Nothing short of the opportunity to make the world a better place while making a lot of money could have lured Jim Torina ’84 out of his retirement. He’d already made a fortune building high-end homes around the Puget Sound and was happily surfing in Mexico.
Torina wasn’t about to give up his hard-earned surfing for just any tantalizing deal.
But this was different.
First, here was this clear need: According to a report from the Institute of Medicine of the National Academies, medication errors harm at least 1.5 million people a year. The medical costs of treating drug-related injuries occurring at hospitals alone amount to at least $3.5 billion annually.
The solution to this problem was correspondingly clear: Track the drug, from its entry into the hospital pharmacy’s inventory to the moment the patient ingests it, with bar codes.
And get this: No one else was doing it.
Torina got the idea from Tom McCarthy, who had worked with a large drug distributor and apparently knew a need when he saw one.
“When I met him,” says Torina, “we were in a hospital room with his mother. There were posters and wristbands all over the room, ‘don’t give her this med, she reacts badly.’ Twice while I was there, they tried to give her that med.”
Torina hung up his retirement shoes, as he puts it, joined with McCarthy to start a company called Talyst, and ponied up the money to operate for a year.
That was five years ago. Since then, the clear need and its solution have translated into Talyst’s growth of 300 percent a year, four years in a row. That quick growth has given Talyst a strategic advantage, enabling it to keep competitors at bay. Torina hopes to continue that rate of growth, without having to go public.
Toward the end of 2006, Talyst had 112 employees and received a $20 million cash infusion. Torina planned to add another 120 employees this year. He plans on 1,000 by the end of the decade.
Talyst’s success is based largely on computerized tracking and record keeping, eliminating wherever possible the chance of human error.
Built on intelligent software, the Talyst system comes in various forms, or rather, stages. A complete system combines the managing software with automated storage and retrieval. A machine in the pharmacy automatically dispenses a patient’s daily medications sealed in a plastic strip in the order they are to be taken, each marked with a bar code.
Back in the patient’s room, the nurse uses a portable scanner to record the single-dose medication, then scans the patient’s wristband to make sure the bar codes match, and the record is complete. The system also provides inventory control and just-in-time ordering as well as security.
“Patient safety, FDA regulation, cost benefits that are going into place, pharmacist shortage, supply chain requirements, 16 percent of hospital budgets now in drugs-all these planets just lined up right in a row for us,” says Torina.
In 2004, the FDA mandated that every drug going to a patient’s bedside must have a barcode on it. Problem was, the manufacturers didn’t have the technology to put a barcode on every pill. As a result, they simply pulled 30 percent of their drugs from the market.
“The magic,” says Tim McMenamin, Talyst’s vice president for marketing, “has been putting the barcode on each single unit of use. And that’s really where we snuck into that market.”
It’s not as if no one else recognized the obvious opportunity, though Talyst has only one major competitor. But that competitor’s components do not match well with other systems within the hospital. And there’s the competitive advantage, says Torina.
“We play well with others.”
“Hospitals have made this huge investment in systems, pharmacy information, wholesale ordering, bedside scanning systems, et cetera,” says McMenamin. Talyst connects them.
Given the fact that there are more than 40 different bar code systems in operation, coordinating them with existing hospital inventory systems and so forth is no simple task. Again, Talyst’s system has the advantage of interpreting and converting those bar codes.
Torina’s enthusiasm for his venture is infectious. He is clearly very pleased with its success. And with himself. But his satisfaction is disarming rather than off-putting. This is someone who knows exactly what his talent is.
“I’m not a pharmacy guy,” he says. “It’s pure logistics. We’re not trying to make people well. We’re trying to get people better through process management.”
Torina had already begun to hone his management skills while at Washington State University. As a sophomore, he joined the Northwestern Mutual Life College Unit program and was directing it by the time he was 20. Three years in a row, he led the WSU program to top production honors and finished as the #1 manager in the country. At the same time he was platoon leader in the U.S. Marines PLC program.
Talyst’s next move stretches Torina’s grin even further. The company has honed the efficiency of its system on the hospital and long-term care markets. By the end of 2006, it had installed systems in more than 200 hospitals. But even larger is the home market.
“We manage the 11 prescriptions the average 65-year-old is on and dispense in order, as you’re supposed to take them,” says Torina.
“We’ve got a simple goal,” he continues. “Forty to 50 million people on our machines in 10 years, all paying 20 to 50 bucks a month.”