For healthcare startup CrossChx, business isn’t about just being successful. It’s about fundamentally changing an industry. Founders Sean Lane and Brad Mascho have a billion dollar idea to own identity in healthcare. And they want to build it right here in Columbus.
The story of CrossChx starts on the east cost. Both Lane and Mascho were in the Baltimore area dabbling in a number of business ventures. Lane had built and exited one company, building and investing in others and even starting non-profit the Digital Harbor Foundation and an incubator/coworking space.
“I was thinking If I were going to start another business, who would I want to work with and Brad came to mind,” Lane says. The two had met in undergrad at Miami.
A little bit of coaxing, Mascho moved to Baltimore and it was time to figure out the next big thing. Using biometrics to better identify health system patients was floating around as a possibility, but it was when Lane was invited to help with economic development in his hometown of Gallipolis, OH that it started to become a reality.
Lane wanted to tackle one of the city’s biggest issues – prescription drug abuse. And what would become CrossChx stood out as a solution.
“There’s really no way to figure out where a patient has been across the healthcare system,” Lane says. “We realized very quickly that healthcare, in general, was really missing the identity layer.”
There was no way to identify issues like doctor shopping. An individual could go to one hospital, and that institution has no way of knowing where else that patient has been. Errors like duplicate records, misspelled names or transposed social security numbers were also creating multiple records for the same person.
Lane and Mascho built the first version of CrossChx using technology to employ identity resolution techniques to create a single identity for each patient. Gallipolis-based Holzer Healthcare System would be the first testing ground. The system was met with positive feedback from both patients and the health system.
That’s also about the time they met Mark Kvamme from Drive Capital. Still shuttling back and forth to the coast, they told Kvamme of projects in Baltimore, but the statement that they had the idea to own identity in healthcare really caught Kvamme’s attention.
“He stopped us there and said. ‘Alright, forget everything you are doing in Baltimore. Move to Columbus. We’re going to build a multi-billion dollar company,'” Lane says. “We went back to Baltimore and we thought, we can sit here in Baltimore and build nice little companies, nice $20, $30, $40 million dollar companies, or we can do something that fundamentally changes an industry forever.”
They moved to Columbus in 2012. With a $5 million investment from Drive Capital the next two years were spent building out the software technology. Up until 2014, they were still just at Holzer Health Systems. But for 2014, they had a goal. CrossChx was going to sign up 100 hospital systems in 12 months. Not being healthcare guys, industry insiders told them they were crazy, but they were confident in their ability to grow companies.
“In 2014 we signed over 100 health systems,” Lane says.
But it was late 2014 and early 2015 that they started to run out of money.
“Being in Columbus and being a startup with the ambition to become an industry-changing company, a massive company, a multi-billion dollar company, we were kind of a rare breed,” Lane says. “We need a lot of money to do what we need to do and we knew you can’t stay in Columbus to do that.”
Lane headed to San Francisco with a goal of raising $10 million. He left with $15 million led by Kholsa Ventures.
Money has meant a lot of things for CrossChx. It’s meant nationwide expansion and being able to evolve and better articulate their concept. It’s also meant the opportunity to build out components that were once just ideas.
“After the fundraisers that we’ve gone through, we’re able to staff up pretty heavily out there which is giving us the resources to actually see those things to fruition and we’re actually turning them into products that are going out into the marketplace,” Mascho says.
While healthcare can be convoluted, CrossChx is built in three layers around two fundamental principles.
Principle number one: healthcare does not have the internet.
“There’s a bunch of silos of data in every single hospital,” Lane says. “There’s no one way to identify a patient across the entire healthcare industry.” That means no organization of data and no way to build applications.
Which leads to principle two.
“Giving healthcare the internet changes everything and creates an entirely new industry of app developers that can build amazing software applications,” he says.
CrossChx addresses this with a layered approach: distribution – platform – application.
“Our goal in layer one of CrossChx is to distribute our software to as many hospitals as possible,” Lane says.
Distributing the software is the equivalent of installing their app marketplace called Quad.
With Quad installed, software developers can build applications for hospitals, which will then be available in the marketplace (the second layer). The applications will give hospitals more variety and choice in the applications they choose for day-to-day tasks.
Layer three is the actual apps in the store, and where CrossChx identity resolution solution SafeChx lives. The app uses special proprietary algorithms to take multiple versions of a person’s medical records and resolve it into one unique identification. Once their ID is created, patients also have the option to seal it with a fingerprint using biometrics. An individual can’t fraudulently use another’s identity and doctors are able to make sure that the right person gets the right care.
That’s just one example of an application that can improve the healthcare system. Lane and Mascho envision apps for better marketing, better record keeping management, better finances, and even applications that can better help with diagnoses.
CrossChx solution is currently distributed to 134 health systems in 19 states with just over 22 million resolved unique identities. Their goal is to be at 50 million identities by the end of the year. Locally CrossChx is in health systems in Bellfontaine, Lancaster and Athens and having conversations with just about every health system in Columbus.
Growing so rapidly hasn’t been without it’s challenges. CrossChx has gone from about 30 employees in mid-March to around 100.
“Bringing people into company is the hardest thing you can possibly do because every single person impacts the company in some way whether positively or negatively,” Lane says.
Currently, much of their time and budget goes towards finding that right hire. It’s a process they hope to do another 40 – 50 times over by the end of the year.
“A lot of the people that we have here want to prove themselves,” Mascho says.
They have a bit of a chip on their shoulder and want to prove themselves because they chose not to move to the coasts or decided to return to the Midwest. Lane also says CrossChx is a great option for people in the corporate world who have always been after a little bit more and want the chance to make a difference or make an impact.
CrossChx has recently moved their growing team to the Karlsberger Building at 99 E. Main St. downtown. The renovation of the 30,000 square-foot two-floor building will become a constant reminder of the company’s culture and values.
For more information, visit crosschx.com.