Chairman & CEO, Claris Healthcare Inc., Geof Auchinleck has more than 35 years of experience in the medical device field. He was part of the Vancouver-based team that built and tested the world’s first robot specifically designed to assist in surgery, then went on to develop a number of other surgical technologies, including surgical tools for laparoscopic surgery, surgical limb positioning, blood sample handling equipment, apparatus for total knee arthroplasty and surgical drapes. He holds 21 US patents for various medical device technologies.
In 1997, Geof co-founded Neoteric Technology Ltd. Neoteric developed and commercialized technologies for ensuring the correct storage, tracking, handling and administration of blood for transfusion in hospitals. This technology, BloodTrack®, is now in daily use in hospitals all over the world. In 2009, Neoteric Technology Ltd. was acquired by Haemonetics Corporation of Braintree Massachusetts (NYSE:HAE). Geof left Haemonetics in 2011.
Geof co-founded Claris Healthcare in 2012. Claris provides a platform for delivery of health care into the home. It is used for social care among family members, chronic care and remote patient monitoring and most recently in acute care – driving compliance with post-surgical recovery from total knee arthroplasty.
Geof served as Chair of the Medical Device Development Centre in Vancouver (www.mddc.org), for 22 years and continues to sit on the MDDC board. He is also a director of the AceTech Academy for Technology CEOs and as an independent direction of several medical device startups.
In 2012, Geof was awarded the Encana Principal Award by the Manning Innovation Awards Foundation, Canada’s highest award for industrial innovation, in recognition of his development of the BloodTrack transfusion system.
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SCOTT: Geof, welcome to our little show.
GEOF: Thanks very much. Thanks for having me.
SCOTT: I’d love to talk to you a little bit about how you got to this spot and maybe we can start with your early influences.
GEOF: Well, the biggest influence in my life was my father. He was orphaned by the time he was a teenager, put himself through university on scholarships and summer jobs, dragged himself through last years of the Second World War, and started with this little company called BC Tel as a junior, junior engineer. He retired in 1985 as the Senior Vice President. So he took himself from the very bottom to the very top of the largest technology employer in BC, starting from literally nothing. I mean he was alone, he had no family, and he dragged himself up from nothing. If I look on the arc of my career, my attitude is “so what’s my excuse?” I grew up in a stable home in a nice neighborhood, going to good schools, thanks to my father’s effort. So I started five rungs up the ladder.
To come anywhere close to his achievement, I sort of felt I had to do something, make something of myself. So that was a big motivator for that.
SCOTT: Interesting. How did you decide to go study engineering physics? Probably the nerdiest thing you could study.
GEOF: Well, you’re an engineering-physics grad as well, from the same program. So you know that the main reason for going into engineering physics is that you have no idea what you want to do when you grow up. And that was very much my excuse – it was a way of putting off any kind of serious decisions about my career path was other than it had to be high tech and science-y and whatever. I was always that kind of a person.
SCOTT: And so when you graduated, what was your career thought? Did you have entrepreneurship in your mind?
GEOF: No, I had all the usual things that maybe MacDonald, Dettwiler – do spacey stuff or Belmore the research at that time which, you know, later died a horrible death. But anyway you know, do telecom and fiber optic lasers. But my girlfriend at the time went into med school. And so when I saw this ad from Vancouver General Hospital looking for a biomedical engineer, I thought, “That sounds really cool. I wonder what that is.”
I mean, literally I had no idea what the field was. I had no thoughts that that was my career path. But the opportunity came up and once I looked at it, going this is really cool. I mean I can do high tech stuff, but with some meaning behind it.
And that became the theme of what as my first employer and mentor, Dr. Jim McEwan, who’s well-known in Vancouver. He said to me once, very early in my career, that you should try to find something to do that where you can do well by doing good.
And that’s been the theme. You know this is a way you can actually have a good life and make some money and have some success, but at the same time you can be proud of the fact you’re really helping people. You’re doing something important and valuable. And I could’ve written video games. But, no, I did this.
SCOTT: So can you talk a little bit about your earliest roles? I believe you started in fairly entrepreneurial tech companies.
GEOF: Well, I started as a biomedical engineer at Vancouver General Hospital and the aforementioned Dr. Jim McEwen was the guy who was running that. He was an inventor and entrepreneur in his own right – has been very, very successful in the medical device space. So he always had ideas of cool things that he had done. And you know in the early 1980s, walking around a hospital and looking at the state of technology as an engineer, it was like being a kid in a candy store. Because everywhere you look you’re going, “My God, we can do better than that. How long have you been using it?” I mean it was just like … it was the advent of electronics and computerization coming into health care. Opportunities were everywhere. And for a bunch of reasons that are kind of hard to explain, we decided it was logical to apply robotics to surgery.
So in 1984 we built the first robot ever specifically designed to assistant in surgery and used in 250 surgical procedures here in Vancouver. It was a completely insane idea – but a hell of a lot of fun.
SCOTT: Is this that limb positioner?
GEOF: That’s right. So it is a company called Andronic. Andronic Devices was the company that was founded to do that and we had two themes going on. We had robotics and automation in the blood chemistry lab and in surgery. And these were the two threads we had, the idea of applying automation technology to health care. But the surgical robot was, when I look back on it, it was voice controlled, two IBM PCs – top of the line at that time. One for the voice control system, one for the robot control system. Took two engineers to keep the thing running in the operating room. It was truly ridiculous but great fun. And probably the last remaining remnant of it is a piece of videotape from the National Geographic Society showing us using this in surgery at UBC hospital.
SCOTT: Very futuristic. That’s remarkable. So what did you learn from that venture?
GEOF: Well, the first thing we learned is that actually a product has to have some value to the users. If you think about it, we were doing limb positioning of the lower limb for arthroscopic surgery. And even in the videos we did, we said the important thing is to hold the limb really, really steady for a long period of time. Then what do you need the robot for? It’s supposed to be holding steady, not moving it around, right?
It was quite the opposite what we did. But out of that came a whole line of different things we called Arthrobots that were passive limb positioners I’ll call them. Devices you attach to either the arm or the leg and move into position, let it go, and it would hold it steady.
So then out of that, we sprung off a thing called Robotrac that AESCULAP manufactured that was for holding retractors during surgery. And then we had a thing called Endex which was for holding the camera in minimally invasive surgery that was just taking all that time. So the whole array of different positioning technologies that grew out of that idea.
SCOTT: And I believe one of those got licensed into Tenent Medical that became Smith and Nephew.
GEOF: Yeah, that was a little bit later – Tenent Medical, long after Arthrobot had, you know, slowly faded out of the market, and that product line had died. Tenent Medical came back and said, “No, there’s an application for this.”
The beach chair position for shoulder surgery was what they were after. And I said, “We need to redo that.” So I worked with Brent King at Tenent Medical and we patented a new version of Arthrobot that became known as the Spider Limb Positioner. Tenent was purchased by Smith and Nephew. It was a very successful product to this day. I mean … Version 2 … I was looking at it at the American Academy of Orthopedic Surgery just a few weeks ago, and it’s a spectacular improvement on our original design and it still, it still lives.
SCOTT: And that’s remarkable. So I believe that one of the branches got spun off called AutoMed? Can you talk that a little bit?
GEOF: So what happened is that Andronic wasn’t profitable with its surgical equipment so it kept having to get more investors. And one of our main investors was MDS Laboratories out of Mississauga.
Their interest was in the lab automation stuff that we’ve been doing. So they ultimately said, “Look, you know we’re not really interested in surgical stuff.” They sold off some of it, spun off some of it, and said, “We’re going to focus on the lab automation business.” They also acquired a company out of Minnesota called AutoMed. So we renamed the combined company AutoMed and it was actually the same company, the same team. We shifted our emphasis over to the laboratory automations. In a sense of the handling, sorting, centrifugation, aliquoting and labeling of blood tubes in high volume blood chemistry labs and that became our focus.
SCOTT: What was your role at the time?
GEOF: Vice President of Engineering.
SCOTT: So you’re quite involved with product definition, as well as the actual implementation?
GEOF: Yes. So you know … My career path has been marked by the fact that I was always the dumbest person in the room. I was very successful in hiring people who were smarter than me and I credit that to my success.
SCOTT: There you go – very wise of you. Can you tell us a little bit about the AutoMed journey, how did that company go, and what did you take from it?
GEOF: Well, it was a wonderful technology experiment – like, maybe like the Arthrobot surgical robot. We solved a lot of really, really wicked technical problems to make this thing work. And got the automation system installed in a number of and MDS Laboratories over the years, various parts and pieces of it. I think some of them were probably still in use today across the now LifeLabs which is the derivative of that same company.
The interesting thing was MDS told us that that lab automation stuff was their competitive advantage in the North American market; therefore, we were not allowed to sell the product to anyone else in North America – but we could sell it in the rest of the world. So as a result of that we spent a lot of time travelling around particularly England, for a bunch of reasons that are unimportant, getting to know all the lab managers there and trying to flog this sample automation sample preparation thing to them. Now the interesting thing is it turned out that that problem only existed for one company in the world and that was MDS because in every other laboratory, the backlog in the laboratory operation was not the sample preparation, it was the data entry – entering the lab orders into the computer systems so that the automated analysers knew what to do with the sample. Sample preparation wasn’t a big deal for anybody else. MDS was unique in the world that they always entered their lab orders at the time the blood draw was done. So their lab system knew what to do when the sample finally arrived. Therefore, sample preparation was a problem for them but only for them.
SCOTT: Maybe the market would evolve, but it wasn’t evolved at that point.
GEOF: It wasn’t. At the end of the day, we had carefully designed and spent you know I don’t know how many millions of dollars developing a product where there was only one customer in the world for it at that time. So it was … that was a great lesson. You know before you go…. Well, MDS wanted it, so they paid for it. You know they got what they wanted. That’s fine. But, you know, in terms of developing a company and being able to grow a company, it’s rather important to make sure you have more than one customer.
SCOTT:It’s remarkable how often we run into people where there’s a charismatic KOL involved in the story. And they come to believe that they’re proxy for the market.
GEOF: And one of my takeaways from that is that I now have the Rule of Three. If I find one customer who’s got a great idea for a product, that’s nice. If I find a second, that’s okay – that might be coincidence. But if I find three different customers who actually have the same problem, then I’m starting to get interested. This may actually be something fundamental with broad application. But I never will do a product for one customer again. I learned that one!
SCOTT: How many more would you talk to? I’ve heard people say 10 or 20.
GEOF: Oh yeah, you keep you keep talking but, you know, I’m not going to put any effort into it until I’ve discovered the third and, you know, the co-founder of my next business, Neoteric, that we’ll talk about in a minute, was the consummate salesman and he would get excited as soon as a customer said he wanted something, “We’ve got to build this! Right?” And I always have to say, “No, find me two more customers with the same problem and then we can start talking.”
SCOTT: After that company, then you decided it was time to start another one, but this one you would be your own company?
GEOF: Yes. So the upshot was that MDS decided they were going to consolidate operations in some place that’s called Mississauga. I think it might be out by Mars or somewhere … I’m not sure but it’s somewhere way off in eastern Canada and I am a coastal boy, I’m a Pacific Coast boy. And the idea of moving into Mississauga was not going to happen. So in 1997 it became clear that my fourteen year path at Andronic AutoMed was coming to an end and … this is a story I really like to tell because it was my first experience with a true entrepreneur and I got the best lesson in my life about entrepreneurship from a fellow named Doug Phillips.
Doug Phillips was the Chief Financial Officer and one of the Founders of MDS which by that time had become a billion dollar company. I mean he has phenomenal success – Canadian success story. And I had decided I was not moving to Mississauga so I flew out to the Head Office of MDS in Mississauga and sat down with Mr Doug Phillips. And with all the chutzpah of a 39 year old, I said, “You have a big problem because I’m not coming out to Mississauga, you’re gonna have to let me go, and it’s going to be a very expensive severance package, and all that kind of thing. But I’ve got a deal for you. And the deal is I want to take some of the projects we were thinking about at the AutoMed and spin out my own company. Start my own company.”
He would have been well justified to call security and have me hurled out the door but instead he put his feet up on the desk and said, “I love entrepreneurs. I remember back when we started this company, I was the one who had to go to the bank and beg for an extension to the credit line to cover payroll. Then another guy like you came in a few years ago, and he wanted to start his own business. I helped him get going and his businesses worth several million bucks now.” And he leaned forward and he said, “How much do you need?”
And this was nothing I had ever … I had not planned for this scenario. I mean this was completely unexpected. So I kind of blurted out, “Well, sixty thousand dollars.” And he wrote me a cheque for 60 grand and I said, “Well, I haven’t incorporated, I don’t know what equity you’re going to like and he said, “No, no, no, this is your severance. Just you make sure you keep me informed how it goes. That’s all I want from it.”
Right, now the lesson from that is that every true entrepreneur that I have met who’s been successful is so willing to give of their time, their advice, their mentorship, and even their money, to help you become a success.
SCOTT: I think that’s very true. Yes.
GEOF: And it’s a thread that I recognize again and again when I meet successful entrepreneurs. And I use the pie analogy. I think the average person on the street talks about getting a bigger slice of the pie and they have this idea that it’s a zero sum game. You know that there is a pie and I’m going to get her pick a bigger piece of it. But entrepreneurs have baked their own pie. I’ve made a pie. You want to bake a pie? Here’s my recipe. Let me give you some ingredients. I’ll heat up the oven for you. It’s what can I do to help you enjoy the success that I’ve had?
And it’s that that willingness to say this has been a fantastic experience for me. And I would love you to succeed as well. And I again, you know, I’ve taken that example from Doug Phillips and I will say again and again, if you have an idea and you’re enthusiastic, and you’re willing to put your effort and time into it, I will give you all the time I have for the price of a cup of coffee. Just remember, you get what you pay for.
SCOTT: [Laughs], there is that.
GEOF: Yeah. So anyway.
SCOTT: Sixty thousand dollars then … so….
GEOF: We founded, one of the other guys at AutoMed and I, we co-founded Neoteric Technology and our idea was to solve that problem with a data entry in the front-end elapse. So…. Because we knew everyone in the lab business in England, my partner ended up moving to England and we hammered on that market. Oh, the mistakes we made. The number of ideas we threw at the wall that didn’t work. It was enlightening, shall I say?
SCOTT: Did you learn your lessons quickly in retrospect – or quickly enough?
GEOF: Yes, well one is because we had no external funding and sixty thousand dollars basically, we had to be pretty quick at iterating – you know, trying ideas and trying to find something that people would be willing to pay for at least this, and at least that now. Probably the smartest move I made, was my co-founder was an absolutely consummate salesman. I mean he could sell anything to anyone. So we were able to sell stuff that was a little early, shall I say, early to market, but ended up with a really strong relationship with a lot of lab people in the UK.
We did attempt to solve the sample labeling and order entry problem. That led us to the problem with positive patient identification. We began evangelizing the idea of bar coded machine printed wrist banding across the hospital setting. We got a bit of traction there. And finally we ended up in a situation where we were in a lab in a hospital in St. Mary’s Hospital in Manchester, England – which I think has been shut down since – but anyway the lab manager there, you know, listened to our pitch about positive patient identification and sample labeling and all this kind of thing and said, you know, “Frankly, not much interest in fighting that battle. But I have this refrigerator full of blood units for transfusion that’s a royal problem for me and I wonder if you might be able to help us with that?”
What he was concerned about was that he would cross match all this blood, and put it in the fridge every day, and cross match it for patients who are on the surgical slate, and then during the day people would come and grab these blood units for transfusions and are supposed to fill out the logbook. Maybe they did, maybe they didn’t – it was probably illegible. The end of the day, his only option was to inventory the blood and if blood was missing, he would presume that had been transfused to the intended patient. But he said, “I really have no idea who took the blood, where it went, what happened to it, I really don’t know. Is there something you could do about that?”
Well, we’d been mucking around with bar coded wrist bands, and PDAs with barcode scanners and I look at the blood units and it’s covered in barcodes. It’s like, “Why … could we just put like a supermarket scanner next to the fridge and you when you take the blood out you go, ‘Bleep’ and it records it?” And he says, “Can you do that?” And it’s like, “Yeah I think we can do that.”
It was a classic case of if we’d listened to the customer, the problem that they needed solving was actually much simpler than the problem we were trying to solve.
SCOTT: All right.
GEOF: You know it’s like we’re trying to do all these complicated difficult things. But what they really needed was something that was actually really easy for us. And then if we just kind of shut up and listened, the customer was willing to lead us to that opportunity.
SCOTT: Remarkable. So your partner was spending a lot of time with customers, hopefully learning some things. You’re … you’re the technical guy making all these things work. So how would you decide how much of your time you should spend talking to people about their problems relative to working on the technology?
GEOF: A lot of time. You know and it’s …. The great thing again was that having a partner who basically spent his entire day, every day, talking to customers and he taught me more about sales in 15 minutes than anyone else has in my entire life. I still recall doing this. He had an appointment with a lab manager, a very busy guy, and this guy’s got 15 minutes for us. This is one of my trips over to England. So we zipped into this lab and this lab matter at 15 minutes and my partner comes in all buttoned down like a sales guy and his Armani suit and all that, got these brochures and he slaps them face down on the guy’s desk and says, “We have some things to talk about but before we do, what are the biggest problems you face in the lab today?” And then sat back and listened.
And this guy who had 15 minutes for us talked for about two hours about every problem that he faced all day long. Now, of course being the techie guy, I’m sitting there with my notebook writing down product ideas left, right, and center. “Check out this site.” You know, “Maybe this is a problem right now.”
You know I’m just like … if you just ask your customers what their problems are…. People love complaining. People love telling you what … you know, what’s going wrong and it just, you know, you then do that match. And as this guy finally wound down after all his complaining, he finally said, “You know, gentlemen, I don’t even know what it is you sell.” And my business partner says, “We can’t solve all your problems, but here’s what we can do.”
Absolutely brilliant lesson in how to do this. You find a way to get in front of customers. Then just ask them what their problems are and then look for those overlaps where you say, “You know what? I have a hammer for your nail.”
And we’ve got a pretty good box of hammers these days. If you can figure out what the nail is, probably do it.
SCOTT: Amazing. So then what was the narrative? I know a Neoteric ultimately became a blood management company.
GEOF: Well, that keystone meeting with the lab manager with his transfusion problem, we suddenly, you know, we were a sample collection company that became a risk-management company and then all of a sudden we’re a transfusion company. And that problem that he identified, very quickly, we discovered was a problem across all of the blood banks in the UK, if not the world. Inventory management within the hospitals – that getting the right blood to the right patient in the right way at the right time – was a serious, serious issue.
And so we went around and started asking things and literally within weeks of that first meeting, we were in the St. James Hospital in Leeds in England that manages six hospitals and 27, I think it was, different blood refrigeration sites across the Leeds/Bradford area, and they were crawling across the table. They said, “This is a huge issue for us. How soon can you do this?” We’re going, “OK. This is good.” So that was our first major project as we networked together 27 fridges and we’re able to track the blood units all across the city. And that became obviously a gold standard for where things went. And it was a problem that…. Well, now that product is in use all over the world.
SCOTT: So then you obviously added some features to the product and you used that as leverage points. And so, how did you build out the market?
GEOF: Well, the interesting thing was, now that we had some credibility in the blood banking market, the blood bankers came to us with their other problems and they said, “Great, you know you’ve got inventory management in the fridges done, but we’re very concerned about making sure the right blood gets to the patient. So is there some way that we can, at the bedside, you know, improve the process for confirming that we have the right blood for the patient?”
You know, as you know, if you give the wrong blood type to a patient you can seriously injure them or possibly even kill it. Right? So it becomes very important. And so all of a sudden we’re going, “Well, you know, we have this thing where we can put our coded wristbands on your patients. We could read the barcode on the wristband, read the barcode on the blood unit, and right then and there before you do the transfusion, confirm that it’s the right thing.” And, “Can you do that?” “Actually, we can.” So very quickly we ended up adding that to the product line where we not only managed the inventory in the refrigerators, we could do the test at the bedside.
And then the final leap which was, in retrospect incredibly, was I mentioned that the blood met bank managers cross matched all this blood in advance in case it was needed and put in the fridge. This was the standard process each day. We turned that around and instead we put uncross-match blood in a vending machine outside the operating room. And the idea was that most cross matching is done electronically anyway unless it’s very special needs. It’s just, this patient we’ve tested their blood, they need that kind of blood.
So, we just changed the whole thing around and said if a patient’s actually bleeding in surgery, you go outside, you put the patient I.D. under, in a barcode under the scanner and the thing goes kerchunk and says this is the best available unit for that patient. Instead of about 25 minutes to cross-match a blood unit and get it down to the … out of the blood bank … send somebody to the blood bank refrigerator and bring it down, we could do it in less than 60 seconds. The interesting thing about that, is you have a lot less inventory tied up each day. You have a lot less wastage because you aren’t cycling the blood through that doesn’t get…. A lot less labor because you’re not cross matching blood unnecessarily.
And the other really interesting thing, nobody will ever admit this, but we suspect that surgeons would say, “Patients bleeding a bit. Now, it’s going to take a little 20 minutes for somebody run to get the blood. I’ll order two units.” You know, the two units came down, “Oh, I’ve ordered them now. Transfuse them. We’ll stick them in because, you know, I’ll look like an idiot.” But when we put this thing in, the rate of transfusion dropped precipitously. And so we think that what was going on is the surgeons are going, “Just going to wait and see. Because I know I can have a blood unit in 60 seconds if I need it. Just take a look and see how that….” And a lot of the time it’s just, “Nah, we can we can do without.” Every transfusion is dangerous. It’s really good for patient care.
GEOF: But even better for the hospital, the John Radcliffe Hospital in Oxford, England published a paper showing that with one of these dispensing refrigerators, just one outside of their operating suite, they saved 1.4 million pounds sterling in blood costs in one year. We didn’t charge them enough!
SCOTT: [Laughs] That is dialing in your pricing and the value proposition. That’s a tricky thing.
GEOF: The value proposition was huge. And clearly, to this day, that approach is now being adopted worldwide that for electronic cross-match you, cross-match at the last moment and deliver it from a vending machine.
SCOTT: You really changed a lot. Like changing nursing agreements, changing workflows training. Think of all of the cascade of changes that causes in a hospital.
GEOF: It was easy.
GEOF: No, it was difficult you know. It’s, yes, a lot of nay saying. An awful lot of blood bankers when we started showing this vending machine at the blood bank and show you, we had blood bankers coming up shaking their head and saying, “Never in a million years would I allow that to happen.” But then they looked at … they thought it through and looked at the impact of thing, “This is actually a pretty good idea.”
SCOTT: What was the channel? Where you going through the hospital administration or manager of the blood product? The blood bank?
GEOF: The blood bank managers. You know, they were the ones who had to make the decisions on this thing. Now I’ve mentioned several times that we’re doing a lot of this in England with the National Health Service. It didn’t hurt that our number one supporter and first major customer who ran the blood bank of the John Radcliffe Hospital was also the chairman of the national blood and tissue service structure. He was a very, very, you know, still is, very, very influential player in this space and a very mild mannered, meek son kind of guy. But everyone knows that when Dr. Mike Murphy says so, it is so.
I mean he’s incredibly influential. And he was just a hundred percent on-side with what we were doing. He saw the value right from the beginning.
SCOTT: In this world, that’s a KOL essentially.
GEOF: KOL. Yeah, absolutely.
SCOTT: Interesting. So do you have any other sort of big lessons you learned from that before you move on to your current venture?
GEOF: Well yeah there’s … You know, be ready to pivot when the opportunities arise. Don’t get so stuck on your ideas that you’re just going to drive yourself into the ground when you go there. As I said before, make sure that you have … you’re solving a problem that many people have. Make sure you’re delivering value somewhere along the chain. You know … it’s … it’s really interesting that when we started with the bedside blood transfusion, checking things, making sure the right blood got to the real patient, we thought, “Man, this is a compelling value proposition because you won’t kill your patients anymore.”
SCOTT: Right. Yes.
GEOF: And so going around … you know, going around to hospital management and saying, you know, “Spend a hundred thousand pounds with us and we’ll make sure you don’t kill as many patients.” Actually, it doesn’t go over very well.
I always joke that, you know, imagine me saying that to a hospital CEO, you know, “We’re going to … we’re gonna get you to buy the systems so you can stop killing your patients.” And they say, “Oh, you’ve got us confused with the hospital down the street. They kill their patients. We don’t kill our patients.” Right? And if you think about it, it’s a really hard sell. No one’s going to openly admit that, “Oh yeah. You know, we put our patients at risk every day.”
Now, that, because of that, you’re never gonna sell it on that basis alone. But when you, when you have an economic argument that says, “This is actually going to save you money, it’s going to reduce the number of transfusions you have to do. AND it delivers improved patient safety.” Then it’s easy because we can do the math and say, “It makes sense to buy this thing anyway. Now I can feel good that my patients are safer.” Right? But quite frankly, selling something on the basis of better patient care and better outcomes is really hard.
SCOTT: I believe you talked about … actually a nursing time savings, which is a very real savings to a hospital.
GEOF: So I mean, with the bedside transfusion thing that the standard accepted method for starting a transfusion was to have two nurses cross-checking each other so that, you know, you had two views of checking the blood unit against the patient record and all this kind of thing. And they would go through a 48 step procedure, took about 34 minutes to do before they could actually start the transfusion. One of the things we noted right from beginning is, what do you have when you have two people who were responsible for something? You actually have nobody responsible for it because they’re all assuming the other person is.
Anyway, we replaced that with a PDA and the scanning of barcodes and the cross-checking was done by the handheld computer. So now you only need one nurse because half of the work is being done by the computer. You only need to follow 24 steps, and you can do it in 17 minutes. So half the staff, half the time. And that was a saving, I think it was 12 pounds and 33 pence per transfusion according to a study done by the John Radcliffe Hospital. So there we had an economic argument, not a huge amount of money but they did hundreds of transfusions a month. So there’s something there. So they were able to say this system saves us money and certainly the nurses loved it – they didn’t have to run around, find somebody else, and stand there for half an hour doing this procedure. They could just get it done. Right?
SCOTT: It’s not merely the savings of a certain number of minutes of nurses. It’s probably all sorts of other efficiencies in their operation.
GEOF: Exactly. Exactly. And everyone looked at and said “This is actually safer and better.” So at the end of the day the economic argument is what won the deal for us.
SCOTT: Fantastic. So can you just briefly talk about what was the outcome of that company?
GEOF: Yes. So we were very successful in Europe selling various products and then decided there was rather large market called the United States of America that could benefit from our product. We didn’t see that it was possible for us to create a direct sales force in the US. I mean we really had one sales guy in the U.K. – my partner – but he could reach 50 million people in a day’s drive. And so it was at least reasonably feasible for him to do that. In the US we realized we’re not going to be able to do that.
So we went looking for potential distribution partners and we found this company in Boston called Haemonetics that calls itself THE blood management company and we’re saying, “Hmm … That seems to be what we do. We should talk to these guys.” So we went to their headquarters in Braintree, Massachusetts and had a wonderful meeting with their entire C-Suite. These guys just eating out of our hands and we’re telling them what everything we’re doing and how it fits perfectly with a big gap in their product line. And it’s just like, “This is just going great!” And we kind of wind down at the end and then hit our punch line and say, “Therefore, we’d like to offer Haemonetics the opportunity to distribute our product.”
And the CEO laughs and says, “We don’t distribute other people’s products. Sorry.” We going, “What was this all about?” Right? And we’re kind of getting ready to pack up and go home with our tail between our legs. He says, “No, no, sit down. We don’t distribute other people’s products – but we do buy companies.”
I mean that hadn’t crossed our mind that that was a possibility. Long story short, in April 2009 Haemonetics bought Neoteric and tucked it into their operation and they’ve done a fantastic job whether they’ve taken it all over the world, they’ve improved the product line, they’ve continued to develop it. And I’d to like to think it’s been hugely financially successful for them as well. So yeah, it was a really, really good outcome for us. They were THE blood management company and continue to be so.
So that put me in a position with a little bit of cash in my pocket and an opportunity to work for a large organization. I’m not a large organization guy. That didn’t last very long.
SCOTT: No, exactly, that didn’t last long before you were saying, “Oh, maybe this retirement thing isn’t going to work for me.”
GEOF: Well, I decided to take a break from them and I guess it was 2011. So, the middle of 2011, I resigned, and went home and mowed the lawn, did a few other things. I did retirement kinds of things. Unfortunately I got fired from that job. I didn’t know it was possible to be fired from retirement but it was.
And his timing was perfect because I’d just kind of reached that level of, you know, like you know, I’m kind of young to be bored.” And so we launched a company and we now call it Claris Healthcare. And this time we decided we’re gonna take all those lessons we learned, and do it right. We started with the presumption that our opinion, although interesting, was irrelevant. What really matters is the needs of a real customer. So we went out into the community and started asking questions about what is needed in health care today.
And we very quickly converged on a common theme that the aging population demographic is going to radically disrupt the way we deliver health care and that something has to happen. We had one person say that roughly 70% of what’s currently done in institutional settings has to move into the community and into the home because the institutional settings is exactly the wrong place for a senior suffering from chronic conditions which is what we’re going to be facing.
So we went around and interviewed a whole lot of people saying, “Okay, if that’s the thing, what are the events that lead to the decision to institutionalize a senior and what can we do to intervene and put that off by a day, a week, a year, a month?” You know, just push it off a little bit longer. And we converged on two things that mattered. One was medication management. Medication problems are the root of many, many hospital admissions for people over the age of 50.
And the second was communications. And the best summary of this was from a hospitalist in Victoria, BC actually. He said, “Look, I’m at the end of an inexorable process for a senior living on their own. If they get in trouble, they really only have one option, that’s to dial 9-1-1. The 9-1-1 operator has only one option, sends the paramedics, the paramedics have only one option, scoop this person up, bring them to the emergency room. The emergency room only has one option: stick him in a bed until I can come and talk to them. A large proportion of the time, the outcome is that, “If only I could have spoken to you before all of this happened, you could have just done this, this, and this, and you would have been fine.” And now we’ve wasted all this money, we’ve endangered the patient, we stressed the system – you know it’s just like completely ridiculous. He said, “If you had some way of getting timely health care information and coaching to that person in their own home, we could have avoided all this.”
GEOF: So being techie guys, we whipped out our iPads and said, “Face time, you know, communications, and all that.” And he said, “Yeah. Now think of your average eighty-five year old trying to use a smartphone and get a video chat going to the physician.” Probably not going to happen. That was when the light went on for us – that we have huge amount of technology to deliver excellent information communications stuff into the home that traditionally hasn’t been particularly accessible to our older population. So if we could establish that platform for the delivery of care into the home, there’s a ton of really interesting things we can do. So that became the focus of Claris Healthcare.
SCOTT: And so what happened when you went to market with that concept?
GEOF: Well, we started with the senior being cared for by the family. So we now call it social care. Our product there is called Claris Companion. The idea is that if you have your mother widowed, living in the family home by herself, how could you engage her in other modes of communication other than the good old fashioned telephone that would allow you to keep track of how active they are, whether they’re taking the medications, you know, they’re in touch with people, up and about when they should be. So we created this platform that engaged the senior around photograph sharing, video sharing, various types of messaging, you know which is actually text message and email but they don’t know what apps this message is coming in, video chat. You know they can do all these kinds of things in incredibly simple way to stay socially engaged.
At the same time, you start establishing patterns of behavior of what they do each day and how they respond and how much they interact with the platform. That if you see a massive disruption, you know something’s going on. Most seniors, having a mental age of 15 to 20 years younger than their actual physical age, they don’t want an aide for seniors because that’s admitting frailty and things like that.
Nobody wants to go there. We want to think we’re younger than we are. So we position this as a social communications platform which just happens to be able to deliver timely health care information and monitoring when needed. But that’s not its primary purpose. And we nailed it. Seniors love this thing. They get engaged with this thing. They use it literally until they die. You know, it’s … we have customers who bought this thing early on and they use it every day, and have been for years. So, we got that part right. The only problem, the only lesson we took from it, seniors won’t pay for this.
SCOTT: Oh yes.
GEOF: This is the, this is the greatest generation, this is Depression generation we’re going to end of it going, “That’s expensive. You want forty nine dollars a month?” You know, it’s like…. We offer a cell plan and you know like, they don’t even have to hook up Wi-Fi. I mean they just turn it on and it’s connected. You know we’re trying to eliminate all of the impediments. So, it turns out that the buyer is the daughter. The daughter who is sort of the self-appointed family caregiver, usually the daughter, can be the son, but the self-appointed family caregiver who’s worrying about mom. You know, “Is she lying on the floor, just out of reach of the phone this morning?” You know. So, they’re the ones who are willing to pay for this. So, our user buyer and our economic buyer are two different people.
There’s actually third fly in the ointment. That’s the … that’s the granddaughter. You know PhD in Computer Engineering or something and says, “Oh, Granny, you know I can get you an iPad and put a few apps on it and you’ll be away to the races.” And we have to explain to that technical expert, that technical buyer, that there are a huge number of problems that you encounter if you give ‘standard technology’ to a senior. For example, many seniors have a bit of tremor on their finger. Yeah. He put a tremoring finger on an iPad, the iPod is going to see me trying to swipe right, not press a button. So, incredible levels of frustration with the standard operations that – we solved a lot of those problems and we have to sell a lot to the technical buyer. So it becomes a three boundary offensive. It’s difficult.
It’s really … Direct to consumers is hard. It’s hard especially when you have three different players involved. You know, we do have lots of these things in use and, you know, some success, and we’re delivering family-based care into the home which was one application for the platform. But we also have a second app. We have three applications for the platform in the market right now.
The second one we call Claris Continuum, and it is intended for homecare providers to manage chronic conditions for seniors in their own home. So what we do there is we add Bluetooth connected weigh-scale, blood pressure cuff and a few sensors to measure vital signs. And set this thing up to remind the seniors to do a few measurements each day and to report in and coach them on, you know, you should be doing a little more of this, a little less that, you know that kind of thing. And that’s delivered through homecare agencies to help them triage their….
SCOTT: Is that getting traction?
That is getting traction, particularly in the U.S. right now. There are new remote patient monitoring codes for Medicare that will pay for this. So this has just suddenly taken off for us.
SCOTT: I understand you’re also working on a knee rehab or surgical rehab.
GEOF: Correct. Yes. So then again, this is exactly the same platform, same tablet and everything. But in this case, we came across an opportunity in joint replacement surgery where the people in charge, the care navigators in charge of the recovery of a patient after surgery are saying, “We actually have a little bit of a problem here. Because we give the same instructions to all the patients. Some of them seem to be getting better and some of them don’t seem to be getting better. But when they report in, they all say they’re doing everything that’s been prescribed and you know, “Oh yes, I’m icing my knees six times, I’m doing my exercising.” Well, how come some you are getting better and some aren’t?
And so the question is, “What are you actually doing?” So, we added a sensor that we stick on the patient’s body that measures their activity so we know how many steps they’ve taken, what the range of motion in each knee flexion is. Whether they’re icing. We can tell whether they put an ice pack on their knee. How much time they’re spending standing, sitting, lying down. And we use that to drive a coaching and encouragement platform. So, you know, are … we have this thing that says, you know, “It’s time for you to do this” or “Maybe a little bit too much walking today” and this kind of thing. So it becomes a coaching system in the home versus being monitored by the care navigators. But now the patient knows they’re being watched. So the compliance levels go way, way up and surprise. The better compliance, the better the outcome, the faster the recovery. Remarkably faster average recovery time, reduction in physical therapy visits, and other interventions.
SCOTT: Now that the success of that business model is really tied to a reimbursement model.
GEOF: Yes. So again, things have changed in reimbursement for joint replacements in the US in a very positive way for us. Value-based payment schemes are coming to the fore now. Medicare has been running things since 2016 I think it was, of comprehensive care for joint replacement and now there’s bundled payment for care improvement advanced in these various bundled payment schemes. The idea there is that Medicare in the US has said, “You know we paid for millions of knee replacements for example, and we know what it should cost. It should cost twenty-five thousand dollars. Right. So if it costs more than that, you’ve done something wrong.
On the other hand, if you can figure out how to make it cost less than that, we’d be happy to share those savings with you.” So now for the hospitals and the care providers, the motivation is not what, “Why don’t we just keep you in hospital for a couple extra days at a thousand bucks a day.” It’s, “How can we get you out of here?” At same time there are penalties for poor outcomes so you know there is, there is a proper balance here but the motivation now is to see if we can get patients home faster at lower costs, lower risk, better outcomes. And so we walked into this marketplace at exactly the right time with something that drives…
SCOTT: Sometimes luck is the driver of success. Timing. It’s all around timing.
GEOF: It’s timing, that’s right. I always say that, you know, the main trick in business is surviving long enough to be successful.
SCOTT: Yes, “Keep your stick on the ice” as we say in Canada.
SCOTT: That’s remarkable. So that looks … sounds that you’ve got you’re on to a great start with your new venture and you’re getting traction in three different verticals all at the same time.
GEOF: Yes, exactly.
SCOTT: You know it’s really, really exciting.
GEOF: And so, you know, I said my entire career has been a lesson of short, sharp lessons from the marketplace. And we’re waiting to hear from the market about this product and what it thinks. But so far indications are good.
SCOTT: Fantastic. As we wrap up, do you have any sort of final observations or wisdom to share with our audience?
GEOF: It’s a great ride. It’s … entrepreneurship itself is a really wonderful way of building a great life. Entrepreneurship and medical devices and health care has that extra cachet of you are doing something important. You’re doing something valuable. Doing well by doing good.
SCOTT: Thanks for watching. I hope you really enjoyed our interview with Geof Auchinleck. Stay tuned, we have a lot more very interesting entrepreneurs for you teed up.