By Timothy Hay, Wall Street Journal

When the U.S. government told health-care providers to move their patient health records from paper files into a digital format, companies including Cerner Corp., Epic System Corp.and Allscripts Healthcare Solutions Inc. saw a major uptick in business for their electronic health record services.

But now the government, including the Centers for Medicare and Medicaid Services, is pressing these companies to make these record-systems open and interoperable with one another, in order to provide the most benefit to patients.

Companies such as Allscripts, Cerner and Epic are in the process of opening their programming interfaces to outside developers, something that is expected to make electronic health records more cloud-based and mobile as new applications are added to work with them. New applications for these record systems could also improve communications between nurses and other care-team members, and between doctors and patients.

But it is still early days for electronic health-record apps. While untold numbers of developers are making new programs for open health-record systems, investors are still learning to separate the wheat from the chaff.

Health-care investor Psilos Group has made investments in PatientSafe Solutions Inc., which makes a mobile care-coordination app for hospitals, and is looking to get ahead of the curve as top EHR providers begin opening up their platforms. The firm participated in a $30 million Series C round that the company closed last year.

Psilos Managing Member Steve Krupa and PatientSafe Chief Executive Joe Condurso talked to Venture Capital Dispatch about what is next in the race to create health-record applications.

The interview has been edited for length and clarity.

The situation sounds like it will bring new opportunities to app developers and investors, but will this actually make people healthier?

Condurso: It can actually be a life-and-death situation. If you don’t have access to patient history, to their medication information, to their lab results-these are areas of potential adverse harm. What you need is continuity of data, and of medical history. This way, patients can move between one provider and another (without their whole treatment history being lost).

Krupa: I don’t think anyone out there would argue against the fact that automation has improved quality and reduced cost for every industry in the world. Health-care is not automated. This is the beginning of that. This is how you optimize everything, all the stuff that’s done with ad-hoc old technologies today. The platforms are opening up. Once you turn that switch, the universe of possible applications expands exponentially.

What are the most important apps that need to be built for electronic-health records today?

Condurso: There needs to be architecture-type applications and clinical apps. The legacy technology that hospitals use is a on-premise, firewalled solutions. Architecture applications need to be built to move these systems away from desktops, and toward mobile devices and toward cloud-computing. Databases need to be in sync with the apps. The clinical apps will need to tech-enable nurses and phlebotomists and other frontline caregivers. There also need to be progams to engage patients, and there need to be big-data analytics that can help improve national health.

Do you mean systems like Apple Health Kit?

Krupa: Health Kit is like the Kitty Hawk. It’s the beginning, the means to fly. But it’s yet to be determined who will master all of this.

Where does PatientSafe Solutions fit into all of this?

Condurso: We build networks that enable clinical care delivery through mobile tools. We call it “mobile care orchestration.” It’s a network to increase compliance with medical regimens, an open, interoperable communications network. We work with Epic.

How aggressively is Psilos Group going to invest in electronic health record app companies in the coming years?

Krupa: By my estimate, right now there are probably 250 companies out there that are touching this area. My mission is to find the 10 best ones.

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