Dr. Ravdin prescribes stress relief, the PDS way

Dr. Jonathan Ravdin likes biological analogies, and why not? He spent 30 years of his professional life as an academic physician and scientist, and since taking over as president and CEO of Paragon Development Systems last year, he has worked to reposition the IT services firm to help health care, education, and general corporate clients deal with the historically stressful environments that are unique to their respective industries.

Under Ravdin, the PDS mission is not only to reinforce the pay-for-quality model at the core of the Affordable Care Act, but also to help industries avoid extinction in what is essentially an evolutionary environment by developing an integrated central and peripheral IT nervous system that is aligned with emerging strategic business models.

Ravdin, who delivered a keynote address at the recent Fusion CEO-CIO Symposium, is a physician scientist by trade and once served as dean of the Medical College of Wisconsin. To explain what is happening to several industries, he uses a favorite biological analogy, one involving the free-living amoeba. It not only stems from his expertise in parasitology, it also illustrates what has happened to health care organizations in particular. 

The free-living amoeba lives in an environment that is conducive to its growth, with many nutrients and just the right temperature. In this environment, they are very metabolically active, and they reproduce.

However, when their environment becomes more stressful, they aggregate into a new organism called a slime mold, a fixed colony that is not metabolically active and does not reproduce. “It basically is waiting out the stress,” Ravdin said. “So what you see now in a lot of businesses and in health care is this aggregation into larger groups so that they grow through acquisition and so forth, but they find that their functionality actually is more challenged.”

In Ravdin’s view, a lot of stressed business organizations are acting like fixed colonies. “They are trying to wait this out, cut costs, and hope that they will come out the other way, and that’s just not going to get there,” he stated.

Spinal tap

Instead, Ravdin believes health care providers must evolve into a vertebrate life form like humans, with technology-centered central and peripheral nervous system. “Every aspect of what we do is connected to what I call an information technology system that has a higher function and data analysis, that can sense everything that is going on in our business, and that is completely unified rather than disjointed in different pieces,” he explained.

Other pieces of that unified, IT-focused nervous system are robust analytics and cloud services, which can help beleaguered organizations turn their business models “upside down.”

Health care is perhaps the most prominent example of an industry under duress. In addition to adjusting to a landmark health reform law, health providers face an aging population that intensifies the need to access health care, which markedly increases the most expensive aspect of health care management – chronic diseases like diabetes. What’s more, there is the new capability to identify whole genome sequences on every patient that would enable a highly personalized approach to medicine, but providers don’t yet have the economic capacity to manage it.

“In the face of all this, everybody in the field knows that [government] reimbursement activity will be decreasing, that they will be managing patients based not on being paid for what they do, but being paid for what they don’t do,” Ravdin stated. “That is the accountable care model [outlined in the ACA].”

This industry disruption stands in stark contrast to the old model. Years ago, much like a free-living amoeba, whatever health care providers spent was generally reimbursed with a little profit margin thrown in. Now, as the environment becomes less “hospitable,” they will have to settle for a negotiated price to care for an individual patient, no matter how much they spend.

As Ravdin explained, the industry is stuck with a very high fixed and variable cost model after having built big-box hospitals and setting compensation for physician specialists “incredibly high.”

“They built all this with the idea that they would grow and gain greater revenue from what are high revenue generators,” he noted. “All of a sudden, those high revenue generators become cost centers and those big buildings become cost centers instead of revenue generators. It turns the whole model upside down.”

This is where disruptive technology can play a role in transforming entire industries by enabling low-cost competitive models like telemedicine.

PDS is working with clients to ensure that technology becomes fully integrated into the care delivery model and improves enterprise-wide performance across a series of metrics – productivity, efficiency, clinical outcomes, security, and patient-provider satisfaction.

With PDS’ corporate clients talking about “big data” and trying to figure out how to manage and store it, this transformation is partly about analytics, according to Ravdin, but it’s also about the idea that there is an IT tool, and by virtualizing the environment and using cloud-based technology and hybrid private cloud-based technology, a venture can connect its system in a unified way. What’s more, it can be connected in a single data center where the analytics can be unified with autonomic functions throughout.

In health care, 10% of the patients account for 60% of the cost. According to Ravdin, it would pay manyfold to give everyone with a chronic disease an iPad they can manage and that provides home-based health care in a virtual, collaborative environment. “You can go on and on with these cases that would really improve performance and function and markedly reduce cost and improve outcomes, whether it’s educational outcome or clinical outcomes or business outcomes,” he stated.

Cutting through the cuts

Under Ravdin, PDS is betting that unified systems could provide tremendous opportunity for higher-quality education at lower cost.

In the education realm, the stressors are declining state support, resulting in recent budget cuts, and the paring down of teaching staffs. Instead of cutting, school districts can respond by creating a virtual, collaborative environment. “There can be a group that is really interested in art but their school has no art teacher anymore, but they do have one art teacher in the whole district and they can provide [virtual] sessions for those students who are interested,” Ravdin explained. “It’s a way to leverage resources for the whole system.

“It’s providing the educator an opportunity to match up with the students’ needs, which we don’t do, and it provides an environment where students can also work together collaboratively but safety, and also with facilitation.”

Ravdin noted that “if there is any data in education, it’s that longer school years and longer school days provide greater outcomes.” If school districts can apply technology to a longer virtual school day and achieve improved outcomes without significant costs, it could create a much better learning environment.

“There needs to be a new model for effective education,” he stated. “The K-12 model is not producing what we need.”

IT novice takes charge

In addition to the Medical College of Wisconsin, Ravdin’s previous stops include Case Western Reserve University-Cleveland VA Medical Center and the University of Minnesota. At one point, he received 27 years of continuous funding support from the National Institutes of Health; the average duration of funding for a physician scientist in the United States is 10 years.

He still laughs at the notion of an IT-challenged physician scientist taking the helm of an IT services company, but rather than just sell IT services, he was brought to PDS to apply his knowledge of clinical practice management and modern bioinformatics to the mission of transforming business models. However, he thought it would be as a member of the PDS board of directors.

During Ravdin’s tenure with the Medical College of Wisconsin, John Byrnes, founder and chairman of the Milwaukee Institute and the chairman and president of Mason Wells, a Milwaukee-based private equity firm, worked with him on various projects. Ravdin would eventually become a health care consultant for Mason Wells before leaving to join the PDS board, which was a planned move. What was unplanned was the resignation of former CEO Craig Schiefelbein. On March 1, 2012, Mason Wells, which has a majority stake in PDS, named Ravdin to take over the leadership of the company.

With half of PDS’ clients operating in the health care space, Ravdin’s idea was to establish a new strategic model based on emphasizing improved client performance over selling products “and making life easier in IT,” Ravdin said.

Mason Wells’ investment in PDS is one of several large investments the firm has made in area IT companies “as part of a strategy to help build the high-tech infrastructure of the region for future generations of high-tech entrepreneurs,” Byrne noted. “PDS is a key part of that strategy.”

David Cagigal, CIO of the Wisconsin Department of Enterprise Technology, said Ravdin brings to PDS an excellent background in vertical markets for education and health care. Noting that information technology will play a huge role in K-12 education reform, Cagigal said that PDS is uniquely positioned to offer products and services “that can be sold by Jonathan as a person who understands that.”

“He’s an academic as well as a practicing physician, so he understands where he fits in the value stream,” Cagigal added. “As the education market strengthens, either K-12 or higher education, he can do the translation very well between understanding the need and the demand, as well as providing a solution and a service and a product that will help the education market become stronger and better and more responsive.”

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