Last month's release of "Optima Homecare" (HCTR 10/19/16) was not merely the familiar story of another garage programmer helping out a buddy in the business, later deciding to put his homemade home health EMR software on the open market. Optima Healthcare Solutions had already made its way to the top of the therapy provider software market, boasting customers the likes of HCR ManorCare, Brookdale Senior Living, dozens of regional and national rehab facility organizations and hundreds of contract therapy companies.
Intrigued by an initial glimpse of the new product and by the caliber of the people whom Optima had attracted to design it, market it and sell it — all industry veterans we had already come to know and respect over the years in their previous companies — this reporter decided to motor down to Palm City, Florida to meet the founders and hear their story. It was not the expected story but it is one worth telling!
Chance meeting, lifelong partnership
Steve Mackie is a devoted, lifelong surfer. Raised in south Florida, he had traveled the world in search of the perfect wave. One night in the early 80's, after putting away his board for the evening, he met single amputee Randy Wallin at a party, "back when we both had hair," Mackie laughed. Initial admiration evolved into a friendship until one day Wallin confided that he missed surfing terribly and would love to find someone who would help him get back on a board, even if he could now only ride in a kneeling position. "I'd be honored to be that person," his friend told him. Endless hours on the water required at least a little financing so the two went into business together, in their spare time.
Surfboard to Boardroom
The journey from avid surfers to software developers was initiated, twice, by the new Mrs. Mackie, a relationship that came after, but did not replace, the bond between the two friends. When their first child arrived, the young couple decide one of them should earn a living and the other should stay home with the baby. Unable to decide who should take which role, they literally flipped a coin.
"I won," Steve laughed, "so 'got to' go to work and she stayed home. Randy and I started a business consulting firm, which was perfect because it provided an income and the freedom to hit the waves almost as often as we used to. My wife, who was a nurse, told me about a new data collection system, Minimum Data Set, required of Skilled Nursing Facilities, and suggested I write some software to automate the process whereby nurses collect the data. I told her I wasn't interested in working with old people and that I wasn't really a programmer."
Not surprisingly, he admitted, his wife prevailed. "I had done a little database programming so, to keep her happy, I grabbed a copy of FoxPro and managed to develop a DOS system that worked well for my wife's friend in the SNF. After we demonstrated the finished product, he liked it so much he asked to buy it.
"'Buy it?' He was my wife's friend and I thought I would give it to him as a favor to my her; I had never thought about making money on it. How much do I charge? Do I have to support it? What if the MDS changes? In the end, he didn't have 'a' SNF; he had 24 facilities located throughout the East, headquartered out of Buffalo, New York. I decided to sell it to him."
Turning a simple FoxPro application into a marketable product required a software tool that Mackie and Wallin did not have and did not know how to build. So, using the technology of the time, they scoured Usenet bulletin boards until they found someone who had already developed it. "It was a marvelous little tool that we could download for free but we wanted to use it commercially so we thought we should get permission and pay for it," Mackie told us. Getting that permission initiated a fateful series of events.
"We found a phone number for the developer of the tool," he grins as he remembers, "and were greeted by a pleasant female voice."
"Yes, this is Ryan Katri's number but he is in school right now."
"Oh, he's still in class? What college does he attend?"
"Well, he's not in any college."
Steve and Randy looked at each other. "The tool that is going to save us was written by a high school kid?"
"No," his mother said," he is in junior high. Ryan is 14."
The end of the story, which today is legendary in Optima hallways and part of every new employee orientation, is that young Ryan Katri finished junior high, finished high school, got a degree from Cal Poly, and is now married with children, and is the Chief Technology Officer for Optima Healthcare Solutions.
Ryan's brother Michael was also brought aboard as the first salesman and is now Chief Product Officer. It was Michael who saw their therapy customers opening or acquiring home health agencies and suggested developing another software product for them.
And then we fell in love
Mackie and Wallin did figure out how to price, implement and support their FoxPro MDS system in the Buffalo SNF's 24 locations, and installed the product in over 100 SNFs. It was updated when MDS 2.0 was released in 1995. In 1999, it was moved to Visual FoxPro and subsequently to Microsoft .NET.
In 2000, they were asked by another customer to build a therapy product for them. When MDS 3.0 appeared 10 years later, they opted against another re-write and sold their MDS business to PointClickCare. That was when they changed the company name from "GiftRAP" (for "Resident Assessment Protocol") to its present name and focused their attention on the therapy market in SNFs and ALFs. Since that day, Optima has soared, providing software to more than half of the residential therapy market. To get to that level of success, however, Mackie said he first had to fall in love with the elderly.
"It was during a site visit to West Palm Beach when I admitted that I never really intended to work with old people," he reminisced. "The owner there told me we needed to fix that. 'Go sit with them,' he insisted. 'Talk to them, listen to their stories.' So I did, and I was transformed. They were not just elderly people; they were people with incredible life stories. I talked to WWII heroes. I met the man who invented Tylenol! I-fell-in-love. Being a part of the team that brings them services, makes their caregivers more efficient and profitable, was very rewarding. That's when we knew we were absolutely doing something worthwhile here. That experience has fueled our company's passion ever since."
As the post-acute market continued to shift over the years, the founders knew they could do more to serve post-acute providers, including in-home healthcare providers. Though the final chapter may not have been written yet, those that are written resulted in the company's home health EMR product launch at last month's NAHC Annual Meeting.
About 2005, Mackie and Wallin realized how vital the Katri brothers were to the business' future success. They had been integral to the success of the product and growth of the business, Michael driving product design and Ryan stewarding the underlying technology. Naturally, they made them partners. Recently, the team of equals that now numbered four surfers (and skiers) realized they were at the point where further growth required capital, they set about finding investors who could match their passion for the elderly. After more than 100 interviews, they found that match in Alpine Investors, a San Francisco private equity management firm that specializes in founder-operated companies. Alpine brought in Josh Pickus as CEO. Mackie took the title of Chief Customer Officer and Wallin, Chief Security Officer. Ryan and Michael Katri continue to drive the product.
As minority owners, Mackie concluded, the passion of the founders remains unwavered, "but we four partners and friends will always find time to take our boards to the beach — or hit the slopes together in winter — all the while making sure Optima continues to develop great software and treat customers as friends."
©2016 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission only. firstname.lastname@example.org