Parachute Health Raises Millions for Its Fight Against Fax Machines

The Epic-friendly startup wants to knock paper out of the DME prescribing chain.

For the second time in 3 months, e-prescribing startup Parachute Health is counting up the millions.

This week, it announced a successful new venture round worth $9.5 million. The company, which aims to fully digitize the durable medical equipment (DME) ordering process, also pulled in $5.5 million from a seed round that was announced in March.

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Parachute’s proposition is that, despite the near-ubiquity of electronic health records (EHRs), a large portion of DME orders (and prescribing orders in general) are still heavily reliant on fax machines. That can create some obvious problems: missed, lost, or incorrect information, inefficiency, and late or unprocessed orders. The company claims that more than 4 in 5 fax orders are declined on first send due to clerical errors, and more than 1 in 10 are never delivered to patients.

In announcing the new funding, the company says it “completely upends this outdated legacy process” and can help hospitals save money and reduce fraud.

“Insight saw Parachute’s ability to tap into an area in healthcare where technology was lacking and not only innovate, but also create real change,” Peter Segall, the managing director at Insight Venture Partners, said in this week’s announcement. Insight led the round, which also saw contributions from GNYHA Ventures and former UnitedHealth Group executive Anthony Welters. Welters, Segall, and GNYHA Ventures President Lee Perlman will all join Parachute’s board of directors.

“We are incredibly encouraged by the tremendous interest we’ve seen so far from healthcare facilities and suppliers across the country,” Parachute CEO and founder David Gelbard said. “Parachute’s goal is to solve the flaws of the post-acute care industry and to help people who depend on essential at-home equipment and services to live independent and happy lives.”

It claims its solution works closely with the leading EHR systems, though it singles out Epic by name in most of its official announcements. Epic’s App Orchard—something like the EHR vendor equivalent of the Google Play Store or Apple App Store—features the Parachute DME Ordering software. Cerner’s App Gallery and Allscripts’ Application Store do not, with the latter planning to offer a yet-to-launch alternative called DME Hub.

Parachute’s DME ordering suite is already in use at some major health systems in Parachute’s home town, New York City, including the Hospital for Special Surgery and the Visiting Nurse Service of New York. Other US institutions like Stanford Hospital have also adopted the technology. Both Stanford and Hospital for Special Surgery appear to use Epic software for at least some of their EHR management functions.

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