(Updated with comments from HealthBeat.)

SAN FRANCISCO – Reputation.com founder Owen Tripp is not the kind of entrepreneur who wants to solve small problems. For his new venture, Tripp tells me he has an ambitious solution that will someday “fix health care.”

Tripp’s startup, ConsultingMD, has secured a $10 million funding round led by venture firm Venrock, the health-focused venture capital arm of the Rockefeller family. The mission is to create a virtual clinic where patients are served by the top doctors in the world.

ConsultingMD founder Owen Tripp

“We don’t believe you need a network of thirty thousand doctors to be effective,” said Tripp [pictured above with cofounder Dr. Lawrence "Rusty" Hoffman] in an interview with VentureBeat. “We would rather use the same 750 doctors who achieve successful outcomes again and again.”

Tripp unveiled the funding as well as ConsultingMD’s first product on stage at VentureBeat’s HealthBeat conference today.

“There is a ton of friction between the top experts and the patients who most need them,” Tripp said during an onstage conversation with Bryan Roberts, a partner at venture capital firm Venrock. “We take away all the friction.”

ConsultingMD offers patients the opportunity to consult a leading medical expert for a second opinion — and receive a detailed response in about 48 hours.

Patients are asked to submit some brief details about their case, and sign a release. ConsultingMD’s team will begin assembling a file with a full medical record, demographic information, relevant images, tests, and so on, and select a specialist from the network to take a closer look. ConsultingMD even does optical character recognition and handwriting recognition on the printed files to make them searchable.

The technology is HIPPA-compliant and cloud-based, so doctors can safely review a case in any location, given them what Tripp calls a “virtual clinic” on their iPads. The goal is to make the process user-friendly and efficient for doctors as well as patients.

“Great doctors want to do great medicine, and they’re handcuffed by the technology they have to use,” Tripp said.

Specialists like Dr. Berchuck, director of Gynecologic Cancer Research at Duke University, are already signed up. ConsultingMD offers top doctors the opportunity to review a higher volume of medical cases.

Even in its trial period, physicians were able to access and share opinions on rare cases they might not otherwise have been exposed to. Another draw is the boost in income for top-notch physicians.”As our brand grows, so too will the celebrity of our doctors,” said Tripp.

For patients, it means avoiding flying halfway across the country, or paying exorbitant medical fees for an in-person visit.

ConsultingMD won’t accept just any doctor to its network. “We never went out and perused the phone book for doctors,” Tripp explained. “We made invitations based on recommendations and are getting more in-bound requests each week than we can handle.”

This exclusivity makes sense in light of the business model. Tripp expects the richest and biggest companies like Pepsi and Home Depot to pay for its employees to access ConsultingMD. Large enterprises pay $6 per employee each month; some cases may be covered by insurance. Individuals can also pay for a second opinion – the average cost is $3,750.

“I am a little allergic to the term ‘corporate wellness,” he explains. “I think wellness is something we ought to do as a country.”

But corporations are increasingly offering top-quality and concierge health care to retain employees. An Adecco SA study stipulated that 55 percent of corporate execs view health care benefits as their biggest challenge.

In an interview, Tripp revealed plans for a second product, an online service that helps patients locate and schedule a visit to the top specialist in their area.

“ConsultingMD has decentralized this medical expertise and improves the lives and health of people through technology,” said Roberts, who will join the company’s board.

So you’ve developed a cloud-based electronic health record (EHR) or medical device that will drastically change the way we deliver health care.

Just a few years ago, you may have faced a prolonged struggle to gain investment. Practice Fusion CEO Ryan Howard, CEO of Practice Fusion, one of the more dynamic new EHR companies, recalls having to use the cash from a motorcycle accident to pay the salaries of key employees. But by 2009 when the Obama administration calling for doctors to shift to electronic health records, investors saw opportunity.

Today, investors are rushing to invest in digital health.  This will be a “record year” for investment in the health care, Rock Health recently predicted. The research shows an uptick in deals in the first quarter of the year and an increase in venture capital.

But will the elite venture capital firms open their check books for you? With our inaugural health conference HealthBeat coming up next Monday and Tuesday (it’s almost sold out, but you may be able to get a ticket still if you move fast), I caught up with Sequoia Capital‘s Warren Hogarth, and Morgenthaler Ventures‘ Missy Krasner to dig deeper into their digital health investment thesis.

VentureBeat: What’s the primary area of health that you’re currently interested in? What’s the future?

Warren Hogarth: One of the key areas is bioinformatics. It’s everything that is enabled by cheap genome sequencing. We’ve made about a half dozen investments to date in the U.S. and Asia. We have also taken a keen interest in the consumer side and health IT. These new technologies will play a role in engaging people in their health in a complete way.

Morgenthaler’s executive in residence, Missy Krasner.

Missy Krasner: A sister theme would be “big data” analytics and business intelligence in health care. There is a tremendous amount of interest in sucking data out of health records and mining data from clinical performance.

Hogarth: We’re talking now about the microbiome, not just the genome. We’re understanding that the microbiome interplays with our health, and we’re seeing a new opportunity for non-invasive treatment and testing.

VentureBeat: Have you addressed the ethical concerns around mining data about the human body?

Hogarth: Patients will have choice and control when it comes to their data. Hopefully, we’ll overcome some of the concerns about the broad misuse of data. The trick is to do it in a de-identified way with a clear process.

Krasner: And in 2014, medical underwriting will be banned so patients won’t be rated based on preexisting conditions. [Medical underwriting is already prohibited for children. -Ed.]

VentureBeat: Are you buying into this “quantified self” trend? Is it empowering for patients to have access to all this data about their health?

Hogarth: I think it’s empowering. I just had my genome sequenced, and my doctor was able to use that information to make a decision regarding my health. Companies like Jawbone are taking reams of data and surfacing it to a physician in a meaningful way.

Krasner: I spent five years at Google Health trying to get patients to engage. We tracked some of the early adopters of Basis, BodyMedia (recently acquired by Jawbone), and other great activity trackers. But there are a couple things that still need to happen. The data that is collected needs to actually be put into nuggets that are actionable. We need to take this data and figure out how to use smart algorithms to provide usable clinical insights. Otherwise we’ll get alert fatigue.

Hogarth: We need to go beyond the “chronically worried well.” We need to make an impact on people who are obese.

Krasner: I did some interesting research by signing up for Weight Watchers. I went to the meetings and subscribed to the mobile product, the device that helps you count activity. It’s a great program but we are still in the stage where patients have to record what they’re eating and put manual data into the app. The next piece of technology will automatically know my patterns. We’ll see a fantastic amount of adoption.

[Editor's note: Krasner will moderate a panel at HealthBeat on the "death" of the personal health record (PHR). That's different from the Electronic Health Record (EHR), which is alive and well and seeing serious innovation. Also at HealthBeat, we'll have executives of the major disruptor EHR companies speaking, from Practice Fusion's Ryan Howard, to the leaders of CareCloud and AthenaHealth).

VentureBeat: Are there areas that you wouldn't invest in?

Hogarth: We don't invest in drug discovery or medical devices that are pre-FDA approval. [Venture capitalists say it's a nuclear winter for medical devices. Read more on that here. -Ed.] It’s too risky, and there is a lack of control. When it comes to devices, I would love to see a culture where things happen in a timely manner.

VentureBeat: What’s the one big health care transformation that you’re most excited about?

Krasner: The one area we haven’t talked about is the new insurance models for health. Patients are being asked to pay more out of pocket than ever before. That whole wave is forcing people to think much harder about where they go. There is no transparency around quality and price. There is a big opportunity here.

Hogarth: We will see a big transformation with employee sponsored healthcare — we’ll see businesses not offering insurance. You’ll shop and make a decision about health care based on price. We’re looking hard at startups that consumerize this experience.

Meet and mingle with health investors at HealthBeat, VentureBeat’s conference in San Francisco on May 20 and 21. Partners from Sequoia Capital, Bessemer Venture Partners, Norwest Venture partners, and Kleiner Perkins Caufield Beyers will speak on a panel “Health IT: The Numbers, The Funding, The Exits,” about the drivers making this industry segment more appealing to investors. 

photo credit: Emmanuel Gadenne via photopin cc

Started a health-tech company? Apply for the Innovation Showdown at HealthBeat 2013 in San Francisco by April 19.

Facebook and Twitter are not the appropriate venues to share that your back is feeling achy or that your bowel is acting up.

Launching today, HealthKeep is a place for people to post about their everyday aches and pains and ask the community about potential symptom relievers. Unlike Facebook, it’s completely anonymous (rightfully so), so you won’t need to hide the gory or embarrassing details.

“People love to share about their health, but because of privacy issues, they shouldn’t use Facebook,” said founder Lyle Dennis (pictured, above) by phone. Sign up for a profile, and you’ll be asked about previous surgeries and procedures, as well as your date of birth, but your name will never be requested.

The site was founded by Dennis, a physician, a neurologist and self-described technofuturist. Dennis has been developing the site with a technical cofounder for over three years, so its database is fairly extensive: The site has profiles for every practicing physician in the country, which those physicians can “claim.”

Once a physician claims their profile, they can use the site to interact with patients and share resources, including medical discoveries and relevant articles. HealthKeep plugs into about 50 mainstream news sources, so it’s easy to share information.

For patients, it’s a means to interact with a community with similar health issues and keep a record of symptoms. If you post that you’ve developed a rash, this will remain on your “health timeline” and might be useful for your primary care physician to track.

HealthKeep’s user community is still small, as the founders haven’t done much marketing, but the company hopes to eventually compete with WebMD or HealthTap, which offers tips and advice from physicians.

I ask Dennis whether he envisions the site being used by hypochondriac types who obsessively monitor their health. “The majority of people assume they have cancer, no matter what the symptoms are,” he observed. “The site might help to allay these fears.”

In the future, Dennis plans to make money through targeted advertising. The site is a self-funded effort, and he hopes to close a seed round of venture or angel financing in the coming months.

Would you use something like this to share information about your health? Leave your feedback in the comments section below. 

This is the latest in a series of stories about startup culture. This week, our reporter checked out Practice Fusion in San Francisco, a stark contrast to Twilio’s fast-paced work ethic, and Couchsurfing’s laid-back hippie culture.

If CEO Ryan Howard hadn’t been involved a serious motorcycle accident, Practice Fusion would have crashed and burned years ago.

Howard was knocking on investors’ doors to fund his free electronic health record (EHR) with little success. Doctors were reluctant to ditch paper-based systems, so it seemed to the VC crowd like the right idea at the wrong time.

But unwilling to admit defeat, he used cash from the settlement from his motorcycle accident to pay the salaries of three employees.

“We were going out of business, I needed two root canals, and I was in massive debt,” said Howard in an interview at the company’s sprawling San Francisco office. “I would define the period of 2005 to 2007 as me, in my pajamas, furiously working in my house.”

In 2009, Congress passed the Health Information Technology for Economic and Clinical Health Act. With the Obama administration committed to the proliferation of EHR’s, Practice Fusion caught the attention of a band of angels, including investor Peter Thiel, the managing partner of Founders Fund. Thiel recently declared: “Practice Fusion revolutionizes our interactions with the medical community, just as Facebook did for social networking.”

Thiel saw an opportunity to take advantage of a government mandate that push doctors to adopt an EHR. The fixed deadline is 2015 — after that, eligible health care providers who don’t comply will be penalized by CMS, the federal agency that administers Medicare and Medicaid.

With eligible doctors and hospitals receiving “meaningful use” checks for switching over to Practice Fusion’s free EMR,  it’s not a tough sell. Albert Santalo, the CEO of cloud-based EHR provider CareCloud, is a competitor but credited Practice Fusion for its “evangelist efforts” and creating ”greater awareness of EHR technology by doctors in general.”

With new investment, Practice Fusion stacked up its sales team, and grew 500 percent for two years in a row. Last year, according to Howard, it turned over “serious solid revenue,” primarily through advertising. It recently had to revise its expectations for 2013, as a few weeks into the new year, the sales team secured its first million dollar advertising deal with a major pharmaceutical company.

Practice Fusion has about 150,000 users, including doctors, nurses and hospital admin, which is about six percent of the addressable market. Howard sees an opportunity to make money through the fast-growing store of data. Stripped of any personally identifiable markers, patient information can be sold to pharmaceutical companies.

He responds to a question about potential privacy concerns by listing the positive outcomes from mining data about doctors and patients. “We can recommend drug therapies based on their popularity [with previous patients],” he said, and claims there are 200,000 avoidable deaths a year because “data is simply not shared.”

This is in sharp contrast to online health portal WebMD, which is struggling to conserve its relationships with big pharma and recently laid off 14 percent of its staff. In its seven years, Practice Fusion has grown to over 250 employees, and has about 20 job openings.

What’s the culture like?

Employees at Practice Fusion’s office in downtown San Francisco are reminded every day about the sheer fluke that led to the startup’s existence.

“A great leader has to be vulnerable,” Howard explained. Photographs and news clippings from Practice Fusion’s past adorn the walls. I even saw a fading Starbucks napkin, a souvenir from the founding team’s first “office.”

The well-funded startup is in full hiring mode, but it’s looking for a specific type of employee to add to its team.

It may seem counter-intuitive, but the ideal job candidate, according to Howard, has little or no health care experience. In his view, employees that have worked in the industry for too long as less inclined to dream up big ideas, and the “unlearning” process takes too long.

Practice Fusion is looking for high-achievers, but it’s important to Howard that employees are “happy and healthy,” and fit in with the culture. During a walk through the company’s offices (his dog trailing behind), he told me about a seriously talented engineer who was recently asked to leave as he didn’t get on with the team.

New employees undergo an extensive training process, which involves several weeks of education on a range of relevant health care topics, such as meaningful use, billing, and the regulatory issues facing big pharma. Similar to larger companies like Google, Practice Fusion emphasizes professional development, and mentors assigned to junior-level employees ensure that they meet goals.

High-performing employees have the freedom to try their hand at roles in different departments — one staff member I met started out in the call center (this team cold-calls doctors to inform them about the free EMR) and later shifted into product.

Word of warning: If you love to pig out on cookies and soda, Practice Fusion is probably not for you. The kitchen is fully stocked with healthy and organic food, and it has no carbonated drinks.

“I believe you should be emotionally and physically at your best,” explained Howard, who also insisted on offering free weekly yoga and soccer classes for the staff. This focus on balance means the startup has been able to retain talent through its ups and downs.

In a recent end-of-year report from RockHealth and Interwest Partners, survey respondents predicted that Practice Fusion would be the most likely digital health company to IPO in 2013. The company raised a massive $34 million in venture funding in June.

For those that stayed loyal to the company from its early days, the bet is about to pay off.

What are the best perks?

• Healthy meals: Food is catered every day, and Practice Fusion has a fully stocked kitchen with delicious treats. From time to time, the company will invite nutritionists to meet the staff and discuss healthy eating plans. 
• Fitness opportunities: New employees receive a FitBit to help them track activity levels throughout the day. In addition, a weekly yoga class takes place in the office, and everyone may have a discounted gym membership.
• Computer science classes: Employees that want to bolster their mobile development or Excel skills can enroll for free in any of Academy X’s classes.
• Dog-friendly office: Howard is rarely seen without his trusty sidekick.
• Work/life balance: Employees receive four weeks of PTO per year, in addition to the standard vacation time.

Hiring?

• You betcha. Practice Fusion has openings in almost all its departments at a variety of levels. The fast-growing startup is currently hiring in legal, finance, operations, product design, engineering and more. 

“Startup culture” is a new series that highlights what it’s really like to work at a Bay Area startup. Please send your suggestions for the most rockin’ office spaces, startup happy hours, or company perks via email (christina@venturebeat.com) or Twitter (@chrissyfarr). 

In the first weeks of 2013, health care technology startups are already closing some major funding rounds. The latest to benefit from Sand Hill Road’s burgeoning interest in the sector is a Washington D.C. based company called Audax Health, which raised almost $21 million, according to an SEC filing.

Backed by former Apple CEO John Sculley, Audax works with insurance companies like Cigna to help consumers devise online personalized health plans. Users earn points and rewards for eating well and exercising regularly. Its flagship product is Zensey, which combines gamification tactics, social networking, and secure medical data sharing.

Grant Verstandig, CEO of Audax Health

The startup was founded in 2010 by 23-year-old college dropout Grant Verstandig. The idea came about when Verstandig, a lacrosse player and student at Brown University, experienced a succession of injuries. During his recovery, he discovered that he could find few resources online that provided an easy, personalized, and social patient experience.

Verstandig revealed in Forbes that he subsequently dropped out, moved to D.C., and pursued his dream to bring “social networking and customization to health care, in a way that protected personal privacy.”

The funding is an impressive effort from such a young founder. Eight of the companies’ heavyweight directors are named on the SEC filing, including Sculley, former National Cancer Institute Director Richard Klausner, and John Rowe of Columbia University’s Mailman School of Public Health.

The Washington Business Journal reports that this is part of a larger $45 million fundraising effort. The company raised funds in a mix of debt, options and other securities.