NaviNet, founded by Tom Morrison and with Brad Waugh as president and CEO, is America’s largest healthcare communications network. Tom has been involved in healthcare IT for 25 years and was a co-founder of Firepond Partners. Brad was previously CEO of $2.6 billion financial services firm Wincor Nixdorf as well as an entrepreneur who founded Watch Hill Partners.
SM: To start off, please give me the genesis of your personal stories. Where do you come from, and what in your background has led you to this path?
TM: I come from a small town in Minnesota. I worked my way through college as a pilot and was an aeronautical engineer. My academic background has nothing to do with what I am doing today. After I graduated in engineering I went on to law school. I did both degrees at Arizona State. Out of law school I was doing some regulatory work when the Civil Aeronautics Board was a regulator.
I came to Washington, D.C., and ended up working for a computer firm in the late 1970s. I fell in love with the computer industry and have been involved with it ever since in various niches. My first niche was in airlines, and I was later in manufacturing.
For the past 25 years I have been involved with healthcare information technology. I have been through all the phases of healthcare technology and have worked in nearly all the different segments, from hospital to provider offices to managed care.
SM: In what capacity?
TM: I spent some time doing sales work, but the majority of my career has been strategy and product management.
SM: What were the names of some of the companies you were involved with?
TM: I was with McDonnell Douglas when there were only two significant players in healthcare technology. It surprises a lot of people, but in the 1980s one of those companies was McDonnell Douglas. I left there to work in a joint venture between IBM and Baxter.
They both had healthcare information technology businesses and decided to merge their independent activities in an entrepreneurial joint venture. The management team was half IBM, half Baxter, and one outsider. I was the outsider. My role there was strategy and product management.
From there I started a company with Charles Singer in Boston. That company had an unusual start. Alice Ventures out of Boston knew of me. They wanted to make some healthcare investments, but they had not found anything to invest in. They proposed a joint venture with me and the co-founder and gave us $250,000 and a blank piece of paper to come up with a business plan. We ended up doing strategy and market research consulting in healthcare information technology. We launched that company in 1998. Ultimately we sold that business to Gartner, and it formed the beginning of their healthcare practice.
SM: What was the market landscape at that point, and how did you determine what business area to focus on?
TM: It was the very beginning of the Web. There were great expectations as to what the Web was going to be, but at that point in time it was very immature. The question that I asked was, “What is fundamentally different about Web technology than existing healthcare technology?” I wanted to discover ways to leverage this new technology and architecture to solve some of the gnarly problems in the industry.
The conclusion I came to is that healthcare is an extremely complex and fragmented industry. It becomes very difficult to generate an industry consensus about anything, and whenever such consensus is made, it becomes the lowest common denominator that is politically acceptable but in reality does not work well for anyone.