Sebastopol medtech firm spawns legal wrangles, sends robot on Sonoma West hospital rounds
Tech-savvy James Gude, medical and intensive-care director for Sonoma West Medical Center, denied allegations that an electronic medical records system he helped develop endangered patient lives, as claimed in an Aug. 1 lawsuit filed by the Sebastopol hospital’s chief financial officer, fired in June.
Gude, 77, who started practicing critical-care medicine and pulmonology at former Santa Rosa Community Hospital in 1971, embraces technology that propelled him into telemedicine — using a robot to remotely interface with patients and deliver specialized medicine in Sebastopol as well as Africa. In 2006, Gude co-founded OffSiteCare Resources to take telemedicine to hospitals and clinics worldwide.
In his lawsuit, former Chief Financial Officer Douglas Goldfarb challenges the quality of the medical records software and seeks unspecified damages in an action for discrimination, retaliation and wrongful termination. Goldfarb worked for the hospital from Nov. 2015 to June 2016. The lawsuit states that Gude is in business with Dan Smith, chairman of the hospital’s board and a technology entrepreneur, and that allegedly flawed HarmoniMD medical records software donated for five years of use by the hospital may benefit the two financially.
HarmoniMD is software under development by E-Health Records International, founded in 2014 as a spinoff from OffSiteCare Resources, a telemedicine company co-founded by Gude, according to Gude in an Aug. 8 interview with the Business Journal. HarmoniMD’s coding team works in a Sebastopol office for OffSiteCare Resources roughly 100 yards from the hospital.
Several years ago, Gude hired Nick Smith (unrelated to Dan Smith) to code HarmoniMD medical-records software. E-Health Records International was created to develop and sell HarmoniMD. Dan Smith is chairman of the E-Health Records board; Nick Smith became CEO in November 2015.
Nick Smith aims to add algorithms to the medical-records software to make it predictive, to help doctors anticipate patient problems. “The ability to mine that data with reports,” he said, “to do predictions about what is going to happen is where the industry is going. The computer sees the patients’ vital signs, allergies, medications, their procedures. It can say, ‘Hey, did you think about this.’”
Co-founders Gude, Dan Smith and Nick Smith retain ownership interest along with other angel investors who have provided operating capital of about $4 million, Nick Smith said in an Aug. 9 interview with the Business Journal. “As we grow, we will need more capital. Our goal is to grow quite rapidly. We are going to aggressively pursue a marketing campaign” both overseas and domestically.
Sebastopol’s hospital, which on a typical day has about 13 patients, is the only facility in the United States where HarmoniMD operates. Six other sites include the Philippines, Tanzania, India and soon Uganda.
“There’s no competition there,” Gude said of international sites where the low-cost software is used on a trial basis.
HarmoniMD competes with more expensive systems from giant companies: Cerner, based in Kansas City, Mo.; Epic, based in Wisconsin; MEDITECH, based in Massachusetts; and McKesson, based in San Francisco. Medical records software from those companies costs $1 million to $3 million to start, Gude said, and “tens of thousands per month,” what he calls “inordinately expensive.” Before it went bankrupt, the Sebastopol hospital bought into McKesson’s Paragon electronic health record, spending roughly $3 million, including about $1.2 million in consulting fees, according to Dan Smith.
Five medical clinics in the Philippines are waiting for the next version of HarmoniMD, Nick Smith said. The largest facility using the software now is a 500-bed hospital in Tanzania. Because Internet access is poor there, data is stored on-site using a dual server instead of in the cloud.