Building a Healthcare IT Company to $100 Million: Dr. Rob Langdon, Co-Founder of T-System (Part 2)

Sramana Mitra: You built this as a startup company?

Rob Langdon: Yes, we started out of our garage.

Sramana Mitra: What year are we talking about?

Rob Langdon: 1995.

Sramana Mitra: Who developed the product?

Rob Langdon: Woodrow Gandy and I developed it and spent hours and hours per day developing it. We drove our families and wives crazy because we were obsessed with this.

Sramana Mitra: Obviously, this is from your own experience as an ER doctor that you were designing the solution?

Rob Langdon: Yes, there’s one other aspect to this. Initially, we thought the solution would be a computer software product. There was over 100 software documentation products that had been developed and marketed. We thought we would do the same thing – develop a software program. What we said was, “We’ve to do it on paper first in real time.” The templates were initially a design step for a later software product. As we started using these paper templates, we realized that these things solved the problems beautifully. They can be used as a medical-legal record. They can be used by the billing company. They are extremely efficient. This very simple thing was tangent to our original idea.

Sramana Mitra: You basically generated forms that doctors were filling up and then using them as documentation for filing purposes?

Rob Langdon: Yes, it was accepted by the insurance companies and medical records.

Sramana Mitra: It was a paper-form product you went to market with?

Rob Langdon: Yes. We tried it out in a couple of local hospitals. That was the key point. We were able to implement it at our own hospital. The real question is, “Will it really work outside of your own private area? Can you go to another hospital as a test case?” That was a key test of the product to really go to an outside hospital where we didn’t practice and where we weren’t part of the leadership group. Our first pilot site was a big success.

Sramana Mitra: How much did the first hospital pay you for?

Rob Langdon: The first hospital paid us $60,000 a year. We tried to charge a lump-sum base equal to what the value of the product would be in 5 years up front. They would save dictation cost, which ranges anywhere from $100,000 to $750,000.

Sramana Mitra: What did that entail? You provided the forms and then would you digitize the forms?

Rob Langdon: No, we just license the use of the copy of the forms.

This segment is part 2 in the series : Building a Healthcare IT Company to $100 Million: Dr. Rob Langdon, Co-Founder of T-System
1 2 3 4 5 6