It took the dual disasters of 9/11 and Hurricane Katrina for PortBlue Corp. to find and develop the perfect niche for its software: the health care industry.
The Los Angeles company develops affordable Web-based software that guides executives through complicated decision-making the kind hospital administrators had to make when being overwhelmed with patients after the terrorist attacks and one of the worst hurricanes in the nation’s history.
“In health care, you can’t spend tens of millions of dollars to develop software, because doctors and hospitals can’t afford what you’d create,” said founder and Chief Executive Paul Dimitruk. “To a large extent, our competition often is a large three-ring binder in someone’s office.”
Today, the company’s two largest customers for its flagship CommandAware software are coalitions of hospitals and county emergency service agencies in hurricane-prone South Florida and, as of last month, earthquake-vulnerable Los Angeles County.
Other PortBlue packages help manage the business end of physician practices, coordinate hospital pharmacies or map out how to develop outpatient surgical facilities. The company in its earlier days created law enforcement and financial services applications, but business development outside the health care industry is taking a back seat for now.
“Young companies do a lot of zigging and zagging before you find your place and we’ve found our place in health care. There’s plenty to keep us busy here for now,” Dimitruk said.
PortBlue’s key innovation is a platform called Knowledge Capture Tool or KCT, which is used to rapidly create custom applications for clients without employing programmers.
The company interviews experts in the field, and then adds information from interviews with a client’s own administrators. Even with all that background, programs are created in weeks, not months as traditionally would have taken place.
For example, to help build its disaster management tools, the company interviewed Craig DeAtley, a nationally respected public health emergency expert from Washington, D.C. Follow-up interviews were conducted with hospital administrators in California, Florida and other states where it has sales.
One use of the software for Los Angeles hospitals would be after a major earthquake when administrators need to rapidly deploy workers. The software provides task checklists for essential workers; suggestions on how to solve particular challenges, such as damage to a surgical suite; and offers Web access to external and internal reference material and forms.
At the same time, the software can monitor how many different kinds of beds are available and share that information with county disaster officials, ambulance services and other hospitals.
In Florida, California and three other states, hospitals are using federal grants to deploy CommandAware throughout their regions. Los Angeles County’s Emergency Management Services Agency assisted 75 hospitals in obtaining a $1 million Department of Health & Human Service hospital preparedness grant, which was announced last month and will provide access to the PortBlue software for five years.
Around 250 hospitals around the country are using or are in the processing of deploying the software, Dimitruk said. While the private investor-backed company doesn’t release financials, he said revenues in 2007 doubled from the previous year, and 2008 first quarter revenues were higher than all of 2007, primarily due to the rollout of CommandAware.
Providence Health & Service’s two San Fernando Valley hospitals, St. Joseph and Holy Cross, were among the early buyers last year. In fact, the hospitals obtained the software before federal funding became available.
“What really sold us was that we could customize it with our own procedures and the expertise of our own people,” said Steve Storbakken, who oversees safety and emergency preparedness for the hospitals.
PortBlue charges $30,000 to $200,000 to create its custom software, with annual support costs of $60,000 to $180,000, according to its Web site. The company claims competing enterprise or custom applications might cost between $630,000 to more than $1 million, with annual support costs of up to $225,000 a year.
Dr. Cesar Aristeiguieta, a former director of the California Emergency Medical Services Authority, said while there is other software that can track available emergency room capacity, PortBlue’s product appears to offer a more sophisticated way to coordinate emergency response.
Aristeiguieta noted that comparable software or Web-based systems already in use around California, such as ReadyNet or EMSystem, don’t offer the same capabilities, especially in the area of communications within a hospital and between facilities.
“PortBlue has created what appears to be a great Web-based solution for hospitals in a disaster,” said Aristeiguieta. “Their challenge is going to be convincing enough agencies, (which) are cash-strapped, that their solution is best.”
Dimitruk is an attorney who began working in the private equity industry in the mid-1980s. He got the idea of launching an expert system software company while helping found and build London-based Pareto Partners, which grew to become the world’s largest currency risk management firm in the 1990s.
Pareto’s sophisticated software was dependent on a partnership with Hughes Electronics and its Malibu-based research lab, which had developed artificial intelligence for the aerospace and defense industry.
By the end of the 1990s, Dimitruk decided he wanted to create something more meaningful with that kind of technology. “Back then the technology to do what we did at Pareto was quite time-consuming and expensive,” he said. “So what I set out to do with PortBlue is develop a way to do it very economically.”
Core Business: Expert system management software, primarily for the health care industry
Employees 2008: 25
Employees 2007: 15
Goal: To be the leading provider of expert system management software for the domestic and overseas health care industry
Driving Force: Greater demand for expertise amid rapid growth and a shortage of experienced workers in the health care industry