Transcript: Adrian Gropper, CEO Amicas, Inc. 2/28/98, History pre-Amicas

Audio Tape 1 of 1

A: [In the eighties] MGH became interested in commercial ventures, spin-offs that they would create and send on their way. They did three of them that I know of. Maybe more, One of them was a Nursing home type operation, one of them was a home care pharmacy, you know home infusion therapy, and the third one was this thing called Rstar which was a PACS vendor kind of thing.

C: were they not doing commercial things before or was there something new about this?

A:I think that there was something new about this, this was like a go-go eighties thing a few years later. Remember this place, was and always has been a not-for-profit with a deeply held charitable and educational mission and for them to be sort of spinning off commercial ventures was a kind of a political sign of the times, or whatever. They pumped a number of millions of dollars into Rstar, more than a few, I don't really wanna know how many, they pumped even more than that into the other two, at a time when places like BU were getting into the paper with doing similar shenanigans. The other two ventures were quite successful and what they discovered as they were doing this, was that whether they were successful or not, either way it was bad for the hospital business.

If they lost money they were misusing charityŠif they were making money, they were

C: Being for profit, kind of a lose-lose situation?

A: Šyeah, so it was a lose-lose situation, these things both, when I learned of this term called "The Globe Test" If your story gets published in the Globe, whatever they say about you you're not likely happy to see it. Rstar was the third of these ventures, I don't know at what level of the administration was promoted. At the point that I joined Rstar, about half of these guys were there, half were there before me and half came afterward. Lets leave it at: the chairman of the hospital and the second in command had moved over to become president andŠ of Rstar. Whatever the relationship or their hope was for commercials, just this transition of top management. Now its true that the chairman was going into semi-retirement with this move, it wasn't a career move or anything necessarily but still,

C: rather symbolic retirement move.

A: So anyway, the reason this part of the history is important, is that's how I ended up there to begin with, because I was doing something much more traditional, looking to fund a lab type thing under the auspices of radiology departmentŠ And when this management shake up of this thing they had funded and didn't like the way things were going, so the powers that be at the radiology dept took over Rstar, I was one of the beneficiaries of this technical flood into that operation, as a consultant. And a couple of others administrators and a clinical director type also moved over. That business had been in the PACS business, in other words the kind of stuff that Agfa is doing here. The opportunity the business that the new management wanted to go into was telemedicine. They were going to leverage the relationship with MGH [garble] and resell it as a service. They were absolutely not interested in a product.

C: just reselling services?

A: yeah

C: was it explicitly international at that point or was itŠ

A: yes.. they were trying to do both, they were trying to set up and manage a national consortium and provide international services. So its not necessarily that they were trying to go after other markets nationally, but it had a national scope in that they envisioned a consortium of a few institutions. And then reselling that Š. so they were trying to eat their cake and have it too, they wanted to have a branded consortium, but also by selling the brand of the MGH/Harvard clevand clinic etc. piggy back on those things. With kind of the understanding was that places like MGH and cleveland clinc were too lame to market their own brands. Would benefit from the go-go management of Š this I had no problem with, It was a perfectly reasonable thing [garble] my business. the thing that I had an increasing problem with, as did all of the technical people there, was that these people didn't want to build a service, didn't want to build a product, they basically saw technology and the people who actually created technology as infrastructure

C: infrastructure that was gonna be inevitable? didn't need to be developed?

A: well just infrastructure, it was like you know, it was maybe a step above the janitorial staff, but it was a commodity. Okay. And you know, to them having to build up engineering or technology infrastructure was basically just a pain in the butt. Cause it couldnıt grow. Remember they're trying to sort out financing, building a consortiums, sell branded services, growing an operation from 30 people to 60 people to 90 people to develop technology was just holding them back. Some of them were that boorish about how they approached the staff, and some of them were a little bit more subtle, but it didn't take Š even somebody as thick-skinned as most engineers could understand where these guys Š and there were some amazing company meetings. needless to say these people pissed off a lot of people.

C: Now are these all doctors?

A: Oh no. None of them were doctors, well Buchanan was a doctor, Buchanan was the original chairman. No some of them were literally, wellŠ the one thatıs in jail now, this guy uh what's his name, oh I'm blocking on his name now: [to Jonathon:] What's our favorite jailbait's name?

J: Who?

A: From Rstar

J: Susan?

A: no jailbait, in jail stillŠ

J: Ohhh Ferber!! Both: Mark Ferber

J: Adrian, jailbait usually refers to an under-20 femaleŠ[laughter]

A: well I remember who you thought of, jonathan, I remember her [laughter]

J: You don't know howŠ[laughter]

C: I have to warn you, jonathan, this is all on tape.

J: [discussion of susan]

A: Uh, yes.

C: So they were not doctors at all..

A: No this guy is basically in jail for doing one of the biggest bond swindles conflict of interest swindles in public financing history. He was taking money from both sides, this is the guy who was brought in by the chairman of the hospital and he had been the guy responsible for the bond issue that put together the Charlestown operation. That was small potatoes, this was MWRA bond issue. He's still in jail as far as I know. Anyway this guy was co-chair of Rstar, the other guy was, the other guy got fired, the guy who was the president at one point. Uh CEO, all around the same time, got fired from the hospital , same thing with [garble] for having some contractor work on his house. and buchanan basically was semi-retired. In any case the fourth guy on the totem pole was the medical director, he has moved on, and the fifth and sixth guys both left. So there's only one of that entire management from the hospital still left over there at this point.

C: was that ATI?

A: that became american telemedicine international. The service was goining to be ATI. Problem was that even though these guys had really stellar credentials and a greed factor that would make everybody's eyes tingle, for whatever reason were still unable to raise the money, they couldnıt figure out on the other hand had never been able to make their service model work. for many many good reasons which I don't need to go into, but obviously from the point of view of somebody like me and Sean and stuff, it made perfect sense why these people weren't gonna do well, they [ break] so all of the technical talent was basically gone. there was no lab, no bodies, no stuff, they had poured in millions of dollars and all of their people and their energy into this thing so that it sort of dribbled out. so thrall had a visionŠ

Last Modified 11-Sep-99 9:35 PM ckelty@mit.edu

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