By Debora Lima
South Florida startups seeking a road map to prosperity should keep a close eye on CareCloud.
The Miami-based health care technology company bucks the trend that the path to startup success is littered with failure. It’s consistently exceeded expectations since 2009, growing at a healthy clip across all metrics — revenue, employment, client base. In the process, it’s become a South Florida success story – one that illustrates how vision and dogged persistence can pay off with the right game plan.
CareCloud’s robust trajectory is fitting, given that its founder, Albert Santalo, charged ahead with a mentality many would describe as “go big or go home.”
“Albert and I would talk about it all the time: We could start small. But we felt there was a real opportunity here,” says VP of Design and Growth Marketing Mike Cuesta, a founding member of the company.
The idea was to revamp health care, an industry whose day-to-day had long been propped up by outdated technology and flawed processes. Cloud computing would provide the solution.
CareCloud would be the vehicle to modernize, streamline and cut costs, while aspiring to triple revenue within just three years.
“Obviously those were very aggressive targets,” says Ken Comée, who succeeded Santalo as CEO in April 2015.
But these goals weren’t entirely far-fetched.
Seven years following the launch of its cloud-based system, CareCloud says it has yearly revenue in the neighborhood of tens of millions of dollars and a presence across more than 1,000 medical practices nationwide.
Backed by a design-first approach and experienced leaders, its influence as a small but mighty leader in the growing cloud-computing market is palpable.
And as Comée and his team work to position it as the health care IT company “in the cloud for the next decade and beyond,” CareCloud’s local tech peers are poised to benefit, as well.
“The fact that we have venture backing from Silicon Valley and other parts of the country proves to the folks who are thinking of making this plunge that you can do it in South Florida,” Cuesta said.
“Boostrapping” is a term often bandied about the startup world.
The idea is that, before the big VC dollars roll in, entrepreneurs must bootstrap: scrape together savings, take out a second mortgage or score seed capital from family and friends.
He believed that with CareCloud, he was on to something big — an innovative solution to a major problem. In 2009, the health care industry wasted about $1.2 trillion, according to a PricewaterhouseCoopers report published that year. Administrative inefficiency was one of the main culprits. Electronic health records systems used by hospitals and medical practices didn’t help. CareCloud would.
“Albert identified early on that this was going to take some heavy investment upfront to build out,” Cuesta said. “He was looking to usher in the next generation of electronic health records through a cloud-based platform.”
Santalo could not be reached for an interview, but his statements in the early days of CareCloud mirror Cuesta’s recollections.
“Most health care IT companies start with a bootstrapped development effort. At CareCloud, we made sure to secure the proper investment capital, and then assembled the best team available,” Santalo said in 2009.
That year, CareCloud rolled out its cloud-based system for medical practices.
Instead of just focusing on patient care or office management, the platform integrates both sides of the medical practice. And because the data is stored on a remote server, doctors can access it from any internet-enabled device, and avoid purchasing costly servers.
“Not maintaining hardware is a huge advantage,” said Jonathan Rose, an associate engineer at CareCloud. “If something happens, like a flood in the doctor’s office, all their data is not lost.”
CareCloud also has its clients covered in the realm of cybersecurity. One of its main priorities in the early days was building a secure system, given the sensitivity of the information it would store. Some prospective clients had reservations.
“It’s not only patient data, which needs to be extremely secure, it’s also the financial information. It’s kind of a double whammy,” Cuesta said. “There certainly was a lot more hesitation.”
But “the cloud” has since become a less esoteric concept. And safeguards remain at the forefront of CareCloud engineers’ minds.
CareCloud also aims to offer ease. Traditional EHR systems typically require a significant amount of training. CareCloud, on the other hand, mimics programs the average person is familiar with, borrowing concepts from websites such as Facebook and Amazon.com.
For engineers, the user-friendly interface is a point of pride.
“We want everything to be pixel perfect — that’s a term we use a lot — because we want to make sure it’s easy to just pick up,” Rose said. “We do offer training, but ideally we prefer that you can just use it.”
CareCloud also has geography on its side. While an abundance of South Florida-based tech companies regard their location as a hurdle to snaring investment and scaling, Comée calls the region “a green field of opportunity.”
“You have such a large health care market in Florida, if you look at demographics of age,” he said. “It allows us to work with our customers and these large medical groups that are struggling with the exact pains we’re solving.”
According to a 2014 report by the Florida Assisted Living Federation of America, the 60-and-older demographic will account for a majority of the Sunshine State’s population growth in coming years, representing 56.9 percent of the gains.
And as the nation’s health care system continues to evolve, prioritizing quality care over quantity of care, EHR systems’ role in individual medical practices will expand.
“Now [doctors] are being monitored through quality measures,” said Dr. Robert Oller, professor and chief medical officer for the Division of Clinical Operations at Nova Southeastern University. “If they don’t [prove results], their reimbursements [from insurance carriers] will be reduced, by 2, 3 or 4 percent each year.”
The leap from the traditional fee-for-service model to a value-based approach requires doctors’ offices to track patient visits and outcomes, and properly report them, fostering additional collaboration between medical practices and their respective EHR providers.
“We’re building the products that do the calculations, so the doctor doesn’t have to be the calculator,” Comée said. “That’s where our innovation and uniqueness comes in.”
A number of CareCloud clients rave about CareCloud’s integrated platform.
Donna Branch, office manager of Rockingham Foot & Ankle Associates, calls the software a one-stop shop. The practice, which has offices in North Carolina and Viriginia, increased revenue and slashed no-shows following its adoption of CareCloud in 2014, she says.
“[Before] we had to use two separate systems to sort through patients who missed their appointments and make notes about why. With CareCloud, it’s all there in one spot; we don’t have to click back and forth,” Branch said. “Instead of us having separate people do all these separate jobs, they take care of a lot of that. We pay one price and we get all these options.”
Steering the ship
Comée had a clear set of goals when he arrived at CareCloud’s Blue Lagoon campus – and the tools to bring them to fruition.
“The No. 1 and No. 2 priorities were to focus on our clients’ success and usage of our products, and understand where the market was consolidating,” he said. “What I bring to the game is I’m a professional CEO — the operational execution.”
Before heading east from San Francisco to succeed Santalo, Comée was CEO of software company PowerReviews and Cast Iron Systems, a cloud-based software provider. IBM acquired the latter in 2010 for an undisclosed amount, citing in its subsequent news release its projection that the global cloud-computing market would grow at a compounded annual rate of 28 percent.
At CareCloud, Comée holds weekly two-hour-long meetings where leadership team members discuss company initiatives and brainstorm directives to ensure the company progresses, measures its progress and “does the right things.”
And doing the right things, he says, requires a solid team. It’s why Comée screens many new hires.
“I’m looking for extremely skilled people who have the experience but also the attitude and ability — that special extra something — and who can be ready for the work that is required here, because it’s significant. We’re a young company growing quickly, and there’s more work than we have people.”
Rank-and-file team members attest to that.
“From my view, being in the engineering department, the culture is ‘work hard, play hard.’ We all work hard. We all produce a whole lot,” Rose said. “Our customers want a bunch of features, and it’s got to work really well.”
That level of demand is why, these days, CareCloud is on the lookout for what Comée calls “athletes” — people with natural aptitude, experience and drive — even beyond the engineering department. A companywide hiring push is underway as CareCloud works to bring its staff to 300 people – a far cry from when the office was made up of just three. But it’s easier said than done.
“When digital health was just taking off and the cloud was the next big disruptor, I was the third engineer to join CareCloud,” VP of Engineering Ricardo Morales wrote in a November blog post. “It’s now seven years, tens of millions in VC funding [later], yet one of our biggest challenges is finding talent.”
CareCloud habitually hires from local coding schools, such as Wyncode Academy, and from hackathons. It also goes the traditional route of recruiting.
“We’re looking at more of those positions on a national basis, and that allows us to pull people who may be coming from our competitors or coming from vendors that are in our adjacent spaces,” Comée said.
Whatever the method, the determination still stands — to hire and to grow. And should CareCloud succeed to the extent to which its leadership – and even bystanders – hope, other startups stand to benefit, too.
“The more successes we have, that sets up the possibility for more ripple effects across the ecosystem,” says Matt Haggman, Miami program director for the Knight Foundation, which pushes to foster a sustainable startup community across the region by offering grants and networking opportunities.
Until then, CareCloud is staying the course.
CareCloud is founded by CEO Albert Santalo, Mike Cuesta, Adam Toro and Tom Packert
Rolls out electronic health records platform
Announces an oversubscribed fundraising round of $2.3 million
Raises $5 million in seed capital
Signs five-year lease for 14,265 square feet of office space in Miami’s Blue Lagoon
Among five South Florida companies recognized by Gov. Rick Scott for its “outstanding business contributions toward improving and diversifying Florida’s economy”
Triples its workforce to 80 employees; raises $16.6 million
Hires Brad Blakey as VP of sales, a position he previously held at athenahealth
Touted by Forbes magazine as a leader in the cloud-computing revolution within health care
Raises $29 million in Series B round; opens Boston office to attract top industry talent
Raises $25.5 million from Hercules Technology Growth Capital
Recognized by the Business Journal as the fastest-growing tech company in South Florida
Raises $15 million; Ken Comée named CEO
Announces $31.5 million Series C round