Executive Q&A: Vern Davenport
With technology becoming more important in the medical transcription industry, MedQuist Holdings recently tapped Vern Davenport as chairman and chief executive officer. Davenport’s expertise is linked hand-in-glove with his 28 years in the health information technology field.
Franklin-based MedQuist took a big step earlier this month by saying it would acquire M*Modal of Pittsburgh for its speech-recognition technology. The idea is to help doctors and other health-care providers convert the spoken word into meaningful clinical information as patients receive care.
Industry analyst John Bright of Avondale Partners in Nashville said recently he sees top companies like MedQuist beefing up their technology offerings to control costs in the medical information sector. “If you can do it through technology versus manually, you can recognize significant cost savings,” Bright pointed out.
Davenport, 53, sees opportunities to leverage M*Modal’s innovative speech-recognition work to make MedQuist an even stronger industry player. He is also currently overseeing a rebranding as well, which could lead to a new name and corporate identity for his company.
Davenport spoke with Tennessean reporter Getahn Ward about changes in the medical transcription industry and MedQuist’s plans to capitalize on the national push to adopt electronic health records. Davenport also sees a continued trend toward using offshore labor in his industry, particularly in India, where MedQuist has a large operation.
How did you get into health-care IT?
After MBA school, I went to work for IBM, and as a result of the territory I (worked), I had some early success as a salesman with IBM (customers) in health care. It just created a personal affinity to the industry.
What do MedQuist’s pending acquisition of M*Modal and a few other deals say about your industry?
There’s a transcription marketplace that is maturing and will go through consolidation, and we certainly will continue to be a participant in that. There’s also a dimension of enhancing that service relationship with technology to aid productivity, physician adoption and things of that nature. That’s what the M*Modal merger is all about. It takes a base of customers, which is what MedQuist has, and technology and innovation for which M*Modal is known, and it leverages both of those assets (in ways) … to really help address quality and costs.
How much was the planned M*Modal acquisition a factor in your recruitment to come here?
If you look at my career, I’ve had the opportunity to take similar situations, which were market-share leaders in maturing marketplaces and shift them to the next growth opportunity. I did that with a company called Misys that merged with a company called Allscripts that has created the (current) market leader in clinical information sytems. I see a similar opportunity here for the MedQuist customer base – strong relationships, trusted relationships, adding now a significant technology component to that and shifting our value as a company more upstream to delivery systems and to physicians in the area of clinical information, clinical knowledge. So, the idea here is to make an impact on an industry that absolutely needs to accelerate its adoption of technology, enhance physicians’ productivity … and give physicians the best information possible to make decisions.
Do you see MedQuist going in the direction of being more of a technology or more of a service company?
The right articulation of that is evolving into a solutions company where we provide world-class services, best-in-class technology, and we do that with world-class processes and the best possible people that we can recruit.
It’s not just a services company. It won’t be just a technology company. It’s going to be all of those things as we try to make “collaborative intelligence” real.
How does MedQuist plan to use M*Modal’s technology going forward?
Instead of working together as two different companies, there’s significant value of working intimately together as one company. M*Modal has a lot of innovative ideas, developmental agendas; and with the merger of MedQuist, we hope that now we can accelerate the roadmaps they had in place and accelerate those innovations.
What advantages does MedQuist see in moving its headquarters from New Jersey to Cool Springs, where you earlier had acquired Spheris (another medical documentation company) and have several big clients?
There are less than a handful of towns in America where you’d want to be located if you were a health-care company, and Nashville is certainly near the top of that list. This is a delivery-system town. And you want to be close to where the decision-makers are. We have about 120 employees here. I don’t see challenges in recruiting top talent here in any shape, form or fashion – the cost of living, lifestyle and the significance of the health-care presence in Nashville are all major attributes.
What’s the biggest challenge you face moving forward?
There’s a lot of work to do. The idea here is to build a new company out of the strengths of all our companies (MedQuist, CBaySystems, Spheris). When we get the M*Modal transaction closed, we plan to launch a new brand, and my challenge is to create the strategy and put the right processes in place. Changing the name (of the company) is certainly on the table – at some point after closing.
This deal with M*Modal is a strategic fit. It’s not a roll-up deal, it’s a strategic merger. The synergies are either realized or in the process of being realized. My objective is to create a singular company out of what was arguably … four different companies (MedQuist, CBaySystems, Spheris and now M*Modal). It’s going to be one company.
Where do you see growth coming from as the industry and your business expand?
I see three major categories where we’re going to focus. First is physicians and what we can do to help physicians successfully adopt electronic health records (and) be more productive in their use of technology. The second area is just our core business about the workflow – and capturing the (medical) narrative, the editing, the coding, the billing, all of the core processes of a physician’s practice.
The third major category is what I’d consider the back-end. Once we have captured all of this medical information, how can we – through analytics, natural language understanding, and through our capabilities – produce more information, more intelligence to enable caregivers and physicians and delivery systems to make better, cost-effective clinical decisions? Those are the three broad categories where we can add value.
How much of your transcription business gets sent overseas and how much is handled domestically?
We’re about half and half as to where we provide our service – onshore, offshore if you will. We seem to have a very good balance.
We have 28 sites in (India). We’ve been at it a very long time. We seem to have very good retention of our employees. We’ve got very good standardized processes in place, and more importantly, we have great audit control over the results we produce.
What’s the level of quality with the work sent overseas vs. work done here?Are there any barriers in terms of language?
There’s no difference between the two. It’s just a matter of we get more cost-benfit out of the labor pool in India. But we deliver the same quality of outcomes.
I expect to continue to see the trend increasing with offshore over onshore. What clients want today is the most cost-effective solution they can get, the highest quality they can get, and we present that solution to them. They have the option. We certainly are in a global marketplace.
One of the most successful characteristics of this company is knowing how to leverage global resources for the benefit of customers, our shareholders and employees.
What is the future of voice recognition; is it becoming the standard way of producing clinical documentation?
It will become more critical going forward because I feel like speech is that user interface that physicians and clinicians are comfortable with. And if we can get the technology to a point where they can really leverage speech as their user interface to work with the technology, we’re really onto something.
That is a critical enabler (to help) physicians successfully take advantage of electronic health records and other technologies.
How is the shift toward wider use of voice recognition affecting hiring trends and wages in your industry? Are wages being compressed?
First of all, we’re enabling transcriptionists to be more productive with this technology. There’s speech-enabled editing and things of that nature that are enabling transcriptionists to be more productive and also to check the accuracy of their work or aid in coding for reimbursement purposes.
Of course, the industry has been under price pressure, and when (that occurs), those who are providing the services come under wage pressure. That’s a natural element at the moment.