Medical Business Systems widens reach of its software |

Medical Business Systems widens reach of its software

John Seelmeyer

Dr. Michael Kos acknowledges that his Medical Business Systems has been a

one-trick pony.

But the pony is getting a lot bigger, and the forthcoming introduction of

new products by the Reno-based software company will be creating a two- or

three-trick pony in coming months.

Launched in 2003 to develop billing software for radiation oncologists – the specialty in which Kos practices – Medical Business Systems this month

launched a major upgrade that extends the reach of the billing software to

all medical specialties.

That opens a potential market of some 300,000 practices nationwide, says

Susan Morrison, manager of sales and marketing for Medical Business systems.

Previously, the company had focused on the much smaller market of 3,500

radiation oncology practices.

Although rising complexity of medical billing has sent many software

competitors scurrying to the sidelines during the past 10 years, Morrison

says Medical Business Systems continues to battle in a market with more than a dozen major competitors, some of them as well-heeled as General Electric or Allscripts, a Chicago company that generates more than $1 billion in annual sales.

When Medical Business Systems can get in front of billing professionals and medical-office managers to demonstrate its software, Morrison says it closes sales more than half the time.

The challenge: Getting in front of them.

In a competitive environment filled with dry-as-dust medical journal

articles and text-heavy advertisements, Medical Business Systems(1) marketing materials star the cartoon dog Ernie < a figure based around a former pet of Dr. Kos – who uses the company(1)s Iridium Suite to save medical offices from threats such as next year(1)s advent of ICD-10, a new system to classifydiseases at a very specific level.

The company relies heavily on Internet marketing and Web-based

demonstrations to generate sales leads, although it has launched outbound

telemarketing as well, Morrison says.

With the expanded market for its keystone product and the introduction of

additional software in coming months, Dr. Kos expects Medical Business

System to become profitable for the first time in its 10-year history.

But profits didn(1)t drive the company in the first place.

Instead, Kos was looking for billing software that would fit the needs of

his own practice. Unable to find anything he liked, the physician who(1)d

spent his teen years programming video games on a Commodore PET computer

began developing his own billing software.

Veteran software architect Ryan Wexler now serves as the company(1)s chief

software architect, and he(1)s part of a 10-employee team that includes six

full-time staff members in the Reno-Tahoe region.

The company invested about $1.6 million in development of its initial

product, paying for many services with company equity and occasionally

drawing cash from Kos(1) personal resources.

While the company(1)s intent for the better part of its existence has been

creation of medical-billing software for a wide range of medical

specialties, Kos says work to perfect the original version consumed months

and years.

“I have been more interested in building a great product than selling a

product I(1)m not proud of,” he says.

Licensed through software-as-a-service agreements, the company(1)s Iridium

Suite these days is a highly automated service that doesn(1)t require users(1)

involvement whenever insurance companies or regulators change billing


And Morrison says users also like the self-contained software of Iridium

Suite. They don(1)t need to bundle data and ship it outside the system, a

common requirement in competitive software.

The company(1)s growth in Reno, Kos says, has been heavily dependent on its

ability to recruit skilled programmers from the University of Nevada, Reno.


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