As president and CEO of a rising new medical informatics company, Stan Pestotnik's duties are many and varied. In addition to his usual executive tasks, he is chief fundraiser and contributes to the company's sales and product design.

"And I go to Costco to pick up supplies," he says with a laugh. "This is a company of 30 people, but the majority are software engineers. They can't go to Costco. They're working."

Don't let him fool you.  Pestotnik isn't lounging about TheraDoc, the Salt Lake City-based company he helped form in 1999.  He has been working hard for as long as he can remember.  Formerly a pharmacist, he went on to earn his master of science degree in medical informatics. For the 15 years prior to co-founding TheraDoc until now, his life's mission has been to implement clinical decision support systems in hospitals with the goal of reducing medical errors, lowering treatment costs, and improving the quality of patient care.

Although the company has been operating for less than three years, TheraDoc's future looks promising with 2003 revenues projected at somewhere between $5 million to $l0 million, and expectations of profitability by third quarter of 2003.

Pestotnik reflects on his company's growth and Utah's life sciences industry from his spacious windowed office at the 257 Tower, former home of the Salt Lake Organizing Committee.

Wasatch Digital iQ:  Tell me a little about the other three TheraDoc founding partners.

Stan Pestotnik:  Dr. John Burke is chief of infectious diseases at LDS Hospital and he and I have been research colleagues since '85. Dr. Merle Sande, former chairman of the University of Utah Department of Internal Medicine and a leading world authority on infectious diseases, knew of our work and was very supportive and interested. I was a former grad student of Mark Skolnick's who was one of the founders of Myriad Genetics and a serial entrepreneur. He was the only one of us with entrepreneurial experience. The rest of us were academicians.

DiQ:  Walk me through a simplified version of how TheraDoc works.

Pestotnik:  Our software links together all the information systems in a hospital containing patient data and combines that with the latest medical knowledge available. Then it gives the physician or nurse treatment suggestions. It's not designed to replace the physician, but  to supplement their knowledge and make them better doctors.

The good majority of hospitals in the country right now already have computer systems with all of a patient's data in them, but they don't talk to each other. When you go to the hospital, you're admitted and registered into a computer that records all your demographic data. Then someone draws your blood and inputs the results in the lab's computer. Then you might get a chest X-ray and those results go in the radiologist's computer, then you might get drugs with that information fed into the pharmacist's computer. The doctor never gets a clear view of all your data. TheraDoc pulls it all together and gives the doctor a comprehensive view.

DiQ:  That's interesting. I don't remember seeing computers when I was in the hospital. I only remember flip charts with scribbled notes.

Pestotnik:  Those charts are actually generated from a computer in the first place and the only things written on them are the doctor's daily notes and orders. But there's a move in this country to eliminate writing on charts due to medical errors and have all patient data captured electronically. This was spurred by a book published in 2000 called "To Err is Human: Building a Safer Health System." The book claimed that medical errors are the eighth leading cause of death in the United States, more than from breast cancer or heart disease. And the number one error is medication errors, specifically misuse, overuse or under-use of drugs.

DiQ:  I understand that the University of Utah Hospital was the first medical institution to install your technology.  How is that working out?

Pestotnik:  It's being used in the surgical care intensive care unit, the medical intensive care units, and by the infectious disease and infectious control team. In our opinion and based on interviews done with those using it, it's been a successful implementation and the software is demonstrating its benefits.

DiQ:  Do you have any way of quantifying that?

Pestotnik:  Since being installed in June of 2000, it's improved the accuracy of documentation, reduced errors and improved financial performance. For example, our software has reduced the time it normally takes the ICU doctors to be aware of critical lab values by three to four hours during the day and as many as 10 to 12 hours at night. It has also saved the surgeons one hour every morning in gathering the necessary data to make their daily treatment decisions. We've been quite thrilled. The surgeons at the U have been some of our biggest champions, which is gratifying because surgeons tend to be the most skeptical.

DiQ:  How has TheraDoc been funded thus far?

Pestotnik:  We've been funded by private investors, high net- worth individuals who have continued to stay the course with TheraDoc. We're now beginning to bring in revenues which will help fund the company, but I'm always looking for additional institutional funding because the next step is the execution of the business model and growth. By the end of 2002, TheraDoc will have seven clients which starts our revenue path, and by 2003 we're looking at as many as 20 additional clients.

DiQ:  People are always talking about Utah's venture capital market for the life sciences. Some say it's poor while others are saying it's on the upswing. What do you think?

Pestotnik:  It's a difficult market here. We've gone out of state and are working with VC groups in Massachusetts, Arizona and California, although I have ongoing discussions with vSpring and have chatted with Wasatch Venture Fund a little. We presented at the last meeting of the Wayne Brown Institute but nothing came of it except we got a lot of people who wanted jobs with TheraDoc. (Laughs.)

DiQ:  Any luck with the out-of-state investors?

Pestotnik:  I was on the phone with a VC group from Newport Beach that we've been talking to for over a year. They told us in early discussions they'd like to see TheraDoc have five clients so there'd be proof of concept. When I told them recently that I'd have seven by the end of the year, they said, "Fantastic, now we'd like proof of scalability so we want you to have 15."  If I have 15 clients, theoretically TheraDoc would be essentially venture-proof. I told the gentleman that and he started to laugh. He told me VCs today tend to be quite risk-averse. In my opinion, they are in many aspects becoming like traditional bankers.

DiQ:  Are you bitter about that?

Pestotnik:  No, I'm not.  I understand the circumstances under which they operate. It doesn't make me happy but I understand. It's a reaction to all the greed and irrationalism from the dot-com era. All the VCs tell me that the companies that emerge from this [economic downturn] will be much stronger and better positioned.

DiQ:  That seems fairly obvious doesn't it?

Pestotnik:  (Laughs.) Yes, I guess they just feel they have to say that to be encouraging.

DiQ:  If all goes well, does this mean you'll go from being an academician to a wealthy businessman?

Pestotnik:  I'm not driven so much by wealth. I'd like to see the company be successful and everyone in it. I've seen what this software can do and I want to see it made available to every health care provider in the nation. That may sound silly or altruistic, but that's how I feel and that's how we all feel here. We were all initially trained as health care providers taking care of people and that's our mentality.