Ferguson CEO of ClearPractice, backed by VC Doerr

By Milt Capps

Published April 5, 2010

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Gary Ferguson
ClearPractice CEO

Nashville's Gary Ferguson has been named president and CEO of ClearPractice LLC, an electronic medical records (EMR) and revenue-cycle spin-off backed by fabled venture capitalist John Doerr.

Ferguson told VNC he's been working to develop the venture with St. Louis-based Essence Group Holdings for most of the past year.

A year ago, Ferguson exited his role as president and CEO of NotifyMD Inc., the e-messaging company based near Nashville.

ClearPractice's offerings were previously marketed under another Essence Holdings brand, GenesysMD, which is now "dissolved," according to Ferguson. He declined to provide financial details on the rebranded company he now leads.

While the ClearPractice headquarters will be St. Louis, Nashville will become home to a new 15-person office dedicated to sales, telemarketing and administration. ClearPractice's total workforce is projected to hit 110 in the U.S. and 400 in Hyderabad, India, by Dec. 31, 2011.

Earlier this week, ClearPractice Chairman Frank Ingari told VNC his company had "strongly considered" relocating its headquarters to Nashville, but opted against uprooting software developers and other staff long-concentrated in St. Louis.

Ferguson stressed that Doerr (at right), who is a native St. Louisan and the principal

owner and financier of ClearPractice, stays deeply engaged in the ClearPractice business.

Moreover, Doerr's controlling interest in Essence Holdings is a result of personal investments, not investments by funds managed by Bay Area-based Kleiner Perkins Caufield & Byers, where Doerr is partner. Essence assets include Medicare Advantage provider Essence Healthcare Inc.; analytics player Lumeris; and, Clearpractice. ► For more on Doerr, KPCB, Tennessee, click here.

Ingari (at left) said ClearPractice will nonetheless have a substantial presence in Music City, "because Nashville is a huge force in healthcare... The concentration of leadership, successful entrepreneurs, and HIT innovation exists nowhere else. Since ClearPractice needs to be an integral part of the emerging mesh of HIT players who build the new networks of healthcare, you kind of have to be there in some form." Ingari added that ClearPractice will "will invest in Gary¹s team aggressively."

Ferguson said he is, in fact, aggressively recruiting staff for Nashville, including a key VP-Sales, who has not yet been discovered. Both Ingari and Ferguson said that developing partnerships and alliances with other companies is very high priority, as well.

Asked why Ferguson was chosen for the lead role, Ingari said the company believes Ferguson has an unusual mix of clinical background (he holds a PH.D.), software-as-a-service (SaaS) experience and entrepreneurial instincts and credentials.

Ingari also said he believes Ferguson's personality is "a good fit." He added, "We're a bunch of workaholics who like to have fun at work. Plus, he loves music."

Explaining why Essence chose to spin-out ClearPractice and technology that had already been introduced to the market under the now-supplanted GenesysMD brand, Ingari explained that while there are technological synergies among Essence companies, the units' "customers, channels, and products are very different."

"So," Ingari added, "we decided to give ClearPractice its own equity and governance structure, as well as the freedom to sell to Essence Healthcare competitors." Ingari continued, "At the end of the day, the decision comes from our collective experience that software companies need a lot of flexibility in order to grow quickly and respond to market change."

The ClearPractice suite is aimed at physician groups' ambulatory-care practices. ClearPractice is initially targeting practices with 10 or fewer docs.

Dozens of companies worldwide doubtless have their eyes fixed on the same EMR motherlode.

Notwithstanding the crowded field, when VNC presented Ferguson a list of nearly a dozen such potential competitors, Ferguson methodically dissected each potential foe, ticking-off disadvantages he believes each competitor faces, at this time. While acknowledging competitors won't all stand still, he made clear ClearPractice is out-front looking to widen its lead.

Ferguson said his confidence about ClearPractice stems in part from the fact that Doerr has said more than once, "We're not in this business to be number 2."

Ferguson said he is also heartened by the fact that Doerr, Ingari, he and others within Essence and ClearPractice share a

sense of the ways in which ClearPractice EMR and revenue-cycle offerings represent intellectual property that can drive upward the valuations of all Essence Holdings' companies, thereby improving future returns, whether the strategy involves "a long-term hold," an IPO, mergers and acquisitions or a sale to a strategic investor.

That said, Ferguson immediately added, "I don't think John [Doerr] actually thinks 'exit strategy' before 'success'. I think he thinks 'success', and then whatever seems to be the best play... It could be," he added, "that ClearPractice becomes the spear that helps take Essence and its combined properties public."

Ferguson adds that Doerr's commitment and his own sense of ClearPractice's standing in the market are the main reasons why he "passed on three CEO opportunities," in order to pursue with Doerr's backing the ClearPractice role Ferguson now holds – without, Ferguson said, a front-end commitment from Essence or Doerr regarding the eventual outcome.

Ferguson, however, told VNC he is confident that ClearPractice EMR's having been fully operational a year in the marketplace, after more than two years' development, has given the company the "longest legacy" SaaS EMR in the industry, establishing ClearPractice as the "leading brand," the "best of breed" for groups of up to 10 physicians, which he said is "a ripe market to attack."

At the center of Ferguson's confidence is his unshakeable belief that ClearPractice's technology is "the first true SaaS product out there," in an era in which neither physicians nor hospitals want to buy hardware, if they can avoid that with SaaS.

Ferguson stressed that his confidence is spurred by the fact that while SaaS delivery is not new in most industries – "it's not new to Amazon, Google, Intuit or Salesforce" – but, "every technology is new in health care." Consequently, the young but developmentally "mature" ClearPractice SaaS is "going to be ranked one of the very top vendors in this space."

Particularly in serving small groups of physicians, Ferguson said, quick and clean implementations are vitally important. Those groups, he explained, typically have no information-systems managers and physicians and staff want minimal distraction from their priority of providing quality care to patients.

He said ClearPractice consistently moves from contract signing to fully operational implementation in less than 30 days. Combine that, he said, with an integrated learning-management system (LMS) that helps ensure all customer-users are spending necessary time learning the system, and the result is business success.

The company's Web-based software-as-a-service (SaaS) offering, which can be unbundled to some extent, includes electronic medical record, practice-management system, e-prescribing, revenue-cycle management and mobile-applications components.

ClearPractice marketing materials provided VNC by Ferguson declare the company "guarantees," among other things, that its EMR is certified to meet "current and future" requirements embodied in the Federal HITECH Act; provides elements needed for physicians to qualify for ARRA Stimulus funding; and, provides "an approved CMS patient registry" that meets requirements for qualifying for Physician Quality Reporting Incentives (PQRI).

Prior to joining NotifyMD in 1997, Ferguson founded and ran Respracare, a durable medical equipment (DME) supplier based

in Newington, Conn. He sold that company after four years to Lincare Holdings Inc., in a transaction valued at $14 million. ►For more on Ferguson, NotifyMD, click here.

His earlier experience included SVP and general manager of Mediware Information Systems (Santa Cruz, Calif.).; VP-Sales and director of clinical systems for Continental Healthcare Systems (Overland Park, Kan.); and, director of clinical pharmacy services, United Western Medical Center, Santa Ana, Calif.

In 1982, Ferguson, now 55, earned his doctorate in Pharmacy and Pharmacology at the Los Angeles County and University of Southern California (LAC+USC) Health Network. He earned his bachelor's in animal physiology and pre-medicine at the University of California at Davis.

Ferguson, his wife and their two teen-agers live in Brentwood, near Nashville. He maintains a second residence in the St. Louis area. ♦