An edited version of this story ran in the print edition of
Dr. Steven Liu, founder of Ingenious Med as well as the original creator of Ingenious Med's flagship software solution, is the recipient of Modern Physician
's fourth annual Physician Entrepreneur of the Year Award
For 10 years he was the company's CEO and president and now is executive chairman and chief medical officer.
Liu, 41, who continues to practice as a hospitalist physician in San Diego, parlayed his experience into a multimillion-dollar business whose devices are now in the hands of more than 9,000 users in more than 800 U.S. healthcare facilities.
The road to his current success was not always a clear path, however. When Liu was an undergraduate at the University of Virginia in Charlottesville, he was studying engineering, a field in which he did not want to pursue a career, and he describes himself back then as a bit of a “wild child.” The very things he viewed as liabilities at the time—an engineering degree and the tendency to take risks—have, in fact, turned out to be two of the critical factors in his success as an entrepreneur.
His parents, who immigrated to the U.S. from China, were both engineers. Liu says he felt pressure to follow in their footsteps. “I think being second generation from an Asian family, you kind of have to break the ice and figure out your place in the world, and figure out that there really aren't any barriers out there.”
In his final year of college, Liu decided he wanted to be a doctor. So, he buckled down, improved his grades and devoted himself to acing the Medical College Admission Test . “If something is really important, you don't want to shortchange yourself,” he says. “I knew medicine was really important to me.”
Liu's hard worked earned him a spot at the Medical College of Virginia in Richmond, and later an internship and residency at Barnes-Jewish Hospital at Washington University Medical Center in St. Louis. In 2000, during the last year of his residency, Liu made a purchase that ultimately would change the course of his career: He bought a Palm Pilot.
“I was one of the first ones to buy it. I'm kind of geeky, techy guy,” Liu says. “It seemed like a great thing to use just for my own residency.”
At a time when most of his peers were documenting their work on 3-by-5-inch note cards, Liu started to use his Palm Pilot to track patient visits and services performed for billing purposes. One day, Liu found one of his colleague's lab jackets with an old stack of those note cards in the pocket. The doctor had forgotten to submit the charges, and as a result, the hospital lost about $150,000 of revenue. At that moment, Liu knew he had to create a technological solution to help his colleagues to more efficiently track and bill their work. He recalls talking to his family about his idea and his fear that he had no business experience. His parents encouraged him to pursue his goal.
“When I think back on my life and all the pivotal moments, that was one of them—having that discussion with my parents,” Liu says.
Armed with the engineering and computer programming skills he thought he'd never use, Liu set out to create a handheld and desktop software solution that his fellow physicians could use to automate charge capture and the billing process. After his residency, Liu was tapped for a job as the director of the hospitalist group at Emory Eastside Medical Center, Snellville, Ga., and also became the director of medical informatics at Emory Hospital Medical Group. He recruited Dr. Mohan Gounder, Dr. Geoffrey Marx and Dr. Jason Stein, all colleagues of his at Emory, to work with him on the fledgling software product.
“In beginning, I used to write code until 4 or 5 in the morning,” Liu says. “We basically boot-strapped the company, working during off-hours and putting in money from our own salaries.”
In 1999, Liu and his colleagues officially formed Ingenious Med, providing their newly created charge capture and billing software to only a few dozen physicians. Liu says he knew he was taking a risk by deviating from the traditional career path of a physician. But he had taken a similar risk seven years before when he decided to pursue medicine in the first place—and he says he knew this was something he simply had to do.
“We did it because we really believed in the product and the company,” Liu says. “We knew it was something special. It was one of those no-brainers—you just do it.”
There were plenty of 100-hour workweeks, few vacations and a lot of “sweat equity.” But Liu says the buzz about his easy-to-use product spread quickly among hospital physicians.
“There was a huge market (of hospital physicians) that was growing really fast and they were starving for this sort of solution,” Liu says. “I had this market that was in tune with what I was creating and needed it immediately, so I built a user base very quickly.”
Today, Ingenious Med has about 9,000 users in more than 800 healthcare facilities across the U.S.
Ingenious Med customer Dr. Mitch Wilson recalls he first met Liu at a conference where the young entrepreneur was demonstrating his new software application. “I thought, ‘Wow, that is really cool, and that is what we really need,' ” says Wilson, who is the chief medical officer for Eagle Hospital Physicians, a multistate hospitalist program management, consulting and staffing company.
In 2002, Wilson accepted a position at University of North Carolina at Chapel Hill, where he was tasked with setting up a hospitalist billing system. He immediately thought of Liu and Ingenious Med. Wilson says his physicians' capture rates hovered around 80% when they were tracking on paper. When they switched to Ingenious Med's software, he says that rate jumped to 99%.
“From where I sit, it's really a vital part of the care we bring to patients,” Wilson says. “I can say Ingenious Med is a best-in-breed product when it comes to convenience, performance and charge capture.”
When Wilson joined Eagle in 2008, he brought Ingenious Med with him. “It was because of Eagle's commitment to provide quality of care and to be efficient, and we realized Ingenious Med could help us bring added value to our client hospitals.”
In the early years of Ingenious Med, Liu and his co-founders had to handle every aspect of the business themselves—from writing and testing code to making sales calls and writing marketing materials to doing tech support and managing employees. “We had to do a lot of proactive learning,” Liu says. “I read all of the business books I could get my hands on. (Starting a company) is kind of like getting your own mini-MBA.”
Things began to change for Ingenious Med around 2005 when Mark Buffington, a managing partner at Atlanta healthcare IT investment firm BIP Opportunities Fund, heard about the software startup. Buffington says he decided to look into Ingenious Med at the advice of an advertising agency that had done some work for the company.
“What I was struck by was (Liu's and his colleagues') conviction to providing an application that served hospitalists,” Buffington says. “When I visited hospitalists, they said they used (the Ingenious Med software) every day. One of them told me, ‘You couldn't pry it out of my cold dead hand.' ”
That colorful testimony convinced Buffington to take a closer look at Ingenious Med. As he got to know Liu, Buffington says he became convinced that Ingenious Med would be a wise investment.
“What is great about Steve is he is an entrepreneur and he takes risks, but he also is an excellent listener. He is very contemplative and thoughtful—that is really the best of both worlds,” Buffington says, who is also an Ingenious Med board member. “Once we got capital behind him, he really accelerated.”
With an infusion of $7 million of capital from 2004 to 2011, Ingenious Med has grown from just a few employees to a staff of nearly 70 people, and revenue has grown by more than 300% over the past three years. As his company matured, Liu got married and made plans to move to California. He knew he could not continue to manage Ingenious Med in the same manner from a remote location, so he decided to hire industry veteran Hart Williford as CEO in 2008.
“We really clicked and I knew I needed to put in a CEO to take my place,” Liu says. Liu travels frequently to Ingenious Med's Atlanta headquarters and remains actively involved in the day-to-day operations of the company as chairman.
Williford has held executive-level positions at companies including IBM, AT&T, VeriSign, NCR, Kirchman Corp. and Morris Technology. He says he has worked with several entrepreneurs to take companies from the startup stage to maturity—and he made a calculated decision to join Ingenious Med.
“I interviewed Steve and Steve interviewed me,” Williford says.
Williford says the opportunity at Ingenious Med appealed to him because he and Liu have similar management styles. Today, Williford says the two are close friends and work “hand in glove.”
Williford describes Liu as “a passionate leader.” He commends Liu for having the insight to hire seasoned executives to help grow the company, but Williford says Liu's continued hands-on involvement is one of the things that sets Ingenious Med apart from its competitors.
“Probably the No. 1 thing that differentiates us is what Steve originally put into the company—we are physician-led and physician-driven,” Williford says. “No code goes out of this place that Steve does not have his hands on.”
Meghan Streit is a freelance writer based in Chicago. Reach her at firstname.lastname@example.org.