The future of Qualifacts

CEO Klements talks reform, investment capital and product development as company looks to close behavioral health's data gap

In the last five years, behavioral electronic health record company Qualifacts has increased its customer base tenfold. But the company sees its future as an industry leader, and backed by a new majority investment in July by Boston-based Great Hill Partners, growth and development are coming fast.

"We built a good company," said Qualifacts CEO David Klements. "We have 260 customers across the country, and now is the right time for us to take what we've built to the next level."

But the next level isn't just scaling up, Klements said, or growth for growth's sake. It's about keeping Qualifacts' customers, predominately community mental health systems, ahead of ever-looming health reform requirements.

"We think we're in the best position as they look at quality outcomes, payment reform, care coordination," he said. "The byproduct of that is we'll grow a bigger customer base."

On the heels of the Great Hill investment, Qualifacts is aggregating behavioral health care benchmarks, standardizing reporting tools and weaving them into CareLogic, the company's electronic health record platform.

It's a big task because behavioral health care has traditionally lagged behind physical health care in developing consistent care protocols. There's a data gap, which means it takes longer for academic research to trickle down into clinical practice.

"The conditions in behavioral health care weren't right to accelerate outcome-driven care," Klements said. "On the primary care side, there are clear, well-defined, established protocols. There's a lot more science in primary care and a lot more art in behavioral health. What we're trying to do is change that."

One example of what Qualifacts is adding to the EHR system is the Patient Health Questionnaire 9, a nine-question tool for diagnosing and monitoring the severity of depression. Providers already use it to gauge their patients' needs, but Qualifacts wants to build it into the software, turning the basic questionnaire into an actionable tool that clinicians can track, evaluating their patient's improvement over time and adjusting the care plan as necessary.

There's a lot of potential in all that data collection, particularly in the era of payment reform and value-based reimbursement. The ability to track outcomes consistently will become more important as dollars are increasingly spent only on patients who improve.

"This sets up our customers for payment reform by demonstrating the value they're providing," Klements said. "What are we doing, is it working, and how do we know? We're trying to play our small role in that."

Clinical data captured from patient populations across the nation can also be pushed back into academic and research circles. Ideally, the increased availability of data on various treatment methods will improve the quality of care and shrink the gap from behavioral research to practice. Standardized data is also a benefit for industry executives, who can look top-down at their systems' outcomes data and compare their clinicians to peers and national averages. Data collection will also be useful as providers of all stripes try to capitalize on population health management trends that continue to crop up behind risk-based and capitation payment models.

"People with severe and persistent mental illness often have a host of other primary care ailments," Klements said. "The are fewer of them, but more expensive — they're the high utilizers. One of the things we're taking a close look at is what capabilities behavioral care providers need to provide some primary care services as well."

It wouldn't be a setup that, say, Vanderbilt Health System might use to coordinate its primary care services. But for behavioral providers who want to develop care plans and coordinate multiple teams of providers, Qualifacts is thinking about how to organize work flows and reimbursement structures to fit the managed care model.

And while Qualifacts customers are expected to remain on the provider side for the foreseeable future, Klements said he wouldn't rule out opportunities to work with insurers.

"If we identify some pattern that can be repeated, and there's a network of providers that an insurer is managing, I could see some potential opportunities for figuring out how to disseminate those best practices," he said. "I could see several paths to get there."

There's a high ceiling for what EHRs might be capable of doing in the future. Klements said down the line, EHR and tech companies might find solutions to patient engagement issues, medication adherence and post-discharge monitoring. But before the industry gets ahead of itself, Klements does acknowledge that EHRs are disruptive to providers, and not always in the revolutionary, Silicon Valley sense of the word.

"If all you're doing is adding extra work, you're not creating any value," he said. "I agree with the doctors that say EHRs affect productivity and sometimes the patient experience, so I think it's incumbent on the tech providers to develop collaboratively and add value to that equation. You have to add something they can't do on pen and paper."