New venture aims to fill customer-service void in healthcare

By Jonathan Weber

(Reuters) - Three large U.S. venture capital firms are betting that hospitals will buy into a new service designed to help healthcare providers treat their patients more like upscale hotels treat their customers.

The new company, called Docent Health, is creating software and mobile applications that will help organize and monitor every aspect of an individual's hospital visit, and marrying that technology with specially trained staff who will be in constant communication with patients about their needs.

The goal is to improve the often-miserable hospital experience while helping the institutions increase customer satisfaction and win repeat business, said Chief Executive Officer Paul Roscoe, a veteran healthcare entrepreneur who sold a previous venture to Microsoft Corp.

Bessemer Venture Partners, New Enterprise Associates and Maverick Capital Ventures have invested $2.1 million in seed funding in Docent. The three venture partners involved in the deal - Steve Kraus of Bessemer, Mohamad Makhzoumi of NEA and Ambar Bhattacharyya of Maverick - have worked together many times, and all said they expected to provide substantial additional capital for the company as it develops.

Originally conceived by New York-based executive search and healthcare investment firm Oxeon Holdings, Docent aims to capitalize on two massive changes now sweeping the healthcare world: the shift toward paying providers for keeping people healthy rather than performing procedures, and the technology-driven "consumerization" of health that is putting more decision-making in the hands of patients.

When Docent was described to them, some advocates for "patient-centered" medicine were cautious about how much could be accomplished by focusing on the non-clinical aspects of hospital care.

Roscoe noted, though, that even high-quality facilities with impeccable clinical care often generate "negative brand loyalty" by failing to communicate effectively and empathetically with patients and truly understand their needs and preferences.

"Great clinical care plus a great experience equals patient retention, loyalty and patient advocacy," Roscoe said.

If Docent is to accomplish its avowed mission of providing VIP service for everyone while improving hospitals' financials, it will have to show that it is more than just another concierge medical service for the wealthy.

Healthcare entrepreneur and patient advocate Alexandra Drane expressed concern that Docent's approach could end up exacerbating inequality if hospitals only offer the service to certain patients.

"Alex the individual would love a VIP option," Drane said, "but Alex the citizen and activist worries it will only drive more of a schism between the haves and have-nots."

But she added: "I think what most people are really looking for when they think VIP is empathy, transparency, kindness, proactive information-sharing and respect ... all things that could and should be ubiquitous, without tremendous expense."

HOSPITALITY MENTALITY

Oxeon, which has investments in about 70 companies, remains the majority shareholder in Cambridge, Massachusetts-based Docent, the first startup to emerge from its venture studio, said founder Trevor Price.

Created to capitalize on the ideas and data that are gleaned from the executive search business, the studio has five people who work full-time creating business plans for possible new companies, Price said.

"The shift from physician-centric to consumer-centric care delivery and building a longitudinal relationship with patients - that process is the single most-talked-about trend in healthcare," Price said.

At the center of Docent's concept is the idea of the "patient journey," which starts before someone gets to the hospital and ends long after he or she leaves. A cloud-based software platform enables both caregivers and patients to stay informed, log their preferences and provide constant feedback.

The special staffers will come from the hospital, Docent or both, in a mix that will vary depending on the deal.

New York's Hospital for Special Surgery has signed on as the company's first customer, and Roscoe said he expected several other nationally known hospital groups to join soon.

Docent's founders refer frequently to best practices from the upscale restaurant and hotel industries, where customer preferences are carefully tracked and anticipated with an eye toward future business.

Susan Reilly Salgado, head of the consulting arm of restaurateur Danny Meyer's Union Square Hospitality Group, said about 25 percent of her clients were from the healthcare industry, which she said was particularly retrograde when it comes to customer service.

"All customers want the same thing," Salgado said. "They want to feel valued and respected."

(Reporting by Jonathan Weber.; Editing by Eric Effron and Lisa Von Ahn.)