Interview with James M. Sweeney, Chairman and CEO, Cardionet

Cardionet has recently developed the first mobile cardiac telemetry service, allowing real-time, heartbeat by heartbeat monitoring of patients without hospitalization. Their ECG monitoring and analysis and response for patients provides service anywhere, anytime. The service was initially focused on helping physicians diagnose and treat patients with arrhythmia. The company, which began operating in 1999, is headquartered in San Diego, California. In February 2002, CardioNet received FDA approval for their core monitoring technology, the CardioNet Ambulatory ECG Monitor with Arrhythmia Detection, and opened its first CardioNet Service Center in Philadelphia, Pennsylvania. Cardionet Chairman and CEO James M. Sweeney has long been a leader in the health care industry. He is best known as the pioneer of the home infusion industry through Caremark, which he founded.

First of all, congratulations on your recent FDA approval. Can you tell us more about the Ambulatory ECG Monitor?

Yes, the CardioNet monitor is a vital part of a new integrated technology/service mobile, outpatient cardiac telemetry, a unique, very powerful diagnostic and patient management modality. Our initial focus is helping physicians diagnose and treat patients with arrhythmias. Our goal was to offer many of the advantages of in-patient telemetry without the need to hospitalize patients, or restrict their physical movements. In the most abstract form, what we ve developed is a wearable seismograph, which detects both felt and unfelt events, looking at each heartbeat, detecting arrhythmias, then transmitting data to the CardioNet monitoring center, which responds appropriately. The monitor examines every heartbeat, using a built-in algorithm to detect and transmit events that the prescribing physician has defined as reportable for that particular patient. The CardioNet center, which operates 24/7/365, receives the events, analyzes them, and reports the results in the manner the physician has requested through crystallized daily telemetry reports that integrate symptoms, sample ECG strips and trend data. We also provide stat reports if an event the physician has identified as a priority event occurs. If we detect a potentially life-threatening event while the patient is on service, the CardioNet center will respond appropriately. Physicians can receive or remotely access telemetry reports in the medium they prefer, via internet, fax or mail.

What patients is the product most beneficial for? Is it used only for monitoring? 

It will be used for monitoring. For diagnosis, for assessing and adjusting therapy after interventions and in clinical trials. Our initial focus is patients who are being diagnosed with or treated for arrhythmias. Our approved indications cover a wide range of patient populations. We think our technology and service will be especially useful in helping physicians identify and managing problems that may be intermittent in nature, problems that may not be detectable by the patients themselves, and with patients who may have trouble activating monitoring equipment the system detects and transmits events automatically. We have built-in some special capabilities to help in cases where event-symptom correlation is especially important for example, patients with syncope. When the patient feels a symptom, such as light-headedness or shortness of breath, they simply use the touch screen on the monitor to enter it. Another screen comes up and asks about their activity level, at which time they touch the appropriate entry. The symptom, activity level, and ECG are integrated and reported to the physician, which we hope will enable physicians to more easily rule in or rule out cardiogenic causes for symptoms.

Describe how the idea for this product came about.

Our view was that you could dramatically improve the state of the art in outpatient cardiac monitoring by integrating it with communications and information management technologies that were proven GPS, cellular technology, radiofrequency signals and so forth. It s simply focusing technology on providing physicians with the right information, at the right time, in the right place, in the right format. We ve been fortunate in that we have an exceptional group of medical advisors to guide us, including three past presidents of NASPE.

I saw that Dr. Eric Prystowsky is on your board as well.

Yes, both on our Medical Advisory Board and our Board of Directors. On our MAB, we also have Dr. David Cannom, who was NASPE President before Eric, and Dr. David Benditt, who I believe served as NASPE president two years before Dr. Cannom. We also are fortunate to have Dr. Eric Topol from the Cleveland Clinic, Dr. Craig Pratt from Baylor who is extremely active in the clinical trials area, and Dr. Tony DeMaria from UCSD, who is Editor of The Journal of the American College of Cardiology. So, we have a really remarkable group of physicians advising us who have been very thoughtful in helping us define patient groups, monitoring parameters, service center response protocols, and in guiding our product development. They are an extraordinarily activist MAB. Our initial focus on patients with arrhythmia and on the design of the reports we provide to physicians, are really the result of their advice.

\You received FDA approval in February. Have you opened any more service centers?

We have opened our first CardioNet service center in Philadelphia. We would like to work intensively there for the next six months to make sure the elements of the service are exactly what physicians, patients and payors want. Once we re satisfied that the technology and service are on target and have data to demonstrate the clinical and economic value we bring, then we ll start to replicate these centers around the country. However, initially we ll be servicing patients in the Philadelphia area, expanding to other parts of Pennsylvania and the surrounding states.

Describe Cardionet's background.

The business as you see it today was founded in 1999, but its origins go back a few years earlier to two talented scientists who were more focused on the emergency response capabilities that a mobile cardiac monitoring system could offer, which is still an area of interest for us. I later became involved, made an investment, named the company CardioNet and focused our efforts on the diagnostic and patient management area. We have picked 1999 as the year of our founding, because before that point, CardioNet was in the lab without any capital.

You have been in the medical industry for a while. You were considered a pioneer in the field of home infusion.

Yes, I founded Home Health Care of America, later re-named Caremark. Our idea, which was radical at the time, was to find a way to allow stable patients, then hospitalized for months, so they could receive total parenteral nutrition, return home, and sometimes return to work or school while they continued to receive the therapy they needed to keep them alive. Essentially, it involved the creation of a hospital without walls, where patients received nursing, pharmacy, and monitoring services that had previously only been provided to inpatients. We started with home parenteral nutrition, and within a few years, we were providing home intravenous antibiotic therapy, chemotherapy, pain management, eventually even therapies such as intravenous dobutamine therapy, which at one time had only been administered in intensive care units. Our company eventually evolved into a multi-billion dollar business for three reasons: physicians found they could rely on our quality, patients strongly preferred to be treated at home, and we could show payors that we could enhance quality and patient satisfaction while dramatically reducing costs. I think there is a similarity to what we are trying to do here: find ways to provide many the diagnostic, response and safety net advantages of inpatient telemetry to physicians who are managing patients in the community. I think that once physicians become familiar with the capabilities of outpatient telemetry, they will tell us where we should next take the service, just as they did with home intravenous therapy.

I see that you stress Cardionet is a service business.

Yes. We developed the technology so we could offer the service. Our focus will be on developing relationships of trust with physicians, so they know they can rely on us. It s just like it is in the hospital: there is a network of technology, of professionals, of expertise that allows physicians to remotely manage their hospitalized patients without physically being there 24 hours a day. The physicians want us to collect data, slice and dice it, and present them with exactly what they want to see at the time and in the format they want to see it. The service aspect the excellence of the cardiac techs, the responsiveness of our staff to their patients, is critically important to them. One of the constant problems with outpatient monitoring has been compliance. Again, harkening back to my home intravenous therapy experience, I can say that enlisting patients as a part of the team treating them with respect, making patient education a core company competency, designing equipment that is easy to use, for anyone at any age is critically important.

The advantage with Cardionet s product is that the patient can wear it and forget about it.

Yes, we detect and transmit the events whether patients feel them or not. On the other hand, if they feel a symptom, they can report it simply by touching the screen of the monitor.

In what ways can the physician customize the data?

Physicians can customize both the monitoring parameters and response protocols for each individual patient, if they wish, or select the standard parameters and protocols developed by our Medical Advisory Board. In addition to the crystallized data on the reports, physicians can request expanded data around a particular event, because we are monitoring each heartbeat, 24/7.

What is the future for Cardionet and its products?

We hope to be viewed as a company that is clinically driven, in other words learning as much as we can about different patient populations, then focusing on monitoring applications that help physicians significantly improve outcomes, diagnose patients earlier, manage therapies more effectively; improve compliance. We will be integrating electrocardiogram data with other biosensing technologies and data from implanted devices, using artificial neural networks to tease vital information out of masses of data, helping hospitals and health systems remotely manage chronically ill patients. We will be working with many different partners, both in this country and internationally.

Are you currently working on other projects or products? No. I borrow from the real estate dictum about location, location, location, in saying that the most important thing with a new company is focus, focus, focus. I am very excited about what we can do by focusing on this opportunity. Every physician I have talked to so far has had the same response. After we explain the service, it's as if a light bulb comes on and they say, Okay, I get it. If you can do that, I have got a lot of patients for you!