Modernizing Medicine, IBM Watson's Preferred Healthcare AI Partner and Developer of the EMA Platform Used by One-Quarter of U.S. Physicians, Files for IPO

Introduction:I believe many doctors have used it.Electronic Medical Record, i.e., digitized patient medical records that are stored, managed, transmitted, and reproduced using electronic devices (computers, health cards, etc.). Currently, major electronic health record (EHR) vendors in the United States include Epic Systems, Practice Fusion, and Modernizing Medicine. With the implementation of the U.S. healthcare reform legislation, the development of EHR systems has advanced rapidly. So how did Modernizing Medicine stand out and achieveIBMWhy is it favored by numerous clinicians in the United States? 

Modernizing Medicine: On the Entrepreneurial Journey

About five years ago, in 2010, Daniel went to a hospital for a check-up. Upon returning, he pondered the experience and eventually founded this company.This serial entrepreneur, who had previously co-founded the educational technology company Blackboard, met his next partner, Dr. Michael, in the doctor’s office where he underwent the examination.After the appointment, while having lunch, he complained to Dr. Michael about how inefficient and outdated the physicians’ practices were, even back in 2010. You know how the story unfolded: it was simply because they wanted to find a better way.Thus, Modernizing Medicine was incubated in Boca Raton. Today, the company offers a leading Electronic Health Record (EHR) system tailored to specific specialties, designed to enhance efficiency and improve treatment outcomes. Currently, approximately one-quarter of physicians across the United States are using Modernizing Medicine’s Electronic Health Assistant (EHA), a physician-friendly application. The EHA application now covers plastic surgery, orthopedics, otolaryngology (ear, nose, and throat), and other specialty disciplines.

Beyond strong industry impact and financial performance, what excites Daniel and Michael most about the company’s recent achievements is its partnership with the IBM Watson supercomputer. Notably, Modernizing Medicine was among the first companies selected to collaborate with Watson, helping to bring its powerful cognitive computing capabilities to the healthcare sector. This initiative is part of IBM’s $100 million plan to partially commercialize Watson.

Mernizing Medicine has earned IBM’s favor by delivering highly customized services tailored to clients’ specific needs. The U.S. healthcare system is highly specialized, with distinct requirements for plastic surgeons and optometrists. The company now serves 2,700 clients, 1,000 of whom are actively using its services.

The company has developed an application called schEMA for Wason, designed to help physicians provide optimal treatment plans. As an enhanced version of EMA, schEMA combines EMA’s big data processing capabilities with Wason’s cognitive abilities to better assist physicians in addressing relevant medical issues.Leveraging cognitive computing and natural language processing, Wason can rapidly answer physicians’ questions by utilizing published medical information and clinical reasoning. Daniel once stated that the entire collaboration aims to strengthen physicians’ recommendations, ensuring their medical advice is grounded in clinical practice. Cane and Sherling believe the opportunities are substantial; they are collaborating with academic institutions to publish research studies, hoping to demonstrate a more comprehensive healthcare outlook using data from hundreds to thousands of patients.It is conceivable to ask: if 25% of the dermatology market adopts the same cloud platform based on structured data and algorithms, what could be achieved?After three rounds of venture capital financing, Modernizing Medicine has raised nearly $30 million, with the latest round of approximately $14 million led by Summit Partners.Admittedly, the electronic health records (EHR) market is crowded, but it is also vast and continues to grow. With strong management teams and innovative approaches, better opportunities will emerge.

Within Modernizing Medicine’s expansive office space, employees are brimming with energy. Approximately half of the company’s workforce has a medical background—including physicians, nurses, and healthcare sales representatives—while the other half consists of senior technologists. In fact, Modernizing Medicine employs 17 licensed physicians who regularly engage with technical staff to discuss every detail of software development; many of these doctors are even proficient in basic programming languages.Daniel has publicly stated that both education and healthcare are industries characterized by sluggish progress, and that only significant transformation can drive their development—a key similarity between the two. He views healthcare as his second opportunity to effect change within the medical industry, much like his first venture founding the educational technology company Blackboard.

Product: From EMA to Telemedicine

Electronic Medical Record App - Deeply Customized Cloud-Based EMAModern Medical Company is dedicated to the modernization of medicine, utilizing deeply customized Electronic Medical Assistants (EMA) to deliver comprehensive services and solutions. The system interface is highly intuitive and can be autonomously adjusted to suit each physician’s workflow style. Built on cloud storage, it enables real-time data synchronization. Much like using a smartphone, the system features built-in touch-screen drawing capabilities, allowing physicians to quickly create patient charts, billing records, and other medical data through simple taps and swipes. With the EMA system, doctors can access patients’ medical histories with just a touch of the screen.Take, for example, the EMA specifically customized for urologists.

As can be seen from the figure above, the entire system has no redundant settings and has built-in urology ICD-10 codes. Since it is customized based on individual physicians' preferences, there are no standard templates for reference.After completing a patient's physical examination, physicians typically need to fill out numerous forms and consult various specific standards to generate accurate medical bills. This customized EMA system is meticulously designed in terms of workflow, allowing the entire examination process to be completed in just a few steps.Built-in Coding Standard: ICD-10 (International Classification of Diseases)

The ICD-9 coding standard has been in use for a long time. Since the codes were relatively short from their inception, many healthcare professionals have inevitably memorized the most commonly used ones.However, starting October 1, 2015, the U.S. healthcare system mandated a transition to ICD-10. The new ICD-10 codes are significantly longer and more complex, placing substantial demands on memory. Previously, Electronic Health Record (EHR) vendors relied solely on built-in translation tools for ICD-9 interpretation and lookup.Given that only 5% of ICD-10 codes correspond directly to ICD-9 codes, accurate translation is nearly impossible. To locate the appropriate ICD-10 codes within legacy EHR systems, physicians had to navigate multiple steps and endure long wait times, often still receiving inaccurate results.Transitioning from ICD-9 to ICD-10 required efforts comparable to learning a new language. With limited descriptive guidance available for the new standards, physicians across the country found themselves mired in confusion during the transition period.A core competitive advantage of Modernizing Medicine lies in its product design, which was built natively around ICD-10 from the outset. This eliminates the need for translation tools or code converters relied upon by other EHR vendors. Furthermore, the company’s ICD-10-based automated billing standards are highly accurate, ensuring that medical bills generated by physicians are compliant and error-free. This maximizes the reduction of human error, allowing doctors to focus on diagnosis rather than being distracted by minor issues such as billing discrepancies. It is due to these two advantages that Modernizing Medicine’s products have gained significant favor among professional physicians.Telemedicine: A Teledermatology App

Telemedicine represents a vast and rapidly growing market. In 2015, more than 800,000 patients in the United States engaged in online consultations, enabling physicians to generate additional income through remote care. As an EMR customization provider, our company has naturally seized this opportunity.Our telemedicine solution continues to emphasize deep customization, with a current focus on dermatology. Among various medical conditions, skin diseases are relatively easier to diagnose through visual examination of affected areas.The platform is user-friendly: patients simply describe their skin conditions within the software and upload photos to the cloud at their convenience. EMA provides virtual storage space, allowing physicians to review cases and provide responses at any time. Furthermore, patients’ historical medical records are consolidated into a single interface, facilitating efficient review and saving physicians valuable time. Additionally, physicians can leverage fragmented intervals to remotely diagnose common skin conditions and offer treatment recommendations, thereby creating new revenue streams.

Leader: Committed to the Modernization of Medicine

The entire team boasts extensive backgrounds in entrepreneurship, healthcare, technology, and management, including serial entrepreneurs, holders of Medical Doctor (M.D.) degrees, and senior operations executives who are alumni of prestigious universities and have worked at numerous multinational corporations. All of this demonstrates that IBM’s choice was by no means accidental.Daniel Cane- Chief Executive Officer and Co-founder

Daniel is the CEO and co-founder of Modernizing Medicine. He was named Entrepreneur of the Year in 2015 and Outstanding Leader of Small and Medium-sized Enterprises in 2013, and was invited by the South Florida Business Journal to serve as an Honorary CEO for Palm Beach County.Since its founding in 2010, Daniel has led his team in raising over $85 million in funding and hiring more than 430 employees. He also guided the company through two acquisitions: the acquisition of GMED in 2015 to provide specialized gastroenterology products and services, and the acquisition of Aesyntix Health in 2014, which enabled Modernizing Medicine to offer revenue cycle management and inventory management solutions to its customers.Daniel is frequently invited to speak at various forums across Florida and nationwide. Before becoming an entrepreneur, he earned a Bachelor’s degree in Applied Economics from Cornell University. While still a student, he founded Blackboard, a company focused on electronic education, where he raised over $100 million in venture capital. In 2004, Daniel helped take the company public on the NASDAQ (ticker: BBBB). In 2011, Blackboard was sold for $160 million.Daniel remains actively involved in community activities. In addition to serving as Vice Chairman of the South Florida Science Center, he is one of the co-chairs for Palm Beach County, Florida. He was appointed to the Board of Trustees of Florida Atlantic University by Governor Rick Scott and was named Vice Chairman in 2015.Michael Sherling, MD, MBAChief Medical Officer

Dr. Michael is the Co-Founder and Chief Medical Officer of Modern Medical, where he primarily leads the development of software-based aesthetic designs and oversees the design of other EMA products. Under his leadership, Modern Medical has captured approximately 30% of the U.S. dermatology market and helped the company raise over $85 million in funding.Dr. Michael obtained his dermatology license in 2006 and currently practices within a comprehensive dermatology group in Palm Beach County, Florida. He is an expert in medical, surgical, and cosmetic dermatology. Prior to relocating to Florida, Dr. Michael became board-certified by the American Board of Dermatology. He currently serves as the Associate Director of Laser Medicine and Skin Health at Brigham and Women’s Hospital in Boston. He has also authored several medical publications with various publishers.Dr. Michael earned his Bachelor of Arts degree in Biology from Brown University in 1996, followed by an M.D. and an MBA from Yale School of Medicine and Yale School of Management, respectively, in 2002. He completed his clinical specialty training at Harvard Medical School, where he served as Chief of Dermatology, before obtaining licensure to practice medicine in Florida.Karen O'Byrne Chief Financial Officer and Chief Operating OfficerKaren serves as the Company’s Chief Financial Officer and Chief Operating Officer, overseeing all financial, human resources, and healthcare operations, with a particular emphasis on corporate strategy and planning.Karen is a Certified Public Accountant (CPA) with international credentials. She holds a Master of Business Administration (MBA) degree and a Bachelor’s degree in Accounting from the University of Florida. With over twenty years of experience in finance, accounting, and operational management within the modern pharmaceutical industry, Karen previously served as CFO at Campus Management, a software company providing administrative and academic solutions for educational institutions. She also held senior roles in business planning and finance at Verio, Inc., a U.S.-based provider of global web hosting and managed services. Additionally, Karen has more than nine years of experience in public accounting advisory and certified management consulting.