Chief Executive Officer & Director, MASIMO CORP
Patients should decide how easily medical records can be accessed: Masimo CEO
Medical device manufacturer Masimo CEO Joe Kiani responds to medical records company Epic Systems' opposition to new ...
About Catherine Szyman
Catherine Szyman, CEO and Director of Masimo, has been involved in discussions about the company’s strategic direction and product offerings. In September 2024, she addressed the challenge of integrating the company’s consumer health business with its healthcare-focused investor base, stating that “our healthcare investors don't know how to deal with the consumer side of our business” and that the company was exploring ways to separate the consumer health segment. She also highlighted the launch of a new hospital-grade pulse oximetry monitor for infants, priced around $200 to $300, which she described as a product that could “change everything” for parents monitoring their babies at home. Szyman has also advocated for greater interoperability of medical data. She argued that patients should decide how their medical records are accessed, stating that “privacy rules were there to protect patients not to potentially harm them” and that data sharing could save lives and reduce healthcare costs. She criticized electronic health records company Epic Systems for not sharing data, noting that “we used to be in the business of hoarding our data but what we realized is that patients were getting harmed because we were hoarding data.” She commended federal officials for pushing for data-sharing regulations, saying “it’s time to share the data.”
Transcript (17 segments)
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Jim Cramer0:05
You might not know it, but America has a gigantic problem with electronic health records. There are a bunch of different companies in this industry, and their software just isn't compatible. It's not an accident; it's by design. The lack of interoperability makes it harder for hospitals to switch to a competitor. It also makes these records a lot less useful. This industry is suddenly in the news because of Epic Systems. That's a privately held company; it's a major player in the space. As CNBC's own Christina Farr reported, Epic's CEO has been writing to her hospital customers to convince them to oppose some new legislation that's designed to make it easier to share medical information. Epic wants these systems to stay balkanized. Now, in response to that, Joe Kiani, he's the founder, chairman, and CEO of Masimo, a medical technology company that makes non-invasive monitoring systems, actually reached out to us. He thinks what Epic is doing is indefensible. I want to give him a chance to explain. Mr. Kiani, welcome back to Mad Money.
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Joe Kiani1:04
Hello Jim, good to be back.
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Jim Cramer1:07
Okay, you are a great inventor, you have tons of patents, you have done a lot to make it so you're safe in a hospital. Why are you opposing something that could impinge on people's privacy?
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Joe Kiani1:14
Well, look, privacy rules were there to protect patients, not to potentially harm them. Patients should make the trade-off between what's more important: privacy or having their data available in a way that can hopefully save their lives. And that also unfortunately assumes that data privacy can't be kept. There are a lot of great companies that do a great job of making sure data can be transmitted in a way that keeps patient data private and confidential. The healthcare system could save maybe hundreds of billions of dollars over time if we actually knew what the statistics were and had the algorithms, the Amazon Web Services data so to speak, of everybody in our country without knowing their names.
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Jim Cramer2:12
Yeah, exactly.
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Joe Kiani2:13
We can get data from a hospital with a random number that they've assigned to a patient, and only the hospital has knowledge about who that number is associated with. So while you could hack into anything, it's like saying no one should own a phone or a computer because someone could hack into it. But there is protection, and what's more important is by sharing data, patients' lives can be saved.
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Jim Cramer2:42
So give us some examples of how patients' lives could be saved, so people don't think this is just abstract.
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Joe Kiani2:46
Well, we make pulse oximeters. When people are on opioids using infusion pumps, these infusion pumps can sometimes administer too much opioids. If we hoarded our data and said our pulse oximeter data cannot be input into the infusion pump, then when the patient is overdosing and our pulse oximeter is dropping like a lead from a hundred to about 80, 70, 60, that data doesn't get to the infusion pump, and the infusion pump does not shut down the flow of opioids. That's a real-life example of why data sharing is important.
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Jim Cramer3:25
All right, if I am a leader like Judy Faulkner, who probably owns Epic, it would be a possibility if you had that interoperability. She believes it would compromise patients' privacy. I'd love to have her on, by the way. But at the same time, doesn't it just preserve her incumbency?
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Joe Kiani3:48
Well, I learned a long time ago to not question people's motives. But I can tell you, we used to be in the business of hoarding our data, but what we realized is that patients were getting harmed because we were hoarding data. There's an example right near your home: a boy, 13-year-old Rory Staunton, goes to the gym like we all did, falls in a gym, gets a little scratch on his elbow. His own bacteria from his skin gets inside his bloodstream. Now he goes home, feels bad, throwing up, feeling a leg ache. They take him to his physician, and for a kid his size, his heart rate was really high. They send that kid home, thinking it could be a stomach flu or something bad he ate. He gets so bad, his parents take him to the emergency department. They do a blood draw, and unfortunately his white blood cell count was really high. They still send him home. Now, a few hours later, that boy died. Now imagine at that time, both the blood lab machines and the patient monitors that measured the heart rate all were interoperable, all could share data. Algorithms could have seen: look, high white blood cell count, high heart rate for a size, that could mean sepsis. And they could have treated him for sepsis, and Rory would probably be alive here with us today.
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Jim Cramer5:14
Do you think, Joe, that if people knew the trade-off, that it might mean life or death for them to not have any information themselves exposed personally, wouldn't they choose life?
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Joe Kiani5:26
Absolutely, I know I would. And you know what? I'm today running a medical technology company, but sooner or later I'm going to be a patient. So while I'm sitting in my role as CEO of my company, I made a pledge to share my data, and so did 90 other companies over the last eight years. Unfortunately, Epic hasn't. And I have to commend HHS Secretary Azar and ONC Director Don Rucker for now finally saying enough is enough: you guys have to share the data in a way that it's secure, it's safe, and it's not burdensome cost-wise.
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Jim Cramer6:01
Well, great. I know—I'm sorry, go ahead.
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Joe Kiani6:05
Well, I'm just going to say: imagine Epic was making refrigerators, hospitals were apartment buildings, and patients were people in the apartment with their refrigerators. Now what Epic is saying is the food you put in that refrigerator, the hospital can use it, Epic can use it, but you know what? The patient, you, I'm not sure you can use it, and nobody else can use it. Now add to that, by the way, those refrigerators were paid for by the public, by US taxpayers who paid for it. And I think finally people are saying enough is enough, it's time to share the data.
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Jim Cramer6:39
Totally agree. It's completely absurd. Then you came to this position—it's been our position for a long time. And I really appreciate your coming on. You also have a dynamite—just pronounce some really good numbers. Anyway, don't bury that lead too much. That's Joe Kiani, chairman and CEO of Masimo. Great job, sir. Great to have you on the show. Thank you so much.
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Joe Kiani6:55
Thanks for having me.
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Jim Cramer6:56
Yeah, we'll be back into the break. Don't miss a second of Mad Money. Follow @JimCramer on Twitter. Have a question? Tweet Cramer hashtag #MadTweets. Send Jim an email to [email protected] or give us a call at 1-800-743-CNBC. Miss something? Head to MadMoney.cnbc.com.