CareCloud, a company that offers cloud-based electronic health record software, says it tripled its growth last year — helped by the U.S. government mandate that doctors be fully transitioned to electronic records by 2014.

Founded in 2009, the private Miami, Florida company told VentureBeat that its expects to see its revenues triple again this year. The company wouldn’t specify exact revenue for 2012, but said it was in the range of $8 million to $10 million.

CareCloud is a great example of the technology revolution that is finally hitting health care. (We’re focusing on the most disruptive of these trends at our HealthBeat event in May, titled: “Smart Doctors, Smart Patients.”)

The market for electronic medical records (EMRs) is estimated at between $6 billion and $10 billion, and upstarts like CareCloud are shaking it up with new technology. CareCloud helps doctors move their records over to well-designed, web-based dashboards — while keeping it all stored on the cloud and accessible on devices like iPads and tablets.

Richard Close, an analyst with investment bank Avondale Partners who covers the EMR industry closely, is so impressed by CareCloud’s user interface and intuitive workflow that he likens it the company’s software to a morph of “Facebook on the iPhone.” See an example of CareCloud’s profile screenshot below.

CareCloud, which is built on Ruby on Rails, is going up against older, entrenched companies like Allscripts, Cerner, Siemens, Epic, McKesson, and GE — most of them still offering antiquated, non-cloud systems — but which jumped on the electronic record trend well before companies like CareCloud were even founded.

These companies have enjoyed a significant portion of the $19 billion in government subsidies, which began getting doled out in 2009. The subsidies are earmarked for doctors to help them make the move to electronic records. But those doctors often chose the most established companies, even if they had outdated technology. The biggest of the vendors benefited from significant lobbying, and other ties with government and U.S. Congress.

However, CareCloud has a big advantage over these other vendors, because it charges doctors only in the low single-digit thousands for implementation. And because it is cloud-based, it can update its software automatically, so doctors can stay on top of complex, fast-moving regulation and compliance mandates.

Legacy vendors typically charge around $30,000 per doctor for implementation and then more still for subsequent support and upkeep. They’re also often more difficult to integrate with other, emerging technologies. Albert Santalo, the founder and CEO of CareCloud, likens the older players to the “walking dead … it’s a fight among dinosaurs.”

Not that this is a slam dunk for CareCloud. Spurred by subsidies, many of the largest hospitals quickly moved to embrace legacy systems like Epic, which offer EMRs with just about everything most need, like practice management software, billing, and compliance. And once implemented, these systems are difficult to rip out, if only because hospital administrators are embarrassed to admit they made a mistake with their original selection. And doctors practicing in surrounding regions find it’s easier to settle on these same system, too, for ease of mind that they’ll at least integrate well with hospital records. Many doctors don’t have time to research technology, so they are hesitant to bet on newcomers.

Take, for example, the fate of Athenahealth, a company that trail-blazed the way with a cloud-based EMR in 2006. The company has grown quickly and boasts a market value of around $3 billion. But it only enjoys about 4 percent of market share, according to some estimates, and has faced problems breaking the biggest strongholds of legacy players: large hospital systems that are resistant to change. Recently, Avondale’s Close downgraded Athenahealth, saying he was concerned about competition.

Most of the industry’s new business is coming from the small practices that were slower to make the move to electronic records in the first place. Only about 75 percent of the industry’s doctors have made the transition to electronic records so far, meaning about 25 percent of the market is still in play by 2014, according to Avondale’s Close.

That’s where CareCloud comes in. It offers an all-cloud system that’s even more flexible than Athenahealth’s by offering doctors the capability to integrate parts of it more easily with their existing vendors. For example, aside from its EHR software, Athenahealth offers a “practice management” software  that requires doctors to use the entire package — practice management, billing, collections, etc. CareCloud, however, allows them to pick and chose among components of its practice management software. This makes it easy for large hospitals and smaller practices to make a switch. And this is where CareCloud is having a field day, said company spokesman John Hallock. Up to 17 percent of practices are considering making a switch in their EMR system by the end of this year, according to a survey by Black Book Rankings.

Take the Miami Children’s Hospital system. It wasn’t happy with its internal billing system, and it didn’t want to entrust it to a legacy vendor that some of its practices were using already: Cerner. So it chose CareCloud, which offered to handle its billing, but also allowed Miami to keep its other Cerner implementations in place. Miami couldn’t select Athenahealth, which would have required ejecting Cerner functionality that Miami Children’s was happy with. Avondale Partners analyst Close agrees this is big for CareCloud: “For CareCloud to go in and say, ‘You don’t need to rip that system out, we’ll interface with it,’ that’s an advantage.”

CareCloud isn’t the only cloud-based EMR vendor showing significant growth. Practice Fusion is another company generating buzz. It has offered a free medical record system, deciding it would be better to attract doctors that way, and then support the site through advertising. It has raised $64 million. However, Practice Fusion doesn’t offer a fully integrated billing or practice management system like CareCloud does.

CareCloud has received more than $20 million in a first round of funding from Intel Capital and Norwest Venture Partners in 2011, but it is now raising another round of capital.

In a statement this week, CareCloud said it has more than 2,000 customers (hospitals, doctors) in 45 states, and reaches 4.5 million patients. Separately, the company told VentureBeat it will be debuting its latest software — featuring better workflow functionality for doctors — at the HIMSS conference New Orleans on March 5.

[Update: Corrected the reference to amount raised by Practice Fusion, as well as explanation of its business model]

CareCloud Electric Health Record

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Adobe has acquired electronic signature startup EchoSign for an undisclosed price.

EchoSign is a web-based provider of electronic signatures. The technology will be integrated into Adobe’s document exchange services platform to ensure secure delivery of documents for universal access, review and approval. If this kind of technology takes off, it could finally kill the fax machine and paper contracts.

That’s the goal, at least. Paperless offices were predicted long ago, but we’re killing more trees than ever with legal documents. EchoSign’s goal is to make electronic signatures the standard way for people to sign documents and automate contracting, said Jason Lemkin, CEO of EchoSign. The goal is to reduce the time and cost of having documents signed, accelerate sales cyles, improve tracking, and centralized the management of signed agreements.

Adobe will integrate EchoSign’s solution with Adobe’s document services including SendNow for managed file transfer, FormsCentral for form creation, and CreatePDF for online PDF creation. EchoSign has more than 30,000 customers and 2.5 million users. The company says it takes an average of 42 minutes to get a signature through its process, in contrast to a much longer time for paper documents. About $500 million in contracts are signed each month and 97 percent of its customers recommend it.

With EchoSign, a user sends the document for signature using EchoSign. The receiving part can sign it electronically, or do it via print and fax. Everyone receives a signed copy and then EchoSign handles the filing.

The just-concluded Health 2.0 Conference in San Diego showcased some 30-odd startups and Web sites — with dozens more in the audience — all intent on using the Internet to improve patient care, streamline healthcare practices and bolster the ability of individuals to take charge of their own medical treatment. There’s lots more to say, and I hope to do so over the next few days.

For now, though, I want to highlight six startups with some big, and very different, ideas for reinventing the doctor-patient relationship — everything from making it deeper and more convenient to practically doing away with it altogether.

Visualize your medical records, keep your doctor on call

In their current form, even electronic medical records have a significant drawback: Most amount to little more than a digital representation of the paper forms that preceded them and consist largely of dense lines of biographical, family and medical information. (This is, of course, a fine place to start given that only 14 percent of all U.S. physicians use such systems in the first place, but it’s not exactly the end of the story.)

So in the same way that Web publications have adopted designs that exploit the advantages of the new medium (which also took time — even the pioneering online magazine Slate launched with a design that quaintly displayed page numbers just like a print publication), the folks at Myca have re-envisioned the display of medical records for the digital age. Unfortunately, the company doesn’t have any screen shots of its interface on its Web site, but their conference demo was quite striking. (You can see a brief 25-second example in this video produced for the conference; forward to 1:19 to see the Myca interface.)

Calling up a patient’s record displays her major health problem — asthma, say — surrounded by floating word tags for each of her other medical conditions, each sized larger or smaller depending on its severity. Clicking into any of these conditions zooms and centers it in the display, again surrounded by word tags for various important details, each of which can be expanded in place — for instance, visual displays of the patient’s recent medical appointments for the problem, or prescription drugs she’s taking, or X-rays and other medical images immediately available for viewing.

Here are two screenshots I just grabbed from the above-linked video (click for larger versions):

“The whole point of the interface is to show you exactly what’s going on,” says Jay Parkinson, a young New York City doctor with a pioneering Internet-based practice who now serves as Myca’s chief medical officer. “It’s kind of the geek squad for medicine.” (For more about Parkinson, who grandly proclaims himself “the future” on his Web site, see this interview at the WSJ Health blog. Don’t miss the comments, where Parkinson squares off against critics of his approach.)

The visual display is part of a service Myca calls Hello Health, which it intends to roll out in May. Hello Health goes well beyond making a patient’s medical history more intuitively comprehensible — it’s essentially a support package for doctors who want to adopt Parkinson’s prepaid service model, which might entail a monthly subscription fee of $15 or so and per-visit charges for house calls and chats via email, IM or Web video. (Parkinson describes it more fully here.)

This sort of model raises any number of questions, starting with Parkinson’s own preference for treating patients under 40, who of course tend to get sick far less often than older folks. (In that WSJ item, Parkinson even says it strikes him as “somewhat sick” that some doctors find “occupational joy” in “chasing someone’s chronic disease.” I can’t help wondering how many 38- and 39-year-old patients the good doctor has, and how they’ll react when he drops them the day they turn 40).

Another big issue is whether this sort of service, which has definitely struck a chord among people disaffected with traditional medicine and insurance, amounts to a kind of “cherry picking” that might pull younger, healthier people out of insurance plans and thus drive up costs for the older, sicker folks who remain in them. But these are subjects for another day.

(UPDATE: Parkinson replies — twice! — in comments.)

Buy healthcare direct and save!

Another radical idea comes courtesy of Carol, a site that aims to be the shopping mall of medical procedures. The service, which for now is only available in the Minneapolis-St. Paul area, basically lets you compare prices for “care packages” ranging from alcohol-addiction treatment and CT scans to hernia treatment and evaluation of rectal bleeding. (Here’s a link to the complete range of offered packages, although it might not work thanks to the fact that much of the site appears to be displayed in what looks like Flash animation, oddly enough.)

On one hand, this is a welcome innovation. Medical pricing has long been a black box, as I noted here, and with more people being pushed into “consumer-directed” plans that saddle them with financial responsibility for their own care, knowing what procedures cost at various hospitals or clinics is essential information.

On the other hand, there’s something just a bit chilly about Carol’s notion of the “medical marketplace” — an approach that essentially turns doctors into hired contractors, and which also assumes that consumers already know what’s wrong with them and have only to put out a bid, metaphorically, for the best deal. Still, it’s definitely an innovative approach, although I question just how popular it will end up being, particularly for chronic conditions such as diabetes, where the doctor-patient relationship can be especially important in tailoring treatment to the individual patient.

It’s also worth noting that Carol frequently offers only one provider for many of its packages, so your ability to “shop” remains somewhat limited until the site negotiates further deals with other clinics. Still, CEO Tony Miller argues that the startup did an analysis of over one million insurance claims and concluded that fully 70 percent of them involve medical treatment that is “plannable and shoppable.”

Carol plans to expand to Seattle in the fall. The name, by the way, is a play on the conventional wisdom that most people seek healthcare advice from people they already trust — from “Carols,” that is, who know how to work the insurance system or how to find a relevant specialist.

Reach out and chat with a doc

If it takes you weeks to see your doctor and he won’t come to the phone, you might welcome the opportunity to chat with a medical professional online, or even to see if a Web-enabled doctor can diagnose your mysterious cough or nagging pain. If so, then two Health 2.0 startups have a proposition for you.

OrganizedWisdom already has an established presence in Health 2.0 with its “human-powered” medical search engine, a Mahalo-like attempt to bring expert attention to search requests. The startup essentially lets people search through precompiled “wisdom cards,” each vetted by medical experts, that list reliable resources on diseases and drugs along with recent news headlines, treatment alternatives, support groups and message boards, and research findings.

OrganizedWisdom now plans to supplement that information with a new service it calls Live Wisdom, in which anyone can chat online with a medical professional for $1.99 a minute. CEO Steve Krein demonstrated what he described as an actual chat between a patient just diagnosed with laryngeal cancer and a doctor, in which the two discussed treatment options and probable outcomes — and even the physician’s response when the patient asked, “Am I going to die?” (The cure rate for an early-stage cancer turns out to be pretty good, the doctor replied.)

Live Wisdom doesn’t aim to replace actual doctor appointments. Instead, the startup views these chats as “a dialogue about educating the consumer” in which its experts are careful not to make diagnoses or take any other action that might constitute practicing medicine (and thus potentially run afoul of state law).

Not so American Well, which is happy to bring an updated form of telemedicine into the Internet age. Patients can — eventually, at least — click through the site view profiles of physician specialists, select the one they want and then talk via chat, phone or Webcam. The company will match individuals with doctors in their state to avoid legal issues, and at the end will package up the results and doctor’s notes for transmission to the patient’s primary-care physician.

American Well hasn’t disclosed what the chats will cost, at least to the best of my knowledge. Since the doctors will be free to make diagnoses or to suggest treatment — but not to prescribe drugs – it’s possible that this sort of service could be more useful than Live Wisdom, especially if the docs are willing to probe more deeply into a patient’s problems.

At the moment, though, American Well’s Web site is one of the most annoying I’ve encountered in a while. Although it offers “Talk to a Doctor Now” as a front-page option, that link just takes you to a series of pedantic animations accompanied by an inescapable voiceover that explains the service. If there’s a real pony in there, American Well hasn’t dug it out yet.

(UPDATE: Turns out that’s because American Well mostly hasn’t bothered to explain itself very clearly. CEO Roy Schoenberg expands on the company in comments, noting that consumers will be contacting physicians through their health plan — meaning, among other things, that those without health insurance are probably out of luck. American Well doesn’t appear to have actually struck any deals with health insurers yet. Schoenberg adds that physicians will be able to prescribe medications over the Web, although somehow I doubt that freedom will extend to Schedule III narcotic painkillers.)

Minimizing drug-interaction side effects

File this one under “Services you never thought you’d need — but actually might someday.” PharmaSurveyor has built a thorough database of all the known ways different medications can foul each other up and lead to gruesome side effects, and now is set to provide it as a free service to individuals.

The company says current drug-interaction checkers miss many ways in which drug cocktails can interact, and doesn’t pull punches in making its case. CEO Erick Von Schweber excitedly told the conference that 18,000 people die each month from “adverse drug reactions” — or, as he put it, the equivalent of a major air disaster six days a week, a 9/11 scale terrorist attack, the sinking of two Titanics, three Katrina-sized hurricanes, two tornadoes and a flood. (The company’s site doesn’t give a source for its figure.) PharmaSurveyor distributed cards to the audience with photos of Heath Ledger and Anna Nicole Smith, noting that their drug regimens were supposedly free of dangerous interactions — and yet killed the celebrities anyway.

The startup soon plans to take the analysis a step further by suggesting alternative medications that might lower the risk of serious consequences. PharmaSurveyor will soon open its “regimen checker” to the public, and plans to offer the “alternative drug” analysis later this year. The service will be free for individuals and supported by advertising; PharmaSurveyor will charge companies who would like to integrate the service into their own data offerings.

Throw away those patient clipboards

We’ve previously covered Phreesia, a startup that offers doctors free tablet computers that handle patient check-in questionnaires, here. The basic idea is this: The three-pound tablets replace the dreaded clipboard full of forms, automating the process so that returning patients don’t have to fill out the same forms again and again and double-checking answers to ensure that no one has skipped important questions or given inconsistent information. The device even allows doctors to incorporate survey questions in order to get a better sense of their patient population. (It transmits the data to a server, where it can be incorporated into electronic medical-record systems or printed out.)

The catch is that the device eventually displays patients a sponsored “educational” message — one provided, of course, by drug companies eager to extend their brand awareness. Doctors can review these sponsored infomercials and reject individual “messages” if they want, although you have to wonder how many harried doctors are going to bother. (The infomercials are also supposed to be tailored to patients’ biographical data, interestingly enough.) Meanwhile, the device gives drug companies one more entree into the physician’s waiting room, just as the AMA and other authorities are starting to try — so far, without a whole lot of success — to push them out.

The Phreesia device is certainly nifty — I was able to try one out at the company’s exhibition booth, and while it was heavier than I expected, it was perfectly easy to enter my (fake) information and to flip through the medical-history questions. The sponsored page in my demo looked innocuous enough — it warned me about the dangers of high blood pressure — but of course it was sponsored by Novartis, maker of the hypertension drug Diovan, whose logo appeared twice on the lower left-hand-side of the page.

It’s a neat enough idea, but I’m still unconvinced that Phreesia’s tradeoff of digital convenience for a disguised form of pharmaceutical advertising is worth it — or that it won’t one day run afoul of gradually tightening restrictions on the promotions drug companies have long offered doctors.

Well, the WSJ says so in this somewhat breathless report that states Google will announce its long-awaited personal health-record service today.

My first thought was that the announcement was timed to get Google on the record in advance of the Health2.0 “Spring Fling” conference in San Diego next week, which will feature lots of talk about the role of the Internet in improving healthcare. Another possibility is that Google is pulling a bait-and-switch similar to that of Navigenics, which last November “announced” its personal-genomics service but held off launching it until — well, until not yet.

Yet a third possibility — and the most likely one to me — is that, as this CNET article states, Google CEO will merely “preview” Google Health at the annual meeting of the Healthcare Information and Management Systems Society, supposedly the largest healthcare IT meeting in the world. Whatever it is, don’t hold your breath; the WSJ itself states that “[i]t wasn’t clear when the Google service for creating personal health records will begin to be available for consumers to access.”

In fact, the WSJ article doesn’t actually describe Google Health in any sort of detail, and instead is largely devoted to pointing out the major challenges facing personal health records, many of which will sound familiar to regular readers here. These include:

• Limited adoption of electronic medical-record systems. Only 14 percent of U.S. medical practices even use digital records, which will complicate the process of moving medical information to the Google system.
• Incompatible electronic medical-record systems at hospitals and doctors’ offices. Because existing digital-record systems use different data formats, systems like Google’s will have to be able to import most, if not all, of them, pushing up complexity and cost.
• Privacy. Third-party systems such as Google’s aren’t regulated by federal medical-privacy laws, giving providers plenty of freedom to, for instance, sell ads tailored to your medical profile. (Google told the WSJ that “trust between Google and our users is one of the absolute cornerstones of our business.”)

Unmentioned by the WSJ is another nagging question, which is the extent to which patients can “customize” their medical profile — which, when it comes down to it, means the ability to selectively share, edit or even delete information. As I’ve noted before, such customization could undermine the usefulness of health records to doctors, while limiting peoples’ freedom to edit them makes them a whole lot less “personal.”

To be sure, a preview by Schmidt is better than what we’ve seen so far — mostly screenshots of what appear to be leaked early prototypes of the Google Health site, plus a vague announcement of a Google Health pilot project in Cleveland. In fact, the CNET piece mentioned above actually delivers some of the goods, offering a brief description (but no screenshots) of the preview.

Among the intriguing new details: The service will allow customers to “customize” their health records, although CNET doesn’t say by how much; will be integrated with Google’s maps and email applications to allow people to more easily search for doctors and save their contact information; and will allow third-party widgets that work within the platform, such as one that might alert patients through Google’s calendar when it’s time for them to take medication.

It’s tempting to conclude that this steady drip-drip-drip of information is part of a master PR plan for generating maximum enthusiasm for the Google Health service. (If so, it’s working brilliantly.) As for the launch itself, I suspect we won’t be able to miss it when it actually happens. Accept no substitutes.

UPDATE: Google Health chief Marissa Mayer makes the official announcement in this blog post. The bottom line: A launch of Google Health is likely “in coming months,” but not now. There are some nifty screenshots, though — one of which we’ve basically seen before — but I’ve reproduced them both below for reference. (Click either for larger versions.)

Now that Google has finally announced its first big health project with the Cleveland Clinic, though, it’s far from clear exactly how its platform is going to address nagging privacy issues and the fundamental question of how much control patients will have over their records. We unpack the Google Health announcement over at VentureBeat Life Sciences.

Here’s what we know about the project: The Cleveland Clinic, which already has a sophisticated electronic medical-records system serving some 100,000 patients, will allow 1,500 to 10,000 of them to sync up their records with Google’s nascent Internet-based personal-health-records system. The main goal is to allow patients to take their medical records with them wherever they go. Many of the clinic’s patients spend as many as five months of the year elsewhere, particularly in Florida and Arizona, and the clinic’s chief information officer, C. Martin Harris, is casting the initiative as a way to eliminate the need for those patients to carry paper copies of their records with them.

Here’s what we don’t know: In the release, Google’s Marissa Mayer says that “we believe patients should be able to easily access and manage their own health information,” but it isn’t really clear what “manage” means in this context. One of the primary questions hanging over the use of personal health records — a term that usually implies some degree of patient control over their record — is how useful they’ll actually be for doctors and other health professionals if patients are free to selectively share their medical information, or even edit or delete it.

In fact, it’s something of a paradox. If patients don’t have this sort of control over their records, they won’t exactly be “personal.” By contrast, if patients are able to exercise substantial discretion over how their information is shared, other doctors may not find much reason to trust them, particularly if people are taking the opportunity to hide or minimize embarrassing information. (The average episode of House can provide several examples — albeit exaggerated ones — of how even seriously ill people might choose to conceal vital information from their doctors, even to the point of actively misleading them.)

There are plenty of logistical issues to work out, too. The Cleveland Clinic may have a state-of-the-art medical-record system, but odds are good that many of the physicians these patients will see elsewhere don’t — so how will these doctors actually use this information? Sure, the patient can “empower” their doctors to view the information on the Web, and maybe that’s enough. But I wouldn’t be at all surprised to find a lot of Arizona or Florida clinicians printing out the information and stuffing it back into paper folders, which would seem to undermine the whole point of the exercise.

Finally, of course, there are privacy concerns as well, as I’ve written about previously with respect to HealthVault. Google’s system apparently won’t be regulated by the medical-privacy provisions of the federal law known as HIPAA, at least according to this AP story.

In fact, the World Privacy Forum just released a report (PDF link) on the risks to patient privacy posed by “third party” health-record systems such as those Google, Microsoft and others are working on. The Cleveland pilot project looks pretty unlikely to actually answer those sorts of nagging questions, which suggests that Google is more interested in giving its technology a workout than in grappling with how personal health records might be used — and possibly abused — in practice.

The NYT’s Steve Lohr, who’s written some in-depth pieces on the subject, has more in this blog entry.

• PEAK Surgical takes in $21M for electrosurgical tools (release)
• CellGate acquired by Australian cancer biotech ProGen for $2.5M (release)
• Traversa raises $2M for RNAi-delivery technologies (release)
• RemitDATA, Web-based healthcare-service co., takes in $5.5M (bizjournals.com)
• Spinal-implant maker Archus Orthopedics gets $10M venture loan (release)
• Promedior pulls down another $5.5M for fibrotic disease (release)
• Acrongenomics takes 11 percent stake in Molecular Vision (release)
• Hepatitis drug-developer Biolex withdraws IPO (IPO Home)
• Employee drug screener eScreen gets Carlyle investment (release)
• NovaMin raises $2.5M for dental-care products (VentureWire)
• Cardious receives $1.5M for heart-valve repair (VW)
• PE-backed Spire Healthcare buys PE-backed Classic Hospitals for £145M (FT)
• Aberdare Ventures promotes two principals to partner (release)

CellGate acquired by Australian cancer biotech ProGen for $2.5M –CellGate, a Redwood City, Calif., biotech working on new cancer drugs, sold itself to ProGen, an Australian biotech also focused on cancer, for the equivalent of about $2.5 million. The release is here. Needless to say, this represents a fire sale for a biotech that seems to have run out of time.

CellGate was pursuing drugs that aimed to shut down the growth of cancer cells either by inhibiting polyamine or by “turning down” the activity of cancer-related genes. ProGen will conduct an 18-month assessment of CellGate’s first drug candidate, a polyamine inhibitor that had already completed an early stage, phase I clinical trial, before deciding upon a mid-stage, phase II program. ProGen will also evaluate a stable of CellGate’s preclinical drug candidates.

ProGen will issue shares worth $1.5 million for CellGate’s assets, and will assume net liabilities of roughly another $1 million. The sale represents a significant loss for CellGate’s investors, including Healthcare ventures and New Enterprise Associates, who as recently as 2002 put $10 million into the company in a fourth funding round. I haven’t been able to piece together how much CellGate raised over its lifetime, although it’s certainly considerably more than that $10 million.

Traversa raises $2M for RNAi-delivery technologies – Traversa Therapeutics, a La Jolla, Calif., biotech working on ways to deliver RNA-based drugs to their cellular targets, raised $2 million in a first financing round. Investors included San Diego Tech Coast Angels, Mesa Verde Venture Partners and Morningside Group.

Traversa’s work is intimately involved with RNA interference, a newly discovered technique for “silencing” disease-related genes using short strands of RNA that trigger a natural cellular mechanism for shutting down genes. Getting those short RNA molecules into cells in the first place, however, isn’t particularly easy.

Traversa claims to have solved that problem, although it doesn’t appear to be saying how. The company will license its RNA-delivery approach to drug companies, and also offers it for use as a drug-screening technology.

RemitDATA, Web-based healthcare-service co., takes in $5M – Memphis, Tenn.-based RemitDATA, a provider of Web-based healthcare-data services, raised $5 million in a new funding round.Noro-Moseley Partners and SSM Partners provided the funding.

RemitDATA offers Web-based tools for individual physician practices designed to help them track insurance and Medicare reimbursements and scan paper records into digital form. The company also makes a sales-management tool for the homecare industry.

Promedior pulls down another $5.5M for fibrotic disease – Promedior, a Malvern, Pa., biotech focused on fibrotic disease, raised an additional $5.5 million as an extension to its first funding round. Polaris Venture Partners, Morgenthaler Ventures, HealthCare Ventures and Easton Capital participated in the financing.

Fibrotic disease is a general name for conditions that entail repeated bouts of inflammation followed by scarring that, over time, can lead to organ failure. Examples include heart failure, cirrhosis and kidney failure. Promedior aims to develop drugs that can slow or reverse the scarring process, and intends to begin clinical trials of its first drug candidate this year. The company previously raised $7 million in its first funding round.

Acrongenomics takes 11 percent stake in Molecular Vision – Acrongenomics, a Swiss company that acquires and develops life-sciences technology, took a 10.5 percent stake in Molecular Vision, a developer of credit-card sized diagnostic devices. Acrongenomics had previously announced its intent to acquire Molecular Vision, so presumably this is the first step in that plan. The release is here.

Hepatitis drug-developer Biolex withdraws IPO – Biolex Therapeutics, a Pittsboro, N.C., biotech developing ways to manufacture protein drugs in an aquatic-plant system, withdrew its planned $70 million IPO. We previously covered Biolex and its IPO dreams here.

NovaMin raises $2.5M for dental-care products – NovaMin, an Alachua, Fla., company working on tooth-remineralization products, raised $2.5 million in a third round of funding and expects another $2.5 million, VentureWire reports. Intersouth Partners provided the financing.

Cardious aims at $1.5M for heart-valve repair – Cardious, a Northfield, Minn., medical-device company working on a heart-valve bypass device, is raising $1.5 million in a first funding round, VentureWire reports. The company aims to raise the funds from angel investors. Cardious is developing an aortic-valve replacement that can be put in place on a beating heart, rerouting blood flow around the damaged valve.

It’s worth noting that Marissa Mayer, who took over the Google Health project after Adam Bosworth unceremoniously decamped to launch his own health-related startup, said last October that Google Health would be coming in early 2008. So the timing is certainly about right.

As for clues — well, the login page doesn’t offer too many. The blurb to the left of the screen (see screenshot below) promises online health profiles, the ability to download medical information from doctors and hospitals, personalized health advice, some sort of physician directory, connections to “time-saving services” and a sharing system so your family and caregivers have access to your medical information.

Microsoft’s HealthVault (see our coverage here and here) promised much the same thing — minus the doctor directory and personalized advice, at least — but initially was so bogged down in heavy-handed security and user-unfriendliness that I’ve heard scarcely a word about it since. (Plus, there are those nagging privacy questions.) Scads of Health 2.0 sites also offer various pieces of what Google appears to be promising, although to the best of my knowledge, no one has really put all these features together before.

Anyway, it will be fascinating to see how Google approaches many of the same issues that have bedeviled Microsoft and the many startups trying to slice off a piece of the Health 2.0 pie. With any luck, we won’t be waiting much longer. (Hat tip to bbgm, where Deepak Singh rightly wonders what personalized health guidance and “time-saving services” might actually mean.)

See also our previous coverage of a Google Health prototype (or so I assume), also featured on Blogoscoped, here.

• TransEnterix gets $21M for minimally invasive GI surgery (release)
• Stem-cell developer Bioheart’s IPO postponed (Forbes.com)
• Medical-practice software provider AdvancedMD acquired by Francisco Partners (release)
• Peptimmune draws $8.2M for MS drug trials (release)
• Drug-delivery co. Talima Thera names Martin Babler CEO (release)
• Alimera Sciences aims for autumn IPO to fund diabetic eye-disease drug (VentureWire, sub req’d)

TransEnterix gets $21M for minimally invasive GI surgery — TransEnterix (no Web site), a Research Triangle Park, N.C., device maker developing tools for “natural orifice” gastrointestinal surgery, raised $21 million in a first funding round. Investors included SV Life Sciences, Parish Capital Advisers and Synergy Life Science Partners.

According to the Web site for Synecor, a North Carolina incubator that founded TransEnterix, the company is at work on tools and devices for minimally invasive “trans-oral” surgery using an endoscope passed through the mouth and down the esophagus. This procedure is designed to enable surgeries through the stomach wall and other unspecified “natural entry points,” potentially in a way that could supplant minimally invasive laparoscopic procedures that require entry through the abdominal wall. Patients would be consciously sedated during the procedure.

The funding will allow TransEnterix to “deliver” its first-generation tools, presumably for use in clinical trials, and to fund development of next-generation devices.

Stem-cell developer Bioheart’s IPO postponed — Bioheart, a Sunrise, Fla., developer of a stem-cell-based heart therapy, has postponed its troubled IPO. Although the company doesn’t seem to have officially yanked it yet, odds are now good that it will.

Bioheart’s woes started last October, when it abruptly slashed its offering price and fired its underwriters. The company’s IPO has lingered on life support ever since. We gave readers some good reasons to be skeptical about Bioheart — which, notably, is backed by former football great Dan Marino, among others — as long ago as last July.

Medical-practice software provider AdvancedMD acquired by Francisco Partners — AdvancedMD, a Salt Lake City provider of Web-based medical-practice management software — now there’s a mouthful — announced that it was acquired by the private-equity firm Francisco Partners. Financial terms weren’t disclosed.

AdvancedMD, founded in 1999, sells a series of Web-based products designed to handle administration, billing and electronic medical records for physicians. The company had previously raised venture funding from Dominion Ventures, Windward Ventures and Hunter Capital. Francisco has already named a new CEO, and said that it intends to “leverage” the company’s success with “additional resources” to accelerate its growth.

Peptimmune draws $8.2M for MS drug trials — Cambridge, Mass.-based Peptimmune, a biotech at work on drugs for autoimmune and metabolic conditions, raised $8.2 million in the first stage of its fourth funding round. The company anticipates closing a second tranche in the second quarter. Investors included New Enterprise Associates, MPM Capital, Hunt Ventures, Boston Medical Investors and Silicon Valley Bank Capital.

Peptimmune is focused on using protein fragments known as peptides to disrupt or otherwise modulate immune-system reactions associated with disease. Its lead candidate, PI-2301, is a “random sequence” peptide similar in certain respects to the approved drug Copaxone, which Peptimmune is currently testing against multiple sclerosis in early-stage human tests.

Alimera Sciences aims for autumn IPO to fund diabetic eye-disease drug — Alimera Sciences, an Alpharetta, Ga., biotech focused on eye disease, is contemplating an IPO this fall, VentureWire reports (subscription required). The funds will ideally support the launch of the company’s first innovative product, a treatment for a blinding complication of diabetes known as diabetic macular edema.

Alimera, which started life as a specialty pharma that resold over-the-counter eye products, began development of its current candidate, Medidur, in 2005. The treatment, co-developed with the nanotech company pSvidia, is a tiny structure designed to be injected into the back of the eye, where it steadily emits a corticosteroid called fluocinolone acetonide. The idea is to provide the smallest possible quantity of the steroid directly to the back of the eye, where a fluid buildup in the retina steadily obscures vision. Many ophthalmologists currently treat the condition with steroid injections, although no drugs are approved for the disease.

Medidur is currently in late-stage, phase III human tests. Alimera expects data from that trial in late 2009 and could file for approval in 2010.

• PowerVision pulls in $20M for intraocular lenses (VentureWire)
• Heart device maker Mitralign raises $24M (release)
• LifeOnKey, electronic medical-record IT firm, draws $5M of $10M round (Globes)
• Merrion Pharma withdraws IPO filing (Edgar)
• Hi-Tech Pharmacal acquires Midlothian Labs for $5M (release)
• Anti-infective developer Calixa receives $15M (VW)

PowerVision pulls in $20M for intraocular lenses — Belmont, Calif.-based PowerVision, a device company developing implantable intraocular lenses, raised $20 million in a second funding round, VentureWire reports. Investors included Advanced Technology Ventures, Frazier Healthcare Ventures and J.P. Morgan Partners.

Although PowerVision’s Web site seems to be offline, the VW report says the company is working on fluid-controlled lenses designed to treat presbyopia, an age-related far-sightedness in which the eye loses its ability to focus on nearby objects. The PowerVision lenses apparently respond to natural muscular forces in the eye, which presumably squish around liquid in the lens to alter its shape and thereby change focus.

The new funding should carry PowerVision a third of the way through its clinical trials, which it expects to begin in late 2008 or early 2009. The company previously raised $9 million in late 2004.

Heart device maker Mitralign raises $24M — Mitralign, a Tewksbury, Mass., developer of minimally invasive methods for repairing the heart’s mitral valve, raised $24 million in a third funding round. Investors included Medtronic, Johnson and Johnson Development Corp., Oakwood Medical, Palisades Capital, Accelerated Technology Partners, Forbion, Giza, Oxford Biosciences and Triathlon Medical Venture Partners.

Mitralign is yet another device startup hoping to treat heart failure by repairing the mitral valve, which regulates the flow of blood through the heart’s left chambers. The company doesn’t seem to have divulged much about its particular technological approach yet, but we previously covered two other startups with similar aims, eValve and Cardiosolutions, here and here.

LifeOnKey, electronic medical-record IT firm, draws $5M of $10M round — LifeOnKey, a Baltimore, Md., startup offering technology to support electronic medical records, raised $5 million as part of an expected $10 million financing round. Medica Venture Partners provided the funding.

Formerly known as Global Medical Networks, LifeOnKey offers individual patients an electronic medical record that integrates their health information and access it via the Internet or mobile devices such as cellphones. The company claims to have a million subscribers in Israel and Europe, and plans to quintuple that number in 2008.

Unlike Microsoft’s HealthVault, which we reviewed here and here, LifeOnKey charges individuals to store their medical info. A basic plan starts at $50 a year, plus a $5 registration fee and another one-time $20 fee to activate a USB key-based security system. Premium plans that regularly collect, scan and incorporate paper-based medical info, among other things, cost an unspecified additional amount.

I haven’t had a chance to see what the service itself looks like, but I hope to take a closer look before long. In the meantime, there’s another major difference with the similar Microsoft service — LifeOnKey pledges to adhere to the privacy protections laid out by the federal healthcare law known as HIPAA.

Warning: Some of what follows is a bit convoluted — business disputes are rarely cut-and-dried, particularly once lawyers get involved. But it’s an interesting and important story, not least because the electronic medical-records system at the heart of the controversy, known as VistA, could offer one way out of the economic and technological morass into which the U.S. healthcare system continues to sink.

Medsphere is best-known as one of the early open-source developers of VistA, an electronic health-record system originally produced by the Veterans Administration. VistA has virtually nothing in common with the “personal health records” touted by the likes of Microsoft and Google these days (see my reviews here and here), which allow individuals to add — and presumably delete or change — medical info in a digitized health record. VistA, by contrast, is an electronic records system intended for use in hospitals and clinics that integrates and systematizes medical care, reducing physician errors and forcing specialists to coordinate their care. VistA is often cited as a major reason quality of medical care and patient satisfaction have soared at the VA in recent years (see, for instance, here.) The public-domain VistA is also in use at several other state and federal agencies and overseas.

Early on, Medsphere was committed to open-source development of VistA. Eventually, however, the company released a version of VistA under a proprietary license and last year sued the brothers who co-founded the company, Scott and Steve Shreeve, for “misappropriation of trade secrets” and other alleged violations after they posted VistA code to sourceforge.net, an open-source repository. The action outraged the open-source community; see, for instance, this impassioned retelling of Medsphere’s open-source history. Near as I can tell, the company has never officially explained itself; the closest I’ve seen it come was this “open letter” to employees, which of course is filled with classic corporate doublespeak.

The new CEO, Michael Doyle, could presumably seize the opportunity to restore Medsphere’s relationship with the open-source community and move ahead with plans to make VistA more commercially attractive by, for instance, adding a medical-billing module (something the VA never needed). Doyle, in fact, most recently served as CEO of Advantedge Healthcare Solutions, a producer of medical-billing software. (Kenneth Kizer, the former Medsphere CEO who filed the lawsuit against the Shreeves, will remain chairman of the company.)

So far, Doyle seems to be making encouraging noises in this respect. In an interview with LinuxMedNews on Monday, Doyle sang the praises of open-source development, although he continued to suggest that the company might still adopt a “hybrid” open-source model of some sort. Doyle also said he doesn’t plan to be involved in the lawsuit against the Shreeves and hopes “that it gets settled soon.”

Other commenters around the blogosphere (for instance, ZDNet’s Dana Blankenhorn and C/Net’s Matt Asay) have taken these developments as a sign that Medsphere is looking to put its troubles behind it. That seems a little premature to me, but there’s no reason not to hope for the best. Given that the cost and inflexibility of electronic-record systems still present major obstacles to their widespread adoption, a robust, open-source VistA that meets the needs of commercial healthcare institutions and physician practices could be a big step forward in improving the quality and cost-effectiveness of the healthcare system as a whole.

Microsoft clearly has grand plans for HealthVault, the main page of which you can see by clicking the thumbnail at left. Not only has it beaten rival Google to market with its offering (see our previous coverage here and here), it has lined up partners ranging from the American Heart Association to the Mayo Clinic and several other hospitals to a number of online health sites that have all agreed to support the Microsoft service and to make it easy to transfer at least some medical data into patients’ HealthVault account.

This is a fine idea, so far as it goes — which, so far, unfortunately isn’t very far. While all this will undoubtedly evolve over time, for now what’s most surprising about the HealthVault service is how little there is there. What is there is a real mess — a disjointed, confusing service that for now is mostly likely of limited use to the vast majority of patients. (For a screen shot of a classically incomprehensible page, click on the thumbnail at left.) And that’s setting aside perennial questions such as privacy and security, which are obviously going to loom large for many people.

Taking HealthVault at face value, there are two basic problems — one implementational, the other conceptual. The implementation issues are most obvious, starting with the fact that once you finally sign up for a HealthVault account, there simply isn’t much you can do with it at this point. You can add personal details to your profile and upload documents — what sort of documents isn’t at all clear, although there’s an intimidating “code of conduct” to read before you do anything — and set who you’d like to share your information with (presumably family and your doctor or doctors). Beyond that, the only clear suggestion your HealthVault account itself makes is to sign up for a service offered by MaxEmail that will let your doctor fax information directly into your HealthVault account, at a cost of $9/year for up to 100 pages.

There’s no sign, however, of Microsoft’s much-touted partners until you leave your account and return to the public HealthVault page, where you can visit just over a half-dozen sites that can transfer medical information such as blood pressure, blood-glucose values and the like to your personal HealthVault record. (Of course, you have to log in to HealthVault again each time you visit one of these sites.) The one I checked out in detail, the AHA’s Blood-Pressure Management Center, is every bit as confusing as HealthVault itself, since after you enter your profile — again — there’s very little indication as to how you’re supposed to get the data or where it’s going to go.

These are early days, of course, and over time I assume Microsoft and its partners will iron out a lot of these implementation issues — although my quick once-over of the service suggests that this territory is probably trickier to navigate than many people might have previously assumed. (This might also be one reason Google’s health guru, Adam Bosworth, bailed from the company a few weeks ago under less-than-clear circumstances. For an interesting, albeit conspiracy-tinged, take on that, see here.) Putting together an entire infrastructure that supports personal health records is a staggering undertaking — one that might well be beyond the resources of even a company as large as Microsoft.

All of which also leads us straight into the major conceptual question here, which is exactly what good a personal medical record is actually going to be. Ultimately, of course, the vision is for individuals to control every detail of their medical history at their fingertips so they can share it with any doctor or health organization they choose. Setting aside the enormous question of what it takes to get there from here, the big issue this vision raises is whether giving individuals “control” over their records — which is really shorthand for the ability to add, delete or change information — might undermine their usefulness in a significant way. In other words, there’s a downside to the electronic medical-records issue that, so far, virtually no one outside a small coterie of academics has even really begun to address.

I can’t claim to have delved deeply into the subject myself, but I was first tipped to the issue by Graham Walker, a third-year Stanford medical student who blogs at Over My Med Body!. Nearly two months ago, Walker wrote an impassioned post arguing that patients shouldn’t have the ability to cherry-pick and edit their own records if the resulting information is to be at all useful to doctors.

Walker offers several examples that gave me pause. For instance, what about patients who delete or restrict access to their sexually-transmitted disease status? Or those who simply don’t update their records very often? Are patient-controlled records intended to supplement or supplant those maintained by medical institutions? Of course, his questions originate from a doctor-centered perspective, but it’s still one worth pondering as the likes of Microsoft, Google and their ilk start us hurtling down the path to patient-centered medical records.

Athenahealth’s systems work as Web-based services, a strategy designed to take advantage of the Internet’s flexibility and to make it easier for doctors to digitize their practices without making a huge amount of up-front investment. That said, Athenahealth’s business is still a fledgling one; last year, it lost $9.2 million on revenues of $70.7 million.