Medsphere Systems Raises $12 Million

Medsphere Systems Corp., a Carlsbad, Calif.-based provider of open-source healthcare enterprise solutions like electronic health records, has raised $12 million in combined private equity and debt financing. Backers include Azure Capital Partners, Epic Ventures, Thomas Weisel Venture Partners and Western Technology Investment.


Medsphere Systems Corporation, the leading provider of open source healthcare enterprise solutions, today announced that the company has secured $12 million in financing to support ongoing development and expansion efforts in the health IT sector. Hospitals are adopting Medsphere’s OpenVista® electronic health record (EHR) solution to improve clinical care and rapidly qualify for federal stimulus funding via an accelerated implementation and adoption process.

“The nationwide push for healthcare reform and the focus on electronic health records as a key component in reform are having a measurable impact on health IT demand,” said Irv Lichtenwald, chief financial officer at Medsphere. “We are delighted that Azure Capital Partners, Epic Ventures, Thomas Weisel Venture Partners, Western Technology Investment and a host of physicians and other private investors recognize Medsphere’s unique ability to rapidly transform the healthcare industry.”

Hospitals must demonstrate by 2011 that they have implemented EHR solutions that improve clinical care to be eligible for financial incentives as part of the $19 billion investment in health technology included in the federal American Recovery and Reinvestment Act (ARRA). Medsphere is committed to implementing OpenVista in a fraction of the time required by proprietary EHR vendors, enabling facilities to maximize available federal funding.

OpenVista is the commercialized version of the VistA EHR created and developed by the U.S. Department of Veterans Affairs (VA) over 20 years ago. VistA has been a key component in the VA hospital system’s recognition as a national leader in quality patient care. Because it is an open source solution, OpenVista can be implemented at commercial healthcare facilities much more quickly and cost-effectively than comparable proprietary solutions. With OpenVista, Midland Memorial Hospital, for example, was able to achieve established levels of automated patient care and clinical process improvement in less than half the time and at roughly one-third the cost of other vendors. Midland has also realized a host of improved clinical results, including fewer patient deaths and medical errors, and decreased infection rates.

About Medsphere and OpenVista

As a disruptive force in healthcare information technology, Medsphere is revolutionizing the industry by delivering commercially supported open source software based on the U.S. Department of Veterans Affairs’ proven VistA EHR. The product of 20-plus years of development and more than $8 billion invested, VistA enabled the transformation of the VA into the nation’s most efficient and clinically effective healthcare organization. Currently VistA contains roughly 2.1 billion clinical documents, 2.76 billion orders and 1.51 billion images. As the commercialized version of VistA, Medsphere’s OpenVista is a portfolio of products and professional services for hospitals, clinics and integrated delivery networks. OpenVista is currently used by over 20,000 individuals, including 2,500 physicians and contains hundreds of thousands of medical records. Medsphere addresses healthcare’s capital constraints through an innovative business model:

— A unique subscription-based pricing model minimizes upfront costs.
— The Healthcare Open Source Ecosystem and portal
coordinate a unique grassroots community of customers/subscribers, partners
and developers driving OpenVista innovation and providing a parallel
development and support structure.
— Medsphere’s experienced team of healthcare technology professionals
and unique suite of implementation tools deliver a fluid transition to a
comprehensive healthcare information technology solution.

Medsphere clients include Beauregard Memorial Hospital in DeRidder, Louisiana; Blue Mountain Hospital in Blanding, Utah; Lutheran Medical Center in Brooklyn, New York; Memorial Hospital of Sweetwater County in Rock Springs, Wyoming; Midland Memorial Hospital in Midland, Texas; Silver Hill Hospital in New Canaan, Connecticut; West Virginia Department of Health and Human Resources (WV DHHR) hospitals; and the federal government’s Indian Health Service. For more information, visit and