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November 7, 2016 Issue



Secure, Encrypted Peer-to-Peer Medical Image Exchange System for Hospitals and Medical Centers



Timothy Kelley

Chief Executive Officer


Nautilus Medical


Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published - November 7, 2016


CEOCFO: Mr. Kelley, according to your site, Nautilus Medical has the most secure image exchange system on the market. Why?

Mr. Kelley: Security is the number one concern when moving medical information and it is no different with radiological images. What we built instead of the typical HTTPS upload, download, which people are familiar with to store files online. We built a peer to peer system, meaning that we send the file directly from one computer to the other user’s computer, creating its own private network, and then we added some steps beyond that, it has its own proprietary compression and its own encryption algorithm, which is never the same, pulling from file data, mouse movements, the hardware signature, and then creating the encryption, while sending a separate security key to a separate server, what they call a private key system, and then the recipient receives that separate from the data and only they can un-encrypt the data, making it virtually unbreachable, which also allows us to offer a million dollar breach policy which no one else can offer.


CEOCFO: Has the industry been paying attention to security around imaging or is that a little bit secondary to many other concerns? Where does it fall on the spectrum?

Mr. Kelley: They always say it is the number one issue - security, but many times the story told by some companies will be a ‘good enough’ kind of situation if you are meeting certain requirements, but it does not mean that it will not be breached. It is not a matter “if,” it is a matter of when some of these other storage and exchange systems will be breached.


CEOCFO: What were the challenges in creating a system that is as effective as Nautilus?

Mr. Kelley: Some of the challenges are the mission sale, where you are having to teach your potential customers the value in having some of the features we have from security, speed, ease of use, ease of implementation and more. All those combined result in our biggest challenge which is suspending disbelief that we can offer so much on a true pay per use model. There is no installation of hardware at the site; we are basically asset-less by leveraging the existing computer systems within an institution or doctor’s office and then just letting them use our software and only paying as they need it.


CEOCFO: How do you get a foot in the door?

Mr. Kelley: Generally through the most powerful method which is word of mouth. We do attend trade shows, do some press releases and attend some specialty events like continuing education conferences.


CEOCFO: Who would you typically speak with at an organization?

Mr. Kelley: Typically for the major institutions, it is a combination of IT and the radiology department, or just the radiology department, radiology managers, PACS administrators and directors of radiology.


CEOCFO: How long has the system been available?

Mr. Kelley: We released the pay per use model last RSNA show, which was last December, but we have been selling the same software as a full enterprise and integrated system for nearly ten years.

CEOCFO: Has it made a difference in the current revenue model?

Mr. Kelley: Yes, it is much faster to be adopted and we are getting to a massively underserved market of independent physicians and what we would call the lower level radiology users such as podiatrists, veterinarians, dentists, but that carries all the way up to the major institutions with cardiologists, neurologists and radiologists.


CEOCFO: You offer a number of different solutions; who is using what and who should be?

Mr. Kelley: I think for anyone looking to burn a lot of CDs and have many needs for putting information together, should still get our enterprise based systems, but anyone who is on an operating budget or is a smaller clinic or independent doctor or small doctor’s office, just downloading the free version and going on a pay per use model is great because there is absolutely no risk and it is kind of like putting a fax machine in your office. It is great if you have to send a fax every now and then, but at least you are there to receive a fax too, so if someone wants to send to you, you will be ready.

CEOCFO: What has changed in the technology? Do you do updates?

Mr. Kelley: For the most part, it is pretty well set as far as consolidating information, but we are always doing updates, adding new features to make it a more robust product, but the OEMs like GE, Siemens and McKesson have their little OEM issues that create problems with restoring images on the other end, so we end up doing constant updates to make sure as the ‘traffic cop’ of the network, when something goes from A to B, that it can be restored. Otherwise, if you just move it and they cannot use it, then you have not achieved anything.


CEOCFO: Do you know when they are making changes or do they do things like Google just spring it on you one day?

Mr. Kelley: They just spring it on us. We just had a security issue with a Windows 10 update that we had to resolve rather quickly, but it is a constant process.


CEOCFO: How do you monitor? Are you able to get to it before a customer has an issue or does someone report a problem and can jump on it?

Mr. Kelley: Yes that is how it typically works. We are in conversations with our customers every day and when something shows up, we just resolve it, usually within 24 hours, being that is a mission critical application and getting patients to faster care. If it is a trauma case issue that is no joke, so we make sure that the engineers are standing by to do fixes immediately.


CEOCFO: Is there training required? What do the users need to know?

Mr. Kelley: One of the things that we did with our latest version, and what we did starting with our first version is that we are not going to create a manual for training. The reason for that is based on our design, it should be intuitive enough that they can do complex processes without having to refer to manual, kind of like walking into a Kinko’s and using a Canon system where you need two sided color bound copies but you have never used the system before. By having macros that walk you through the next logical step, our users have never asked for a manual. We tell them if we had to print one, we failed in our design. There are no file driven menus. It is icon based. We have rollovers to identify processes and we also put in the software up to four different ways to get the same thing done.


CEOCFO: Did you realize from day one that was the best way to go?

Mr. Kelley: When I first started in the medical software business, everything was very engineer designed. The engineers made great products but as far as getting to the healthcare employees to use it in the real world setting, telling someone to click here, there, etc. and they click there and it will work, it is not very effective. We started working on the designs just after a few years and saying we have to make this much better and more intuitive for the user.


CEOCFO: How is business?

Mr. Kelley: We keep growing at a pretty steady clip about 30% a year.


CEOCFO: Are there any challenges with a growth of that nature or do you have it down pat?

Mr. Kelley: There are some challenges and there are only so many hospitals in the US. We are in 32 of the top 50 medical centers such as Cedars-Sinai, Cleveland Clinic, New York Presbyterian, Northwestern, and Harvard. There are only so many of those but radiology keeps growing at a very fast pace. Outpacing pharmaceuticals two years ago was the number one expenditure in medical care. Because of that growth, we think we have a lot of opportunity with the technologies that are still coming such as atomic level imaging to decipher what virus you have without taking a blood test. That will become commonplace.


CEOCFO: You need to be ahead of the radiology industry as well as the technology industry?

Mr. Kelley: Yes, they are definitely overlapping.


CEOCFO: Do you see an international component sometime in the future?

Mr. Kelley: When we redid the pay per use version, we localized it in 14 different languages which covers about 95% of the speaking world, with that, we do expect faster international growth. We have a fairly strong presence in Australia, Puerto Rico, Canada, Romania, and the growing in quite a few other countries in Europe and South America. In Colombia we have a very large presence.


CEOCFO: Might this be appropriate for some of the emerging countries?

Mr. Kelley: Yes.


CEOCFO: With some of the challenges doing business with some of the more emerging countries, I am guessing it might be a good fit.

Mr. Kelley: I think it becomes more critical for them because what tends to happen in emerging countries is they leap the curve. Instead of the slow progression of technologies, they are going to move right to digital X-ray because the cost is lower now and then they are going to need tools like our software to manage the distributing and consolidation of these images. We are going to become critical in those areas.


CEOCFO: Would you be working directly with the international market? Do you work through distributors or partnerships?

Mr. Kelley: At this point, we have done both, we do have distributors in some countries like Puerto Rico, Columbia and Australia, otherwise most of the sales our customers find us online and they are sold direct.


CEOCFO: Why is Nautilus Medical a noteworthy company? Why pay attention?

Mr. Kelley: I would say because radiology is touching everyone’s lives. There are very few procedures that are going to be done in the future that will not involve some level of radiology or imaging. Even stethoscopes will be something of the past in the next five years with portable ultrasounds. As I mentioned, there is atomic imaging for deciphering viruses and now you see dentists with CT machines and that trend will not stop any time soon. Radiology will be the primary source of diagnosis from broken bones to diseases for the future to come.



“There are very few procedures that are going to be done in the future that will not involve some level of radiology or imaging. Even stethoscopes will be something of the past in the next five years with portable ultrasounds.”- Timothy Kelley


Timothy Kelley

Chief Executive Officer


Nautilus Medical







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