Rx for a growing economy

In a move that could be a harbinger of

future of economic development in the

state, Nevada Ventures, L.P. has aligned

with Sierra Angels and the University of

Nevada, Reno - through the State of

Nevada's Applied Research Initiative - to

fund the creation and establishment of

modeMD.

The Reno-based software firm hopes to

change how medical professionals collect,

share and distribute information.

The modeMD system allows physicians

and clinicians to use a personal digital

assistant to record patient diagnostic and

treatment information at the point-ofcare,

and then transmit that information

accurately, securely and instantly to their

practice office through the modeMD data

center, the company said.

The integrated service also allows a

doctor to electronically transfer key patient

information to a colleague.

The new system appears to be a step up

from the old face sheet system, where a

patient's information is recorded on a sheet

of paper. According to a report by Stanford

School of Medicine researchers, "The inefficiencies

and frustrations associated with the

use of paper-based medical records have

become increasingly clear, especially when

inadequate access to clinical information is

one of the principal barriers that clinicians

encounter when trying to increase their efficiency

in order to meet productivity goals" for

their practices.

Roy Graham, modeMD's president and

chief executive officer, said,"Government and

private research has shown that [physicians

and clinicians] are losing an average of 10 to

20 percent of their revenues due to billing

errors.Our system reduces the administrative

costs associated with paper face sheets."

This, he said, will leave medical professionals

more time to spend with patients or family.

Other errors can include miscoding drugs

or equipment and other mistakes caused by

illegibility inherent in some people's handwriting.

A 1999 study by the Institute of

Medicine found that more people in a given

year die from medical errors than from motor

vehicle accidents, breast cancer or AIDS.

ModeMD was conceived by Phil

Goodman, a UNR professor and director of

its Medical Informatics Division, who then

hired computer programmers to make it possible.

Medical informatics is the scientific

field that deals with biomedical information,

data and knowledge - their storage, retrieval

and optimal use for problem solving and

decision-making.

"We've all heard the saying, 'necessity is

the mother of invention,' and the case of

modeMD is no different," Goodman said.

"As a physician I look for ways to make more

time for my patients, to give them better service.

By replacing the paper system with an

electronic one, we can improve the flow of

communication to benefit both the patient

and the practice as a whole."

Funding for modeMD came through the

State of Nevada's Applied Research Initiative,

which uses a mix of UNR money and private

funds to stimulate research in industries that

diversify and develop its economy. UNR's

investment gives it an equity position in the

company.

"[modeMD] is an excellent example of

how the ARI can be used as a seeding fund,"

Graham said. "The purpose is to stimulate

the commercialization of research on

campus."

The ARI was established to support

research and promote economic development

and diversity in Nevada. It leverages industrial

dollars for research by matching state or

federal funds with private or commercial

ones. ARI requires at least a one-to-one

match between public and private funds, and

restricts funding to research grants and programs

that facilitate academic and industrial

relationships; particularly those that develop

the university system's technology and its

ability to realize its commercial potential.

Venture capital investment, which is often

the primary source of funding for start-ups

and small businesses with huge growth

potential, has remained relatively low in

Nevada. According to a National Venture

Capital Association report in 2000, Nevada

ranked 40th among U.S. states in venture

capital investment, allocating only 0.04 percent

of gross state product to venture capital.

But venture capitalists see that trend turning

around, noting that northern Nevada is

the perfect place for high-tech industry,

which relies heavily on venture capital for

start-up.

"Reno is particularly attractive to businesses

that work [in communications and computing

technology]," said Richard Bostdorff,

president of Tech Alliance. "The communications

and air traffic infrastructure is good

here. We now have first-class office space

available and there is a large pool of workers

in northern California that would like to live

and work here, making skills and experience

readily available."

Bob Goff, president of Nevada

Technology Council and Chairman of the

Advisory Board of UNR College of

Engineering, said that investment in programs

such as modeMD will create highvalue

jobs and economic growth in Nevada.

"Tech jobs on average pay 60 to 200 percent

higher than non-tech jobs," Goff said

"And historically, the tech industry has a

higher probability of high-value liquidity"

when consumed by IPOs or strategic

acquisition.

The first round of public trading - Series

A (preferred stock) - in modeMD concluded

Aug. 15 with future series to be introduced

early next year. The company started in

UNR's Applied Research Facility and has

since moved temporarily to the South

Meadows Parkway business center. It expects

to move into the new Tanamera complex at

the end of the year.

"I'm really impressed with all the things

that have gone on in [Reno]," Graham

added. "It just needs to market itself better."