CardioDynamics: Phoenix Rising- Health Executive - Red Coat Publishing - Inside Healthcare

At San Diego-based CardioDynamics, developer of innovative impedance cardiography (ICG) technology, seven years of rapid growth came to a screeching halt in 2005 when Centers for Medicare and Medicaid Services (CMS) dramatically changed the rules of the game.

Michael Perry, CEO

Prior to CMS’s changes, reimbursement related to the use of CardioDynamics non-invasive heart monitoring and diagnostic equipment had few restrictions. After the policy shift, it became more difficult for physicians to get paid when using the technology to treat patients with high blood pressure.

“Needless to say, that took the wind out of our sails in terms of growth,” said Michael Perry, CEO of the company since 1998.

After a sharp decline in 2006, Perry and his executive team realized the company would wither if it wasn’t transformed quickly. That’s why CardioDynamics created the Phoenix Initiative, a comprehensive growth plan that would redefine how the company serves its customers and approaches the market.

“Out of the ashes rises a company with increased capabilities,” Perry said. “We rallied around that image of the phoenix. It was a tough environment for our company for two years. It was time to look for new opportunities to grow with the reimbursement rules that were in place. We had to begin taking a different approach.”

For CardioDynamics’ physician and hospital customers, the initiative has meant a significant increase in the programs and services the company provides. And for the company, it’s meant a major financial turnaround—a rebirth akin to the mythical phoenix.

The Technology
Traditionally, hemodynamic monitoring has been available only through pulmonary artery catheterization, a time-consuming, costly, and potentially dangerous invasive procedure.

CardioDynamics’ innovative BioZ ICG technology uses sensors on the outside of the body. A small current is sent through the sensors and into the chest cavity, and the company’s software and signal processing technology allow physicians to view 12 measurements of the patient’s heart, circulatory system, and blood flow performance.

“The medical community uses our products to help select the right medications and dosage for patients with cardiovascular disease,” Perry said. “The most obvious benefits are that it’s noninvasive, low cost, highly accurate, and can be performed in less than five minutes.”

Because the technology is noninvasive, it can be performed in outpatient areas, including physician offices and hospital EDs, which have never before had access to hemodynamic information.

“In this new era of cost containment, healthcare payors and providers are demanding greater efficiency and cost-effectiveness without diminishing the quality of care,” Perry said. “The BioZ ICG monitoring system provides a solution for meeting this growing demand.”

The Transformation
CardioDynamics’ technology quickly made it into about 15% of congestive heart failure clinics across the country and began experiencing a surge in physician offices. But the rapid rise was derailed when CMS made it difficult for physicians to receive reimbursement for using the technology for patients with high blood pressure.

The Phoenix Initiative was designed to help customers overcome the challenges posed by the CMS rule changes, and increase the use of the BioZ product line. The major areas of the initiative detail how the company simultaneously expanded its offerings to customers and enhanced its opportunities for growth:

The Yes Program. The program addresses customer concerns related to reimbursement, financing, and long-term sensor cost through a five-year investment protection and product warranty.

The Legacy Program. The program targets early adopters of the technology and is designed to improve customer satisfaction, utilization, referrals, and ICG system upgrades.

The ICG Centers of Excellence Partnership. The program engages highly satisfied, clinically experienced ICG users to educate potential customers about the clinical benefits of the technology.

The Direct Response Program. The program employs a dedicated marketing team to pursue current BioZ customers to upgrade their systems to the latest generation ICG device.

The Pharmaceutical Research Alliance. The program collaborates with core laboratories and clinical research organizations to incorporate ICG into Phase I through IV pharmaceutical clinical research trials for enhanced cardiac safety monitoring.

Perry pointed to another element of The Phoenix Initiative as a major reason for the company’s resurgence. To make customers as comfortable as possible in implementing the technology, CardioDynamics also created the BioZ Activation Process (or BAP). The company’s clinical team is made up of nurses and cardiac rehabilitation professionals that provide comprehensive customer training and, through the BAP, assist physician offices in appropriately assessing which patients can benefit from BioZ data.

“Our approach is to really make sure the customer understands fully how to operate the equipment and get the most out of the investment they’re making,” Perry said. “We’ve made it as easy as possible for our customers by giving them a single questionnaire sheet. If a patient answers yes to any of the questions on the sheet, they’re a candidate for the test, both clinically and from an insurance reimbursement point of view.”

The Phoenix Initiative was a major success, helping the company increase revenue by 10% in 2007 and cutting its operating loss nearly in half. Perry said the company is projecting at least 15% growth in 2008 and reaching positive operating cash flow by the end of the year.

“We’ll continue to penetrate our core US physician office market. That will require hiring additional sales and clinical personnel and getting them trained and productive as quickly as possible. We’ll also continue to increase the body of clinical evidence for our technology. I believe one day we’ll be included in the treatment guidelines for either heart failure, hypertension, or both of these major diseases.”

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