IT Fuels A Small Business' Growth

American Healthways uses technology to help it improve medical care and its clients' bottom lines
Founded in 1981 as an owner and manager of hospitals, American Healthways Inc. has evolved into a manager of diseases, which involves providing health-care information to patients over the Web and phone. Its goal is to improve medical outcomes while bettering the bottom line for its health-plan clients.

The company, which coordinates and manages patient care on behalf of insurers and hospitals, signed its first disease-management contract with Principal Health Care in 1996, and over the past few years has seen explosive growth. American Healthways realized $165.5 million in annual sales in 2003, up from $75.1 million in 2001--a two-year compound annual growth rate for net income of 142%.

Some of the credit goes to the economy. Over the past 12 months, disease management has drawn intense interest from health-care plans, observes Forrester Research analyst Eric Brown. "Health plans are healthy again and can afford to invest to manage risk," he says.

But savvy corporate stewardship has played a role, too. In 1996, the company laid the foundation for its current success: It centralized its call-center operations. "When we centralized, we could house a lot more nurses, spread our overhead over more contracts, and reduce our price point in the market," says Janet Calhoun, senior VP of product development. Toward this end, CIO Don McConnell has standardized technology across the company's seven call centers to allow for rapid deployment.

Systems integration has also proven critical. By marrying its patient-records system, PopulationWorks, with its Concerto phone-dialer technology, American Healthways enabled its nurses to retrieve information and dispense advice much more efficiently.

Market demand has influenced the company's IT choices as well. "About two years ago, the challenge went from managing a few hundred thousand of a health plan's members to total population management," says Thad Perry, VP of informatics. For one of American Healthways' customers, this meant accepting and processing information associated with well over 1.4 million of its members, he adds.

To manage its growing store of data, American Healthways uses an Oracle-based data repository called the Claims Utilization Pharmacy System. The system accepts and cleanses administrative claims information from all of its customers. Linked to that is an informatics system based on SAS Enterprise Miner, a predictive modeling tool that's used for the risk stratification of patients.

American Healthways' rapid growth has necessitated a revision of its PopulationWorks application, a combination of practice-management software and Visual Basic applications that support the company's nurses. "We knew the application wasn't a scalable solution for our ultimate vision of a much larger company," says VP of product development Rufus Howe.

PopulationWorks version 4.0 is due out in a few months. While it still will rely on a Microsoft SQL database, Howe expects a move to Oracle in the future. The new version is being written in .Net.

.Net has "allowed us to do some pretty impressive things in terms of the interface and navigation," says Howe. "There's a dramatic improvement in efficiency from a navigational standpoint and a dramatic improvement in terms of effectiveness from a clinical standpoint."

Perhaps fittingly for a company that dispenses health advice, American Healthways recognizes that listening to its business clients improves the health of its IT and benefits its bottom line. According to Calhoun, clients like insurer Cigna regularly visit to review tech options and to suggest improvements. She says, "Our customers continue to help us enhance and expand not only our product portfolio but also our technology infrastructure."