Smart Card Developer Moves Here

April 25, 2003
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GRAND RAPIDS — He thinks he made a smart move to better market his Smart card.

Dale Grogan, CEO of Conduit Healthcare Solutions, recently relocated the home office of his firm from Maitland, Fla., to the Ledyard Building at the corner of Ottawa Avenue and Monroe Center.

Having done what he felt he could do with Conduit in the sunny south, Grogan packed his company’s bags and headed north in hopes of taking Conduit to new heights.

“Moving our headquarters to the next level provides us with direct access to one of the most dynamic health care markets in the nation,” said Grogan, who started Conduit six years ago.

“This move is part of our larger expansion plan that includes becoming a publicly traded company by the end of 2003.”

Conduit develops and markets software applications that use smart cards, which are credit card-sized pieces of plastic that contain “mini-computers.” These cards can store and manage a patient’s medical information and demographics. Providers can access this information from the card, and the vital data can be protected through passwords and keys.

Use of the smart-card technology in health care is pretty much in the infancy stage in the U.S., even though more than 150 million of these cards are in play in Europe. Conduit is in on the ground floor of an industry that could explode over the new few years, serving a field that desperately needs to get its costs under control and find a way to address privacy issues concerning how it handles privileged information that belongs to patients.

“We believe that smart cards are the most cost efficient and most secure data management tools on the market today,” said Grogan.

Grogan said the business issue for him is that not many smaller firms taste success today. As soon as one gets both feet through the door, a conglomerate slams it shut and either buys it out or buries it. But with Conduit being a pioneer in the field and competing firms not well organized yet, Grogan feels he can push his company to a higher tier fairly rapidly.

“Our whole sales and marketing effort right now is to get as many dots on the map as we possibly can to hit critical mass. We want to get into 100, 250, 500 hospitals as quickly as we can with those cards and readers,” he said.

“And then there is the issue of what kind of connecting activity can you make between those hospitals. The sharing of data is obviously critically important. In fact, there are some government mandates with HIPAA where patients have the right to do that — and, historically, potentially competitive health care providers don’t like to see that happen.

“But I think there is real value for patients if they can carry medical records on a smart card,” he added.

Grogan said Wake Forest Baptist Medical Center is the latest to sign on with Conduit. When the North Carolina system becomes activated, Conduit will have 100,000 users.

“They’re spending millions and millions of dollars to connect all their formerly discrete units together.”

While he is busy selling his technology, Grogan is also in the process of filling his board of directors. So far, he has attracted two familiar names to the board: Fred Vandenberg and Steven Heacock.

Vandenberg brings extensive health care and management experience to Conduit, having been COO of Butterworth Hospital and a special assistant to the CEO of Spectrum Health. Vanderberg has also held various leadership posts at American Seating, and currently serves as the interim CEO for the Grand Rapids Medical Education Research Center.

Heacock has agreed to chair the Conduit board. The past chairman of the Kent County Board of Commissioners and former legal counsel and head of business development for Priority Health is now CFO and Chief Legal Officer for IdeaSphere Inc., a firm in the natural and organic products industry begun by David Van Andel last year.

“I am incredibly excited about the potential of smart-card technology in health care. Health care is a morass and it’s not at all customer-friendly. Part of the issue is you go from doctor to doctor and clinic to clinic, often in the same day, and give the same information to different people in many different ways at many different times,” said Heacock.

Heacock said he likes the idea that patients would be in control of their health data, and could have their records updated on a card they would take with them.

“The use of it around the country has been tremendous,” he said of the Conduit card. “I think it’s going to be a great success and I’m having a lot of fun with it.”

Grogan told the Business Journal that he was very close to filling another board seat with another business leader, a person who is highly regarded for her ability to lure companies to West Michigan. And why not? After all, Grogan was drawn here from Florida.

“So far, we’re the valedictorian of a class of one,” he said of Conduit’s success with a smile. “But we’re batting a thousand. Every single client has come back and purchased additional software and upgraded.”      

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