Nurse shortage feeds online-training startup

August 20, 2007

By the year 2020, the United States is expected to face a nationwide shortage of at least 1 million nurses. Some fear a looming health care crisis. Orbis Education Services Inc. CEO Dan Briggs sees a potential profit center.

"Demand [for nurses] is going up. Supply is steady or decreasing. That creates a business opportunity," he said. "You've got an everyday problem. So how do you solve it with today's technology?"

Founded in 2003, Fishers-based IT startup Orbis aims to provide the link between universities and hospitals for online delivery of nursing courses. Briggs, 47, organized the company with the help of $1 million "plus sweat equity" from friends and family. It now has 12 employees.

On July 31, Orbis closed on $3 million more, this time from local angel investors. The deal was led by Indianapolis-based investment banking firm Periculum Capital Corp. Taking advantage of the state's venture capital investment tax credit program, Orbis provided investors vouchers that reduce their tax bills.

This wasn't Briggs' first trip to the well. In a 19-year career with Roche Diagnostics Corp., he rose from the sales ranks to lead the development and sale of the corporation's virtual physician startup MyDoc.com. Standard Management Corp.'s subsidiary U.S. Health Services Corp. bought MyDoc from Roche in 2003.

Orbis spent its first two years in business studying the looming care-giver shortage, as well as how U.S. universities currently educate new nurses. Briggs cited research by PricewaterhouseCoopers pointing to the imminent retirement of the baby boomer generation. That means the need for new nurses will grow dramatically even as the pool of experienced ones shrinks.

What's more, Briggs said, the U.S. nurse population is not well distributed to serve the country's changing demographics. Nurses tend to stay where they're originally licensed. That means the East Coast, with its high density of nursing schools, isn't facing the same dramatic shortages as the Sunbelt and Pacific Rim.

Another wrinkle: Fully training new nurses requires hands-on clinical work in hospitals. That makes completely online systems impractical. Instead, Orbis plans to broker deals between universities, which can provide classroom content virtually proctored by full professors; and large health care systems, which can offer the facilities and opportunities for nurses to hone their skills in person.

"There's already a lot of brick and mortar," said Periculum Managing Director Joe Broecker. "It's just not being used properly."

Orbis has established one partnership of this kind so far--between the University of Oklahoma's College of Nursing and San Diego-based Sharp Healthcare. Broecker said earning California's regulatory approval for the partnership was the biggest hurdle. That process took nearly two years. In the end, Orbis set up additional oversight by California-based schools to cut through the red tape.

If they'd known regulators would be such a hassle, Broecker said, Orbis might not have tried. But the effort has an upside: Its difficulty makes Orbis' business model difficult for competitors to duplicate.

"We were a new beast, a national nursing program trying to come in and do business in an extended campus format and grant degrees," Broecker said. "We worked through myriad regulatory issues."

The University of Oklahoma has about 1,000 traditional nursing students in its Norman-based campus program. Through Orbis, it now can deliver two types of nursing degrees in San Diego. One is aimed at increasing the qualifications of nurses who already hold associate's degrees in the field to a full bachelor's degree. The other is aimed at students who have completed college degrees in subjects outside nursing--anything from accounting to chemistry to psychiatry. They want to become nurses, but don't have the time or inclination to repeat the full-time on-campus experience of liberal arts prerequisites.

"They're really sort of a brokering service that puts together consumers and providers," said Patricia Dolphin, associate dean of the University of Oklahoma's College of Nursing. "They approached us about this and have provided support to enable us to make the program available, and have provided access to nurses in California and other individuals to the kind of program we do."

Sharp Healthcare is a network of seven hospitals and specialty physicians' offices. It has 14,000 employees, 3,600 nurses and 1,100 beds. Jennifer Jacoby, Sharp Memorial Hospital's chief nursing officer, said San Diego already is suffering a dearth of qualified nurses. It's currently attempting to recruit 400 new ones, but California schools can't keep up with the demand.

On the other hand, San Diego has a surplus of well-educated people who started their careers at one of the city's many health care or biotech startup firms. As is the nature of startups, many go bust. And even when the companies are viable, some employees eventually discovery they prefer the career-benefits stability an established hospital can offer.

Jacoby said the University of Oklahoma extension program through Orbis is an excellent way to retrain top talent from other fields to become nurses.

"Taking care of people today is an intellectual challenge as well as a physical challenge," Jacoby said. "You need a good mind to be a good nurse. It's not a grunt job. You need to bring some real intellect to the table."

Six nurses now have graduated from Orbis' pilot class. Thanks to its $3 million infusion, the company hopes to ramp that total up considerably in the days to come. Orbis plans to begin signing on new university partners and linking them to additional hospitals around the country as it grows.

Orbis has done it once, Broecker said. Now it must do the same thing again and again.

"We've got the curriculum online," he said. "Now it's really about the execution."

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