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Small Company Moving Beyond the Battle to Cure AIDS

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Last Halloween, a handful of men danced on the fire escape of a Castro neighborhood apartment, dressed as go-go dancers, a hunky soccer player and Cher.

They could have been any group of friends enjoying the annual street party. But they were actually the staff of Ground Zero Software, a tiny San Francisco company that has achieved impressive revenue growth while contributing to the battle against AIDS.

Ground Zero, now celebrating its 10th anniversary, has gone from helping individuals with HIV manage their treatment to tracking 100,000 patients in health care systems in 25 states.

Now Ground Zero is branching out. Its two programmers are working in the company's office in that two-room Castro apartment on versions of the software that will help doctors manage tuberculosis and hepatitis, as well as other liver disorders.

With five full-time employees, including a sales force of one - 41-year-old founder and President Dan Davis - Ground Zero is far below the radar screen of dominant players in health care software like San Francisco's McKesson Corp. But the affable Davis, who likes to pad around Ground Zero's carpeted office in his socks, said his company's size doesn't stop it from competing.

``Our biggest competition is homegrown systems that (clients) try to build themselves. They'll have 20 doctors on the advisory board, and they end up getting too many cooks in the kitchen,'' Davis said.

If Ground Zero looks small and informal today, you should have seen it when Davis and co-founder John Armor started it in 1993. Both had lost friends to AIDS. While working in the office of the late Dr. Larry Waites, an AIDS specialist, Davis had noticed that patients struggling against the disease were cross-referencing reams of lab results and medication schedules, trying to answer one central question: Am I getting better or getting sicker?

Davis sold his car for $3,000 seed money and set up shop in his empty, unheated garage to try to answer that question.

With a small team of programmers working out of their own homes, Davis and Armor developed the original Lab Tracker, a PC program that created two simple line graphs. One line charted the amount of virus in the patient's body. The other charted the number of T-cells, the infection-fighting white blood cells that are attacked by HIV. The goal of HIV drug therapy is to make the first line go down and the second line go up.

Davis sold hundreds of copies of the software for $39.95. At the time, he was working a day job as a plot salesman at a cemetery, and the software business was a sideline.

Then doctors began calling.

@sh @Professional version

``Patients were taking this graph with them to the doctor's office,'' he said. Before long, doctors were clamoring for a professional version of the software. Once again, Davis came up with the capital - $87,000 from his credit cards - and an enterprise software company was born, Castro-style.

The new Lab Tracker, released in 1998, is a database that runs on clinic and hospital servers. It still creates that two-line graph, but now it can hold the treatment and lab result histories of thousands of patients. Doctors use it not just to chart individual patients' progress but to gather information for government reports and research.

Davis rented the company's current office in 2001. Before that, he'd meet visiting clients in their hotel rooms. But the company was growing fast. It became profitable in 1998, and although Davis does not disclose the private firm's revenue, he said it has grown 79 percent a year since 1999.

The company began dealing with major clients such as the Centers for Disease Control and Prevention; Louisiana State University Health Care Services Division, which runs 10 hospitals throughout the state; and the University of Miami, which uses Lab Tracker to store data for all of its 8,000 patients, not just those with HIV. In the Bay Area, its biggest customer is the Alameda Health Consortium, which uses the software for 4,000 patients across the county.

It was just critical mass,'' Davis recalled.I needed to have closer contact with project management and engineering. We were spending more time at each other's houses, and I was having to make excuses about not being able to meet clients at my office.''

The company's growth has rewarded Davis, who owns 49 percent of Ground Zero, with more than the satisfaction of contributing to the fight against HIV and AIDS. He recently bought a condominium in Palm Springs, Calif., and a two years ago he bought himself a Lexus.

Of course, having a hip office that you can walk to every morning has one drawback.

``I've only put 9,346 miles on the car,'' he said, laughing.

@sh @Annual AIDS reports

One factor driving Ground Zero's growth was the 1990 Ryan White Comprehensive AIDS Resources Emergency Act, which funds HIV research and treatment. To qualify for funding, doctors must submit to Congress a 16-page annual report detailing everything about their HIV patient load, including what medicines they are taking, their races and ages, and how they contracted the disease.

The government provides a free software program, called CAREWare, to help clinics produce those annual reports. But, said Davis, ``CAREWare is everything you would imagine software from the government would be. It's cumbersome, not easy to use, and users cannot get any technical support or customize it.''

The U.S. Department of Health & Human Services, which distributes CAREWare, did not immediately respond.

Many clinics and doctors that receive Ryan White CARE Act funding have opted to buy Lab Tracker, at $7 to $15 per patient, instead of using CAREWare, Davis said.

Two years ago, Ryan White CARE Act reporting accounted for 70 percent of Ground Zero's business. But growth has slowed in that area, now that most agencies that wanted to apply for Ryan White funding already have it. Ryan White CARE reporting has shrunk to about 20 percent of Ground Zero's business, Davis said.

The company has diversified into selling the software for other uses, including helping doctors comply with laws in 25 states that require them to report each new HIV case to authorities. A growing use that Davis hopes will account for future growth is research.

Dr. Toby Dyner, a San Francisco internist, is using Lab Tracker to chart trends in her HIV patients during the past 20 years.

Before she got Lab Tracker a year ago, Dyner said research projects were ``very labor intensive.''

``You have to go to your paper records and see if each patient was on a particular drug,'' she said. The old way, finding 20 research subjects who took a certain drug combination, might take days or weeks. With Lab Tracker, those patients can be isolated with a few clicks of the mouse.

Davis said he hopes to sell the software to pharmaceutical firms, which would in turn distribute it to doctor's offices participating in studies run by the firms. Ground Zero has worked with Merck, the big drug company, on such a study.

Dyner said there are plenty of companies selling medical record software systems. But she prefers working with Ground Zero, whose headquarters are near her Castro office, rather than with a major corporation. Ground Zero answers the phone when she calls and has added functionality to the software to suit her needs.

``That's been fabulous. There are very large companies that are trying to create electronic patient records, but the developers are often totally inaccessible to the people who are doing the work,'' she said.

That interaction with doctors on the front lines makes the work more rewarding than an ordinary software job, said project manager Chip Graham, who worked for Oracle Corp. before joining Ground Zero.

Ground Zero's work has ``direct impact on the quality of life and health for real people. This is something I never experienced at large companies like Oracle,'' Graham said.

The firm makes about half its revenue customizing and maintaining installations. It doesn't sell the home version anymore. Ground Zero still fields the occasional call from a home user, but not many.

``I'm afraid a lot of those early customers didn't make it,'' Davis said.

Some health organizations, such as the University of Miami hospital system, have started using Lab Tracker to monitor other infectious diseases. There is also a version of Lab Tracker for treating hemophilia.

Davis chose the company's latest direction, into monitoring liver diseases and tuberculosis, because those illnesses are common in two large groups of patients being monitored by Lab Tracker now: intravenous drug users and prisoners. Prisons in California, New York and Louisiana are customers. In addition, the drug cocktails used to combat HIV can cause liver problems in the long term, Davis said.

The liver and TB versions are due out in six months and nine months, respectively.


(The San Francisco Chronicle Web site is at )

c.2003 San Francisco Chronicle

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