Feature Story

Sunquest on its R&D

February 2001
Eric Skjei

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Mark Emkjer, who has been with Sunquest Information Systems since January 1999, says the company will significantly expand its research and development budget over the next few years. The company has, on average, spent $16 to $18 million annually, but it will increase that amount by at least 50 to 70 percent during the next four years and beyond.

Much of the additional outlay will be devoted to developing a combined clinical suite. The suite will integrate radiology (FlexiRad), pharmacy (FlexiMed), laboratory (FlexiLab), Sunquest Financial, and Sunquest’s clinical alerting product, Clinical Event Manager (CEM).

By employing a Web-enabled front end, the suite can use common, interoperable technology-database, security, maintenance-to offer users a number of benefits, such as combined clinical views. "A physician, for example, will be able to look at cumulative pharmacy orders, lab results, and radiology images," says Emkjer. "Although all these products exist today, the tight integration and interoperability will occur over the next two years."

Like many LIS vendors, Sunquest plans to offer its clients more deployment options, including one that will expand its current ASP offering. "Many of our lab clients have told us they would like to ASP our mainstream products-they want us to host the data and support the system, to make it available to them through a thin client," says Emkjer.

Sunquest also plans to establish a franchise ASP model so customers-most likely large core laboratories-can act as the ASP and offer clinical data management services to smaller facilities.

This is not Sunquest’s first foray into the ASP world, notes Emkjer. "We already have ASP models that have been operational for over one year" and that offer the software products Sunquest acquired through its purchase of Antrim. Those applications include financial (e-Financial), hospital (e-Hospital Lab), and commercial laboratory (e-Reference Lab) products, and the Sunquest clinical alerting product (e-CEM).

"That product line, which is developed and managed from the Sunquest Plano [Tex.] location, is called e-Suite and is targeted primarily at hospitals of 150 beds or fewer and small to medium-sized commercial laboratories," explains Emkjer. "We’ve made significant investments in security, encryption tools, a data center, and all the other protocols, systems, and processes that are necessary for an ASP product line to succeed." (In keeping with the ASP model, e-Suite applications are available for an initial implementation charge and a fixed monthly fee.)

How are clients responding? "They seem to love it," says Nancy Smith, director of business operations for e-Suite products. Smith, who has been with Sunquest Plano since May 1999, adds, "They virtually see no difference between having these applications hosted here or down the hall."

Part of the reason, she continues, is that Sunquest has fine-tuned response times by setting up a hardware-to-hardware VPN (virtual private network) using routers from Cisco and the services of UUNET, a large Internet services provider.

"We have a VPN tunnel with tremendous response time, so for clients, it’s just like they’re working on a workstation hooked to a mainframe down the hall," says Smith.

The initial interest in e-Suite products has come from smaller laboratories, 10 of which are now subscribing. "When they start looking for a product in their price range, they find they can either get a small, in-house, PC-based system with limited functionality, or they can gain access to the same software that’s used by groups like SmithKline, Quest, LabCorp, the Mayo Clinic, and others," says Smith.

The idea underlying the ASP model is not new, she adds. "People like SMS and others have had shared host systems for eons," she says. "The difference is that now Internet technology has made the delivery affordable." Instead of a costly dedicated dialup line, clients can have the best of both worlds using the public telecommunications infrastructure, but, thanks to VPN technology, in a way that offers the benefits of a private network at an affordable cost.

Emkjer expects a hitherto embryonic market for e-Suite to grow in the first quarter of 2001. "When it comes to mission-critical clinical systems, there’s been some inertia in the marketplace," he says. "This is probably based on fear of putting clinical data on the Internet and lack of understanding of some of the more advanced and powerful encryption and other security technologies available to ensure privacy and confidentiality."

Sunquest e-Suite clients ask about security, but their concerns, says Smith, are alleviated fairly quickly. "Our staff in Plano has created a system here that far exceeds HIPAA requirements," she says. "And once you start pointing out to prospective clients how safe a VPN is and how reliable the security of, say, ATMs or online banking has become, their concerns diminish."

Another large chunk of Sunquest R&D investment is earmarked for a new product called Diagnostix.com, a business-to-business product for the laboratory outreach market. Dissatisfied with earlier ventures fielded in recent years by nonlaboratory firms, Sunquest clients asked the company to consider competing in this arena, according to Emkjer. "They kept saying, ’What we’re getting is not what we want. You’ve got the domain expertise; why don’t you create a physician outreach solution for us?’"

With Diagnostix.com, physicians will be able to order and view laboratory results, examine pharmacy data and radiology images, benefit from clinical alerting capabilities, encode and bill electronically, and improve workflow. "Our results viewing code is completed right now and is being implemented," says Emkjer. "Orders and alerts are in process and will be completed and installed within six months."

The product also will allow physicians to "enable" results, meaning they will be able to make annotated results accessible for patient viewing. "The result would be converted into nonmedical language," says Emkjer, "with physician comments, graphics, and links to self-help knowledge bases."

Sunquest has enlisted three alpha sites to serve as test beds for Diagnostix.com-the Cleveland Clinic, Aurora Consolidated Labs, Milwaukee, and Promedica Health System, Toledo, Ohio. It is working with these institutions on prototypical use cases.

"Use cases go beyond just defining a function or feature," explains Emkjer. "They involve drilling down to a level where we replicate how a user might actually interact with the system and work through the actual workflow process."

At the same time that it is doubling its R&D investment, Sunquest is looking for ways to leverage that investment. Like many software companies worldwide, it is finding that one promising way to do so is to take advantage of information technology talent available overseas.

In late 1999 the company opened Sunquest India in Bangalore, where the universities have a reputation for turning out some of the world’s best computer scientists and mathematicians. Sunquest India’s current complement of 47 employees is projected to grow to 119 by June.

"The Bangalore operation is primarily involved in building the code," says Emkjer. "The intellectual property, in terms of the functional requirement definition, the marketing requirements, and the system requirement documents, are all created here. Then we ship those specs to India; they build the code, perform the QC, and send it back to us."

To ensure the United States and India offices interact effectively, Sunquest hosted an initial cadre of Indian employee nationals at its U.S. offices for several months last year before sending them to Bangalore. "We got to know them and they got to know us," says Emkjer. "We gave them an incentive to do a great job for us in building the Sunquest India operation, and there are now regular visits back and forth between India and the U.S."

The benefits of this approach are significant, adds Emkjer. "The dual approach allows us to select top industry talent in both countries while providing development 24 hours a day."

Development appears to be the operative word at Sunquest. "From my perspective," says Emkjer, "our business has incredible upside potential. The real value of Sunquest lies about two years ahead, when we have fully developed and marketed our combined clinical suite and alerting and our ASP business, and Diagnostix.com has become the dynamic business it has the clear potential to become."

Eric Skjei is a freelance writer in Stinson Beach, Calif.