process, when the nurse administers medication to the patient, that the most errors occur. DuLong explains that these mistakes can include delivering the wrong drug, providing medication to the wrong patient, and administering medicine in an incorrect form (e.g., oral, IV, topical, inhaled, etc.). At this stage, confusing similar drug names can also cause serious problems, she adds, as, for example, when Norcuron, which is a paralyzing agent, is administered instead of Narcan, which is used to reverse the effect on a patient of being given too much of an opiate such as morphine for pain control. Both of these drugs are often found on a hospital crash cart and it's not unusual, during a crisis, for a physician to verbally instruct a nurse to administer drugs, without any of the checks that may occur in the case of a written prescription. In the confusion of the moment, DuLong says, the wrong one of these similar sounding drugs has been administered and patients have died as a result.

The Five Rights <<t1 Bridge Medical has attempted to address as many of these problems as possible by developing a system that looks at the problem "from the patient on up," says DuLong. The company's technology is designed to reside at the bedside to provide maximum assistance for a nurse's clinical decision-making as they're administering medication to the patient, what DuLong calls "the safety net at the point of care."

The cornerstone of the Bridge system is the ability to electronically verify at the patient's bedside before the drug is administered to the patient what the company calls the five rights: right patient, right drug, right dose, right route of administration, and right time. In addition, as noted earlier, the Bridge system provides comprehensive medication documentation in the form of an electronic medication administration record, giving the hospital data that can be used to analyze and improve the institution's medication management system and patient outcomes.

The system takes the form of a small bedside computer on a rolling stand similar to one that would hold an IV bag. The key to the system's operation, DuLong explains, is the use of bar code technology for positive identification of the nurse, the patient, and the medication to be administered. All three are scanned by the bedside computer and all signs must come up positive in order for the nurse to give the drug. The Bridge system links all bedside units with the hospital's clinical information systems to verify that the patient, drug, route, time, and dosage match. If any of the five rights are wrong or a potential for a look-alike or sound-alike error exists, the nurse is immediately notified with a color-coded message on the screen. "We've created sophisticated algorithms within our software to detect those conditions when problems arise," she says, "and the computer presents a message indicating what the problem is in order to give the nurse more information to help make a better decision." The system also aggregates any "near miss" data to help the hospital identify any weak points in its medication delivery system to help prevent future close calls.

The system will alert the nurse as to whether they have the wrong patient or the wrong medication or perhaps they are simply attempting to administer the drug at the wrong time. The computer interface is a touch-sensitive screen that the nurse can use to confirm everything is correct, in addition to having a bar code scanner attached to the computer that can scan the patient's identification wristband, the nurses' and doctors' hospital badges, and medication labels. Incorporating the bar codes onto patient wristbands and hospital personnel badges requires only minor modifications in the hospital's current procedures and practices, DuLong says. In fact, the biggest problem currently lies in labeling medications, few of which come with bar coding on their packaging. Frequently what happens is that the medication is re-packaged by the hospital pharmacy in order to add the bar code, she goes on.

Herself a former nurse, DuLong says that, surprisingly, installing a system to prevent medication errors "is not at the top of the priority list" for most nurses. But, she goes on, "once they have what we call one of those ‘Bridge moments,' when they see the system prevent an error in the making, they're a believer." Nurses also see the benefit of having a system that can keep up with the rapid order changes that occur; DuLong estimates that about one-third of medication orders change in any given patient's day, noting, "That's a lot for a manual system to keep up with."

From a technology perspective, several health care IT companies are working on hand-held devices that would seem to offer convenience advantages over the Bridge system. Grotting recently hired Rusty Lewis as the company's senior VP/CTO from McKesson HBOC, where he'd held the same position. Lewis notes that the Bridge system, which is essentially a RF (radio frequency) network thereby avoiding the need for a network connecting every hospital room, is "very flexible in its engineering." As such, the system can be integrated into a hospital's existing information systems and can be adapted for use with a hand-held device that could be used by mobile health care workers as an adjunct to the primary system. However, to this point, Bridge has determined that the hand-held systems cannot provide the depth of information necessary to broadly address the scope of potential medication errors and remains committed to using the bedside units.

Marketing in the Land of Denial

The fact that the vast majority of medication errors go undetected creates challenges in marketing a solution to a problem that most hospitals are only reluctantly aware of and hope will go away. If an institution does not consider medical mistakes to be a priority problem, they certainly aren't going to be in a hurry to spend money on a solution. That was the bind Bridge found itself in until the Institute of Medicine report moved medical mistakes to the front burner. For Bridge, the timing of the report could not have been better, he admits. Because of the IOM report and the consumer awareness about medication errors it created, "every hospital board in the country is talking about this," he says. Indeed, a recent study by the American Society of Health-System Pharmacists (ASHP) listed medication errors as a major fear of patients prior to entering a hospital.

Thus, for the first time, Grotting notes, hospital management is asking, "What systems do we have in place to address this problem?" Most hospitals are assembling cross-functional teams within their institutions to address the medical mistake problem, consisting of representatives from the nursing, pharmacy, medicine, and information technology departments. While certain hospitals organized such groups prior to the IOM report or had identified staff within any or all of those respective departments to be the primary contact on this issue, with the publicity medication errors are now garnering, Grotting says these points of contact are now at a consistently high level.

Through analyses of operating costs and the cost of medication errors that Bridge has performed jointly with prospective hospital clients, Grotting contends that the company has identified annual net savings far in excess of the investment required for the Bridge system. And he believes, once medication error prevention systems become more widely adopted among US hospitals, the benefits they provide will be more easily calculated in terms of economic impact, specifically return on investment, providing additional incentive for institutions to acquire these systems. At that point, he argues, "we will be able to establish that our system improves the cost of care, as well as the quality of care." Until the Bridge system and others like it, however, are more widely implemented, Grotting admits, "it is hard to actually demonstrate to the hospitals the actual economic opportunity our system can provide."

After running an alpha version of the system at a hospital beginning in December 1998, Bridge recently launched the first commercial version in a US hospital. Bridge also recently entered into an agreement with a leading hospital alliance, Premier Inc. , in which the two will form a medication error partnership that will initially involve installation of the Bridge medication management system in as many as ten Premier member hospitals. This collaboration is part of Premier's Medication Management Initiative, which is one of a series of Premier clinical performance initiatives that challenge Premier hospitals to achieve quality levels in the top quartile of American hospitals, while managing costs at the level of the lowest quartile. Chip Caldwell, SVP of Premier's performance services business unit, explains that "Premier and Bridge will establish an advisory board to guide future product development efforts, cooperate to develop productivity improvement process and technologies, and explore the possible joint development of an enterprise to provide non-patient specific drug usage data to third parties." In addition, Premier has invested $5 million in Bridge Medical [See Deal].

While many hospitals are becoming increasingly interested in acquiring systems to prevent medication errors, some are just not quite ready to make such an investment. In Grotting's view, there are several factors that contribute to such reluctance. First, he says, certain hospitals "may not yet have come to believe such an organized approach to this problem is necessary." A second group is comprised of institutions that may be making major investments in other information technology systems that, for the most part, are necessary precedents to installing the Bridge system (e.g., installing a pharmacy information system) but aren't yet willing to purchase the Bridge system. And, Grotting acknowledges, there are those hospitals who wonder whether this start-up company will still be in business a few years down the road.

Still, the biggest obstacle to the adoption of the Bridge system—or any medication error systems—are the economics of such technology. "We need to demonstrate in our first few sites that the system really works and that the economic advantages are there," admits Grotting, who adds that, until that happens, "the economic advantages remain theoretical." One provider group to whom the benefits of such a system are more than theoretical is Inland Northwest Health Services, which has installed the Bridge system under a pilot program in several of its hospitals.

Inland handles all the information systems for 26 hospitals in Spokane, WA. Frederick L. Galusha, Inland's chief information officer, argues that no other health care information systems vendor is yet capable of providing a medication error prevention system that can rival Bridge Medical's. In particular, he notes, Bridge's system offers both the convenience of having the unit at the patient's bedside, while also being able to integrate into a hospital's existing information technology. He estimates that Bridge has an 18 to 24 month lead on other vendors who are looking to develop similar systems.

Prior to beginning the pilot program with Bridge, Galusha explains that, like most hospitals in the US, the only systems Inland used to prevent certain medication errors were limited to specific departments within the hospital, such as a pharmacy information system that could identify and weed out selected problems including possible drug interactions and allergies. None of these more limited systems, Galusha notes, is capable of producing a real-time electronic medication administration record for each patient that can be accessed through other hospital information systems or brought directly to the point of care the way the Bridge device can. "In our strategic information technology plan, we categorize Bridge's product as an expert or knowledge-based system," says Galusha, "because it can analyze operational data and provide feedback to the clinicians at the point of care, which generally means the nurses at the patient's bedside." And because the Bridge system can be integrated into existing IT systems, Galusha says it wasn't difficult to convince Inland's hospital administrators of the value these units provide.

In addition to marketing its systems to hospitals, John Grotting is looking for opportunities to create value from the data the Bridge system collects. As noted, the company will do some data gathering as part of its deal with Premier. But Bridge also has a partnership with what Grotting will only identify as a very large national payer to collect information from Bridge's early sites. Specifically, the payer is looking to collect medication data on discharged patients, information currently unavailable on a timely basis. The advantage for the payer of having this data is that care coordinators can immediately intervene with patients that are not, upon being discharged, given specific medications that improve clinical outcomes and prevent complications and re-admissions. Grotting explains that if the payer is advised that a patient has not been prescribed the appropriate medication, a care coordinator can be assigned to contact that patient in an effort to ensure they obtain and understand their drug therapies.

There are only about a half-dozen therapeutic areas where it is worthwhile for payers to manage this process but in those areas, "It's a huge economics play," according to Grotting. The way it works is that the payer has agreed to compensate the hospital for the use of the Bridge technology at the patient's bedside if Bridge can provide immediate electronic data upon discharge to the care coordinator about the patient's medication therapies. The result: Bridge designed into its system the capability to provide this data to the payer for their patients from this particular hospital. "So here is an example of where the hospital actually gets paid more than we're charging them for the technology," Grotting claims.

Bridge is initially targeting hospitals with more than 100 beds, although Grotting insists that the system will work in even the smallest hospital so long as the institution has the necessary information system to support the Bridge units. "But what we're finding is that it's generally the larger medical center, those with 200 or more beds, that are most likely to have coordinated efforts to identify and prevent medication errors," he says.

While Bridge is focusing on developing hospital-based systems, primarily because, as Grotting points out, "the most serious of lethal errors are happening in the in-patient setting and the business opportunity there is extraordinary," the company's technology platform can migrate to other types of settings. In particular, Grotting believes this type of system would be a welcome technology in settings such as nursing homes where there is only limited medical staff providing medication to a large patient base.

For now, however, Grotting says the company has its hands full focusing on the hospital market. Bridge closed a $33 million private placement in May 1999, which Grotting says will carry the company through the next couple of years, enabling Bridge to begin commercialization [See Deal].

Can the Pure-Play Survive?

Bridge will sell its systems direct to US hospitals. While still massaging the economic proposition behind pricing its system, John Grotting explains that initial work done with one client indicates that the direct cost to the hospital of the total number of errors prevented by the Bridge system would be, on an order of magnitude, two times the cost of the system. Bridge is also exploring ways of letting hospitals acquire the system without a large, up-front capital investment, what Grotting calls "a pay as you use the system models so that, in theory, there is never a pay-back period because the hospital is always ahead of the game."

While the release last fall of the IOM report has gone a long way to help Bridge overcome the obstacle of convincing hospitals of the need to address the medication error issue, the publicity the report generated has also made drug mistakes an increased priority for health care information technology companies generally. In the past, Bridge had the advantage of focusing on an issue that still lurked beneath the radar screens of these large companies. But the current noise about medication errors places the start-up more directly in competition with these larger firms.

Further clouding the issue is that, as Bridge has shifted its focus away from Jim Sweeney's original vision of an IV-based device to an approach that is strictly software-driven, the company loses a potential edge that might have differentiated Bridge from those health care IT competitors. This shift in focus also effectively levels the playing field in favor of Bridge's bigger competitors, forcing the start-up to play largely by IT rules and negating any advantage that a device-based approach may have provided.

John Grotting argues that Bridge's technological headstart in this area and the experience the company has gained by focusing exclusively on medication errors provides a significant competitive advantage. He also suggests that the shift in focus away from the Sentrysystem may be "a temporary re-sequencing of the technology," leaving open the possibility that the Sentry could be introduced at a later date. Grotting contends that the fact that Bridge has created a system from scratch to handle just medication mistakes, whereas large health care IT companies are committed to large-scale, legacy information systems, enables Bridge to more nimbly and efficiently refine its technology, while also allowing for the integration of the Bridge system into existing IT architecture.

Bridge Medical is betting that the advantages of its experience and of being a pure play will enable it to maintain its position as an early leader and distinguish it in the market as themedication error prevention company. And smaller, more focused companies often have an edge in competing against much larger rivals, if only because the problem the small firm tackles remains unimportant to the larger companies relative at least to other opportunities.

To date, that certainly has been the case for Bridge in addressing the medication error problem. The question Bridge faces: if medication errors really do become an issue of compelling concern to hospital administrators and physicians—commensurate with what industry experts believe is the real incidence of such errors—will medication errors quickly become a greater priority for the larger IT-based companies as well? In that case, can this start-up sustain a leadership position in the face of imposing competition and avoid becoming a temporary bridge until the arrival of the next generation of software solutions?

SIDEBAR

IOM Report Triggers National Debate

While the November 29, 1999 release of the Institute of Medicine (IOM) report on medical errors was hardly the first time this problem was revealed, experts believe the report is likely to bring about the most significant action to date on this issue by virtue of the national debate that has been triggered. The IOM, which is part of the National Academies of Science, cited two studies as indicating that medical errors kill anywhere from 44,000 to 98,000 people annually in the US. Even using the lower estimate means medical mistakes kill more Americans each year than highway accidents, breast cancer, or AIDS.

More than 7,000 annual deaths are reported from medication errors that occur both in and out of hospitals, exceeding fatalities from workplace injuries. And experts agree that, as noted, the vast majority of medication mistakes go unreported and unrecognized, meaning many more deaths are likely to actually be caused by a drug error, some say as high as 140,000. Conventional wisdom holds that the actual number of medication errors is 20 to 50 times the number reported but John Grotting says Bridge Medical's experience has found the actual number to be even higher. Recent studies have found that anywhere from 6.5% to 20% of patients will experience a potentially serious medication error while hospitalized, while also revealing a 21% error rate for IV drug compounding by nurses and a 9% error rate for IV drug compounding by hospital pharmacies. The total annual additional hospital costs of medication errors is estimated at more than $4 billion.

Charging that health care is a decade or more behind other high risk industries in its attention to ensuring basic safety, the report lays out a comprehensive strategy for government, industry, consumers, and health care providers to reduce medical errors. The committee that authored the report recommends a four-part plan designed to create both financial and regulatory incentives that will reduce medical errors, and calls on Congress to create a national patient safety center to develop new tools and systems needed to address this problem. The report concludes that the know-how currently exists to prevent many of these mistakes and sets a minimum goal of a 50% reduction in errors over the next five years.

The most controversial aspects of the report, based at least on initial outcry, are the recommendations concerning what types of errors need by publicly disclosed and which ones do not. The committee recommended that a nationwide, mandatory public reporting system be established under which first hospitals and then other sites where care is delivered report to state governments medical errors that result in serious harm. (Currently, about one-third of all states have some type of mandatory reporting requirements.) But for errors that do not produce serious consequences, the committee recommended federal legislation to protect the confidentiality of such data.

The ostensible purpose of treating the two types of errors differently is to encourage the growth of voluntary, confidential reporting systems so that the medical community can collect and analyze information in order to improve safety and quality. Without such confidentiality legislation, of course, the fear is that voluntarily reported information could be used in lawsuits, thereby discouraging participation by clinicians and health care organizations. The concerns expressed so far come from groups on both sides of these issues: on one hand, members of the medical community reluctant to require public disclosure fearing this information will fuel additional litigation, and on the other, trial lawyers who claim that keeping error information confidential will limit patient recourse and disincentivize the health care system to improve error prevention.

While the IOM report has raised the subject of medical mistakes to its highest profile in recent years, experts in this area are quick to point out that, within the health care community, this is hardly news. Joseph Deffenbaugh of the American Society of Health-System Pharmacists (ASHP) and a pharmacist himself, points out that the ASHP convened an expert panel in 1996 that developed a set of published recommendations that remain relevant. Among the suggestions offered by the ASHP panel were use of computerized physician order entry systems, increased use of bar coding, and improved hospital monitoring and reporting systems with redundancies built into the process to maximize the chance that an error would be caught before it reaches the patient.

In addition to recommendations from industry groups like the ASHP, several organizations have been formed in the last few years that are dedicated to bringing together the various components of the health care system that must be involved in any effort to effectively curb medication errors. Most prominent are the Institute for Safe Medication Practices (ISMP), formed in 1994 to provide information about adverse drug events; the National Coordinating Council for Medication Error Reporting and Prevention, formed in 1995 as a multi-disciplinary group of national organizations including the ASHP, the American Hospital Association, the American Medical Association, PHRMA, and the FDA; and the National Patient Safety Foundation (NPSF), which was established in 1996 by the AMA.

And the IOM report is not the first time a government-sponsored body has recommended that greater efforts be made to prevent medical mistakes. As recently as March 1998, the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry included as one of six national aims to improve the quality of health care "reducing health care errors."

Yet Bridge Medical's John Grotting and others believe that the IOM report will indeed result in significant changes being made. For one thing, no previous effort has resulted in the high level of concern and debate on this issue. President Clinton has called for a federal task force to recommend ways to prevent medical mistakes and improve patient safety. Hearings have been held and more are scheduled in both houses of Congress and numerous pieces of legislation have been introduced.

Grotting's view is that the hue and cry over medical mistakes will result in changes being made, particularly in the area of reporting adverse drug events such that this becomes a new metric that hospitals will begin to monitor on an ongoing basis. "There are too many people too passionately interested in this issue at this point in time," he says, "for the problem not to be addressed."