Hospitals need to modernize their ordering systems. This Philly startup got a $2M NIH grant to help.

A Philadelphia startup helping hospitals streamline their digital systems to better serve patients just got its second multimillion-dollar investment from the National Institutes of Health. 

Phrase Health, based in Center City, has a platform called Outcomes that helps healthcare facilities evaluate their electronic record systems and figure out if they could be more efficient. Phrase will use the newly awarded $2 million Small Business Innovation Research NIH grant to build out the platform and develop a content library of templates, founder and CEO Marc Tobias told Technical.ly. 

“A lot of health systems are focused on, how do we now not just deliver good care by ordering things, but how do we make sure that we’re actually delivering the outcomes that patients and payers and everyone wants,” Tobias said. 

His company spun out of the Children’s Hospital of Philadelphia in 2018. It received a $1.7 million grant from the NIH in 2021 and has since raised a $3 million seed round. 

Health organizations using Phrase’s platform have seen shorter patient stays, financial savings and less time working on documentation, Tobias said. For example, one health system used Outcomes to revamp its workflow for putting in pneumonia-related orders and was able to reduce orders for a certain test by 57%, with $73,500 in projected savings, according to a case study report. 

The platform evaluates how providers can meet their goals for value-based care programs, a new paradigm that’s changing how hospitals make money.

Historically, healthcare systems have been paid based on the number of services they provide to each patient, which makes adding a lot of tests and scans and appointments more profitable. But there’s been an industrywide recognition that this approach is not always best for the patients, said Tobias, who is both a practicing emergency medicine physician and a former software engineer. 

To address this, government entities and insurance companies have adopted programs that reward “value-based care,” paying or reimbursing healthcare providers for positive patient outcomes, instead of just the number of provided services. Medicare now works that way, with several value-based programs that offer incentive payments for good patient care.

The results of value-based care programs so far have been mixed, and there hasn’t been a huge impact yet, although there is potential, according to The Commonwealth Fund, a foundation that supports healthcare research. 

Phrase Health hopes to boost adoption and effectiveness of these programs with an expanded content library.

“Our goal with this new grant is to basically take Outcomes to that next level,” Tobias said, “where you have this templated library of quality projects associated with these value based care programs.” 

Lowering costs and reducing patient readmissions

Healthcare systems had shared feedback that it took a lot of work to build their electronic health record systems from scratch, per Tobias. 

Phrase’s platform looks at the tools and workflows in clinicians’ current systems, which — partly because they’re so full of safeguards to prevent mistakes or errors — don’t always operate as efficiently as they could, he said. 

“We are basically creating templates that say, ‘Here is how you would design an appropriate alert,’ ” Tobias explained. “ ‘Here is how you would design an appropriate order set.’ ” 

Phrase’s platform also shows healthcare providers how effective their electronic health record systems are at lowering readmissions and hitting other value-based program requirements. 

The goal is to create a library of templates so clients can go into the platform, choose the value based program they want to work on and start immediately, without having to build their workflows from scratch, Tobias said. First the company will translate existing projects on Outcomes into templates. Then they’ll work with clinical experts to create new templates.  

The company currently works with 15 health systems around the country, and hopes to expand. The goal is to help hospitals reap financial benefits while also providing better patient outcomes, Tobias said. 

“Improving quality is good, but [hospitals] need to pay our employees, and we need to pay to keep the lights on,” Tobias said. “We’re really trying to link doing this good informatics work to financial reimbursement and trying to scale that.”