The Business Journal
April 19, 2002

wired.MD moves to second-generation product

Authored by Shelley Herochik

wired.MD, a Portland-based patient education software developer, has introduced the second generation of its signature product, streaMed. Mark Friess, the company’s founder and CEO, said the update of the original version is a “patient education solution” using five-minute informational videos to give patients supplemental information about their conditions “at the point of care and beyond.” The videos are used in the exam rooms, while patients are waiting to see the doctor; in patient education rooms and health resource centers; and in the patient’s homes.

Friess, who founded the company in March 2000 after completing a year of medical school at Oregon Health & Sciences University, said that the system saves time and money for physicians who currently deliver patient education in person. “The doctor is the most expensive education delivery model in the world,” he said.

Studies have shown that the video system improves compliance and outcomes and cuts down on follow-up office and emergency room visits, Friess said. Child fever visits, for example, decreased by 30 percent after using a video patient education system. In addition, Friess said that patients retain 16 times as much information from videos as from text handouts.

Patient’s individual physicians recommend appropriate sites on the internet with information specific to their conditions, and they are directed to those sites by the streaMed system. “Patients consider their doctors’ recommendations critical,” Friess said. “More than 63 percent of patients said that they would switch doctors to find one who would recommend reliable web sites.” He said that it takes 30 minutes for patients to find sites on the internet, with only a one in five chance of finding appropriate information. “Eighty-five percent of patients who search for information on the internet are concerned about reliability,” he said.

streaMed’s primary care package offers videos on conditions ranging from Alzheimer’s disease to Varicose Veins. Version 2.0 added 75 new videos, for a total of 230, and 260 new text handouts. The release of Version 2.0, and the new videos, “was all planned, part of our development cycle,” Friess said. Version 2.0 innovations allow patients to review the text of videos, complete a feedback survey with questions selected by their doctors, access related videos, and, if the doctor chooses, have the option to e-mail questions directly to him/her.

The patient education sites are also in Spanish, and are accessible “regardless of literacy level,” Friess said. Only one out of 10 patients is satisfied with standard text handouts, which are not sensitive to literacy levels, Friess said.

Since wired.MD introduced its first version six months ago, the company has attracted 30 clients, including Oregon Health & Sciences University clinics and Kaiser Permanente’s Health Resource Center. The business model is set up to market streaMed to health care organizations “with one to hundreds of doctors,” Friess said.

Friess said that wired.MD has several advantages over competitors in the patient education industry. “There are four sources of information. Text handouts are major players. Hits on health care web sites, without physician recommendations, are a hollow victory. Video cassettes have storage issues, and most of them are too long to hold the patient’s attention,” he said. The fourth source is online video.

“wired.MD is doctor-prescribed, in a video format, and is delivered at the point of care and into the patient’s home,” Friess said. “No other company has been able to put that combination together.”

Friess said that the videos take advantage of visual cues to get their message across. “If the patient needs to take medicine for two weeks, a calendar pops up on the video with two weeks marked off. The doctor could never replicate that information delivery in his office." Videos also demonstrate the proper use of drugs and equipment, list symptoms and potential treatments and include information on when to call your doctor.

If there is a downside to the system, Friess said, “It’s the digital divide. Patients need a home computer.” Those who don’t can view the videos in an exam room and take the text handouts home.

The cost of the system varies. Friess said the annual software license ranged from $40 to $160 per month per doctor. Total costs depend on the number of doctors and exam rooms; the cost increases with usage. The median cost is approximately $80 per month per doctor, but Friess said that could break down to as little as 10 cents per patient.

Friess is equally reluctant to talk about the company’s finances. It is privately held, financed by a selected group of investors, he said. The funding is stable. “This is not ‘milestone’ funding, which is based on achieving specific business goals,” he said.

His goals for the company include a possible IPO or an acquisition. “First, we’re going to make sure to maximize the company’s potential,” he said. “This will make us very desirable as an IPO or an acquisition. It could be very valuable for a larger company to have a robust patient education solution,” he said.