Concepts write up

For the exclusive use of K. Mccrary, 2019.NA0317
Fisdap: The Nursing Opportunity
Derek Lehmberg, North Dakota State University
O
ne cold Minnesota winter day in February 2013, Mike Johnson, CEO of
Headwaters Software, reflected on his recent trip. Johnson, together with
several other Headwaters employees, had visited Tempe Metropolitan Community College (TMCC), located in Tempe, Arizona, which provided training in
numerous healthcare occupations. Jacqueline Gonzalez, the Health Science department chair of TMCC, had invited them down to discuss whether Johnson’s company
would consider developing software for TMCC’s nursing program.1 The visit had
helped Johnson and his team better understand the opportunity, but he had yet to
decide what to do.
Although it remained a small private company, Headwaters Software, or “Fisdap” as
everyone called it, was the leading provider of software solutions and content for training in the emergency medical services (EMS) field, with over 800 schools as customers.
Fisdap had played a key role in facilitating changes in the way EMS students’ clinical
internships were managed and competencies learned from these were tracked. The
initial impetus for these changes had been new federal government regulations applying to EMS. In the future, it appeared that educational programs for other healthcare
occupations were likely to adopt similar methods.
Fisdap had been considering entering other related healthcare education fields for
some time. It was a difficult decision. While these offered the opportunity to build new
markets from scratch, moving beyond EMS entailed some significant risks, and the
company had not tapped out all of the growth potential of its existing market. Johnson was not entirely sure what to say back to Gonzalez. Should he take the plunge, or
should he play it safe and decline the offer?
EMS as a Healthcare Occupation
EMS providers were individuals who responded to emergency medical situations
in the field, providing urgent care and transportation to patients who were sick or
injured. In 2012, there were 270,000 nationally certified EMS individual providers in the U.S. according to National Registry of Emergency Medical Technicians
Copyright © 2014 by the Case Research Journal and Derek Lehmberg.
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(NREMT; see Exhibit 1 for a list of acronyms).2 EMS occupations were divided into
several levels of practice and certification including Paramedic, Advanced Emergency
Medical Technician (AEMT), Emergency Medical Technician (EMT), and Emergency Medical Responder (EMR). Paramedic was the highest level in the U.S. system.
Each level had its own skill requirements; however, because the levels represented a
progression of complexity and difficulty, each level also required the knowledge and
skills of all levels below it. A summary of skills requirements for the different levels is
shown in Exhibit 2.
Exhibit 1: EMS Related Acronyms in 2013
Acronym
Meaning and Information
CAAHEP (pronounced
Kay-Hep)
Commission on Accreditation of Allied Health Education Programs. This organization accredits educational programs for a
variety of different allied healthcare professions.
URL: www.caahep.org
CoAEMSP
Committee on Accreditation of Educational Programs for the
Emergency Medical Services Professions. Operates under the
auspices of CAAHP. It provides accreditation to education programs, and not individuals.
URL: www.coaemsp.org
NREMT
National Registry of Emergency Medical Technicians. This also
refers to the exam required by many states for EMT certification. Current NREMT exam based upon 2009 National EMS
Education Standards (NEMSES) and 2010 American Heart
Association CPR and Emergency Cardiac Care Guidelines.
URL: www.nremt.org
NEMESES
National EMS Education Standards.
NAEMSE (pronounced
Nem-See)
National Association of EMS educators. This association also
has an annual conference associated with it.
PCRF
Prehospital Care Research Forum.
URL: www.ems.gov/EducationStandards.htm
URL: www.naemse.org
URL: www.pcrf.mednet.ucla.edu/pcrf/index.shtml
Sources: Internet pages shown above.
EMS was a relatively new healthcare occupation, with its history measured in
decades, whereas the history of nursing and medical doctor occupations was measured in centuries. The unique culture and regulation of EMS were due to the location
of practice being outside the hospital, the urgent nature of the care required, and
some accidents of history. An early use of ambulances had been to respond to highway accidents. Because of this, a seemingly unlikely player, the U.S. Department of
Transportation, had become involved in specifying curriculum requirements for EMS
education.
2
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Exhibit 2: Levels of EMS Practice and Certification in 2013
Level
Explanation
Professional
Qualification
Ambulance
Duty
Paramedic
Paramedics possess complex medical knowledge
and skills, including invasive and pharmacological
interventions. They provide advanced emergency
medical care. This is the highest level of pre-hospital
care in the National EMS Education Standards.
Y
Y
AEMT
Advanced Emergency
Medical Technician
AEMTs “provide basic and limited advanced emergency medical care and transportation for critical
and emergent patients.”
Y
Y
EMT Emergency
Medical Technician
EMTs possess “basic knowledge and skills necessary to provide patient care and transportation.”
Y
Y
EMR Emergency
Medical Responder
Y
N
(previously known as
First Responder)
EMRs possess “basic knowledge and skills necessary to provide lifesaving interventions while
awaiting additional EMS response and to assist
higher level personnel.”
CPR
Basic emergency CPR and AED usage.
N
N
cardiopulmonary
resuscitation
Examples of skills include IV/IO insertion, blood
glucose monitoring, administration of additional
medications.
Examples of skills include blood pressure monitoring, administration of certain medications,
advanced oxygen and ventilation skills.
Examples of specific skills include bleeding control,
CPR, AED, emergency childbirth
Sources: Compiled by the author from interview data; Coughlin, C. (2012.) EMT Crash Course. Pisataway, New Jersey:
Research and Education Association; National Highway Traffic Safety Administration. (2009). “National Emergency Medical Services Education Standards.” DOT HS 811 077A. Retrieved November 19, 2012 from http:// naemse.pgpic.com/
edustandard-6-1-.pdf. Quotes are from page 10 of this document.
Training for EMS Professions
EMS training was provided by four-year colleges, community colleges, technical institutes, and specialized emergency care training facilities, as well as ambulance services
and fire departments. Some EMS training providers, especially ambulance services and
fire departments, did not offer courses on a regular basis, making it difficult to gauge
the number or size of these operations. Johnson reckoned the average program size was
about thirty students.
Training requirements depended on the level of practice and certification, although
the general approach was similar. Formal classroom training was followed by examinations that the students had to pass before they could begin their clinical internships.
Clinical internships were split between shifts in the hospital and in the field (usually with an ambulance service). Successful completion of clinical internships was
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determined based upon the number of times the intern successfully performed certain required tasks and not the number of hours or shifts worked. After their clinical
internships were finished, students sat for a certification examination.
Certification and Licensing of EMS Professionals
Certification and licensing were distinctly different legal concepts. Certification was
provided by private non-governmental organizations such as the NREMT, typically
based upon the individual passing an examination.3 State governments issued licenses
to practice a profession, based upon the certification exams. An individual who was certified but did not hold the state license was not legally allowed to practice in that state.
The most widely accepted certification exams were those from the NREMT,
required by the majority of states for initial certification at EMT and Paramedic levels. However, some states required this certification for only one of the two levels.
Five states did not require NREMT certification.4 In 2012, the NREMT gave 18,750
exams at the Paramedic level and 84,043 exams at the EMT level.5 The national first
time pass rates in 2012 were 72 percent for EMT and 74 percent for Paramedic.6
Trends for the number of exams given and pass rates are shown in Exhibits 3 and 4.
Differences between states went beyond requirements for initial certification, and
also included differences in continuing education requirements, continued competency
requirements, and recertification.7 The National Highway Traffic Safety Administration (NHTSA) had proposed increased standardization of accreditation, certification,
and other requirements across states.
Exhibit 3: Exams Given by NREMT
 120,000    
 100,000    
Exams  given  
 80,000    
 60,000    
EMT  
Paramedic  
 40,000    
 20,000    
 -­‐        
2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011   2012  
Year  
Source: “NREMT Annual Reports 2002–2012.” Retrieved November 2, 2013 from http: https://www.nremt.org/nremt/
about/annual_reports.asp.
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Exhibit 4: First Time Pass Rates on NREMT Exams
Source: “NREMT Annual Reports 2002–2012.” Retrieved November 2, 2013 from http: https://www.nremt.org/nremt/about/
annual_reports.asp.
Fisdap’s Beginnings
In 1996, the U.S. Department of Transportation (DOT) announced a new curriculum
for EMS, which would change the way that clinical internships were evaluated. The
curriculum, adopted by the Committee on Accreditation of Educational Programs for
the Emergency Medical Services Professions (CoAEMSP), required that students show
evidence of competency at performing key tasks; competency was established based
upon evidence the intern had completed the specific required tasks, such as inserting
an IV into a patient’s vein, at least a minimum number of times. Prior to the new curriculum, internship requirements were based upon hours of service, which resulted in
the trainees getting very different levels and types of experience depending on where
they had done their internship.
These changes were first presented to EMS educators in September 1996 by the
NAEMSE (National Association of EMS Educators). The new curriculum implied that
schools would have to find a way to track intern experiences in the field, which they had
not done previously. Several educators present decided to search for an Internet-based
solution to track student experiences. One of them was David Page, a college friend of
Johnson’s, who worked at Inver Hills Community College in suburban MinneapolisSt. Paul, Minnesota.
Page and Johnson received a grant from Minnesota State Colleges and Universities to develop an initial version of this skills tracking software. The grant was called
Fisdap, or Field Internship Student Data Acquisition Project. It provided funding for
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Johnson to develop the software, essentially buying time from Johnson’s employer, a
small software firm specializing in scientific and three-dimensional modeling, named
SESSCO. Page brought the required subject matter expertise to the project. Johnson was an experienced programmer, but had little experience with Internet software,
which was still a new field at the time. He viewed the grant as a one-off project that
would give him the opportunity to learn more about programming for the Internet.
The project made use of open source software known as the LAMP Stack (Linux operating system, Apache web server, MySQL database, PHP scripting language).
Development work started in January 1997, and the software was functional in the
first half of that year. The new skills tracking software was installed on a hand-built
PC attached to a T1 (“high speed” Internet for the time) line in the Inver Hills Community College. The setup was low cost but it worked. As part of arrangements to set
up the service, SESSCO and Inver Hills took joint ownership of the software code. At
the time it was rolled out, five schools commenced using the system.
After the grant was finished and Johnson’s part was done, schools continued to use
the system—however there was no way to maintain the code or update the system. In
1999, a discussion began around questions of how to keep the system up-to-date and
whether to make it available to additional educators. The group (Inver Hills and Sessco) first tried to give the system to NAEMSE, and later offered it to the Pre-hospital
Care Research Forum (PCRF). Both organizations declined because of lack of experience with software development or maintenance.
At this point, the group considered asking schools to pay for the system. All of the
schools already using the system agreed to pay. The effort then resumed as a 50–50
partnership between Inver Hills and Johnson’s employer, SESSCO.
In September 1999, Johnson and Page rented an exhibitor booth at the NAEMSE
exposition in Orlando, Florida. Over the two-day exposition, fifteen additional schools
agreed to adopt the system, doubling the number of institutions using it. The magnitude of this market feedback somewhat surprised Page and Johnson—they began to
think they might be onto something.
The partnership between Inver Hills and SESSCO continued for some time, with
the SESSCO side working on sales and technology and Inver Hills providing subject
matter expertise. Several issues arose around strategic decision making and day-to-day
operations, particularly hosting of the service. In 2001, SESSCO bought the rights
for the intellectual property from Inver Hills, under an agreement paying Inver a percentage of revenue earned over a ten-year period. However, soon after this, SESSCO
found itself stretched in too many directions. The company’s board concluded that
Paramedic education did not fit with its other businesses. Johnson suggested starting a
separate company to buy Fisdap and the related intellectual property from SESSCO,
and founded Headwaters Software, Inc. Johnson remembered how strapped for cash
Headwaters had been back then: “We maxed out our credit cards . . . I even had to
borrow money from my mom, but we were able to raise enough to buy out Fisdap and
start operating.” Page maintained his relationship with the new firm as a shareholder
and consultant.
Beginning with one full-time and one half-time employee in 2001, and growing to
five full-timers in 2003, Fisdap’s early employees were all generalists, who had to manage sales, customer service, and new development.
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Products
Fisdap first worked to improve their existing product, and then moved on to develop
related products for the EMS education market. Scheduler was rolled out in 2001, Testing in 2004, Study Tools in 2009 and 2010, and Preceptor Training in 2010. Exhibit 5
contains a screenshot of the company’s web page and product lineup. Each of these
products is discussed in more detail below.
Exhibit 5: Fisdap Web Page
Source: http://www.fisdap.net. Used with permission of Headwaters Software, Inc.
Skills Tracker. The need to track students’ clinical internship experiences was the
original impetus for building Fisdap. As the company grew and additional products
were developed, the company’s internship tracking service was renamed Skills Tracker.
Skills tracking worked as follows: First, individuals in charge of supervising internships, known as “preceptors,” signed paperwork documenting the intern’s experience
for a shift. Later, the student input the experience into the skills tracker database via
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the Internet. Auditing procedures allowed schools to verify the experience reported by
the students.
Schools did not have to use a software tool like skills tracker; they could use a paperbased process, or set up simple databases using products like Microsoft Access or Excel.
Typically, trying to manage skill tracking in these ways either took instructor time or
required additional administrative staff, resulting in additional expense. In cases where
the educators had programmed their own databases, schools encountered difficulty
when the educators left.
Scheduler. The second product Fisdap developed was an Internet-based scheduler
for managing student internships. Scheduling student internships was a cumbersome process involving the hospitals and ambulance services where the internships
took place, the schools needing to place the students in internships, and the students
themselves. Coordination often required numerous phone calls back and forth. The
scheduling software simplified the process for the schools and students. Schools used
the software to set up opportunities for specific days and times at cooperating hospitals
and ambulance services, and students signed up for these opportunities online. This
greatly reduced the burden of cooperation on schools and also increased convenience
for students.
Testing. The company’s third product was based on the need for the examination
questions used in EMS education to be statistically “reliable and valid.” In other words,
the questions had to measure what they were intended to and do so consistently across
different demographic groups of students over time. Several steps were required to
ensure this. First, extensive reviewing of exam questions by subject matter experts was
needed to identify potential issues such as the use of local jargon, or other wording that
might introduce bias and reduce validity. Second, an organized pre-testing program
was needed to establish the statistical reliability (consistency) of results. This required
a minimum sample size of 300–400 exam takers. However, with an average EMS
program size of only thirty students, most schools did not have enough students to
facilitate a statistically sound pre-testing program. By bridging multiple institutions,
Fisdap could obtain much larger samples, usually between 1,000 and 1,200, and could
use its larger scale to facilitate review by educators and physicians.
Because Fisdap was primarily a software company, it relied on questions contributed by EMS instructors, which it then pretested and packaged into exams. These
instructors were not paid for contributing questions, for which Fisdap held copyright
ownership, but the company maintained records, and gave contributors discounts for
Fisdap testing products.
Fisdap found that 97 percent of students passing its comprehensive exams also
passed the NREMT exam on the first try, compared to an overall first time pass rate
between 72–74 percent.8 The NREMT was a high stakes exam; many EMS employers
made continued employment contingent on passing the exam. Thus, Fisdap’s Testing
products were valuable to both educators and students.
Study Tools. The concept behind Study Tools was based upon the prior Testing
product. Study Tools provided students an option for independent study, using questions similar to those in Testing. Unlike the exams, Study Tools included feedback on
the students’ strengths and areas of weakness as well as demonstrations and other educational tools. It could be used when and where the student found it convenient.
The Study Tools product had been something of a gamble for Fisdap. Study Tools
competed with existing products sold by textbook manufacturers and test preparation
8
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schools. When Fisdap started developing the product, it was not sure how students
would decide amongst these different options.
Preceptor Training. Preceptors were practicing EMS professionals typically considered to have strong medical skills and knowledge, but who did not usually have
formal training in teaching. Fisdap developed a four-hour online course to help preceptors be more effective mentors. Preceptors could use this training program to meet
continuing education requirements.
Adoption Decisions and Pricing
Schools and educators made the decision to adopt Skills Tracker, Scheduler, and Testing.
In some cases, schools purchased the service, passing along the cost in student fees. In
other cases, students paid for the service directly on an individual basis. In either case,
payments were made directly to Fisdap, which did not use distributors. Study Tools
could be required by the educator, however unlike Fisdap’s other products, individual
students could also decide to purchase it on their own if not required by their school.
The cost and features of software depended on the practice level. Skills Tracker,
Scheduler, and Study Tools were offered at the EMT and AEMT/Paramedic levels. For
Skills Tracker and Scheduler, the number of shifts was limited at the EMT level but not
at the paramedic level. Fisdap offered comprehensive exams and unit exams at EMT
and paramedic levels. It also had a paramedic entrance exam. Exhibit 6 provides pricing information by product and level.
Exhibit 6: Fisdap Product Pricing
Product or Package
EMT Level
Paramedic Levels
Scheduler
$15
$40
(Also for AEMT)
Skills Tracker
$15
$55
(Also for AEMT)
Testing: Comprehensive Exams
$20
$25
–
$24
Testing: Unit Exams
$60
$75
Study Tools
$30
$35
Testing: Paramedic Entrance Exam
Preceptor Training
Assessment Package. Includes: Comprehensive
Exam, Unit Exams and Study Tools
Accreditation Package. Includes: Scheduler,
Skills Tracker, Comprehensive Exams, Unit
Exams, and Preceptor Training
The Whole Shebang Package. Includes: Scheduler, Skills Tracker, Comprehensive Exams, Unit
Exams, Study Tools, and Preceptor Training
Educators
$25
$90
($20 discount)
$115
($20 discount)
–
$185
($35 discount)
$140
$215
($25 discount)
($40 discount)
Source: Headwaters Software, Inc.
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Emerging Needs Based Upon New Education Standards
Federal regulators had announced new standards for EMS education, although state
governments had yet to decide when and whether they would adopt these standards.
The new standards would require practitioners to take additional training to maintain
certification. Fisdap was working with Inver Hills and several ambulance services to
develop a new online course to provide this training for existing certified personnel.
They planned to roll out the course later in 2013.
Research Facilitated by Fisdap Data
Over the years since the original skills tracking software had been launched, Fisdap’s position in EMS training had allowed it to capture a large volume of unique
data about students’ development of skills and competencies in the field. These data
allowed analysis of such questions as how many times do students need to successfully
perform a task before they are reliably competent at the task. Fisdap made these data
available to researchers studying EMS training, and hosted annual research summits.
To date, the data had been used in over thirty peer reviewed conference presentations
and journal articles.
Competitors
Fisdap’s website claimed that over 75 percent of accredited schools used the company’s
products and services. Johnson was not particularly concerned about Fisdap’s current
competitors. He noted:
The competitors we face depend on which product you’re talking about. In tracking, a
lot of our competition has come from small operators run by EMS educators and practitioners, but there have also been some textbook publishers. Over the years, we’ve seen
these kinds of firms come and go. One reason is because they don’t usually have sufficient software development skills. Study Tools, on the other hand, often competes with
products from larger companies that are in the test preparation business, like Kaplan,
and textbook companies. Nobody out there competes with us across our entire set of
products. Anyway, we’re different from all those guys . . . we’re a software company.
We believe that making sure EMS educators who use our product are happy is the key
for our success. Rather than keeping our eyes on competitors, we’re better off focusing
on our educators. We’re aware that some competitors are trying to increase their penetration with slightly lower prices than ours. We sometimes hear from customers who
tried one of the other guys—they tell us why they’re coming back to us.
Currently, Johnson was aware of several competitors. Fusion Public Safety Systems,
LLC was a firm started by first responders in Richmond, Virginia. It sold Clinitrack,
a tracker and scheduler that competed with Fisdap’s Skills Tracker and Scheduler. A
website estimated the company’s annual revenues at $81,000.9
Ascend Learning owned the EMS textbook publisher Jones & Bartlett and a
healthcare education-related software provider called Advanced Informatics. Jones &
Bartlett offered a package including scheduling and skills tracking for EMT, AEMT,
and Paramedic levels. It was priced five dollars less than Fisdap’s equivalent package.
Johnson understood that Ascend had access to substantial private equity funding, and
was pursuing growth aggressively. According to the company, it had annual revenues
10
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of $236 million in 2011, which reflected “Twenty percent or more” growth over the
prior year, before taking into account new acquisitions.10
Platinum Education Group offered several EMS testing and planning tools but also
sold other services including consulting, training programs for educators, and curriculum development. Platinum Planner was the name of its skills tracking and scheduling
product that it sold to schools for $250 per year. Student prices ranged from $25–$60,
depending on the provider level.11 Platinum sold a computer adaptive testing solution using questions it had validated. Annual pricing for institutions depended on the
number of users. For example, a silver account allowing two to forty users to make an
unlimited number of tests cost $800 per year.12 Global Duns Market Identifiers, part
of Dun & Bradstreet, estimated Platinum’s annual sales at $140,000.13
Platinum collaborated with Brady Books, an EMS textbook publisher owned by
Pearson, on a web site called EMSTesting.com, which offered several products competing with Fisdap’s Testing solutions. 14 This site’s Platinum EMS Testing product allowed
instructors to build exams using pretested questions, and was priced at $500 per year
for one school. Online and adaptive testing could be added to the package, but at an
additional per student fee depending on the level; for example, the EMT student fee
was $30 while the Paramedic fee was $60.15
In addition to cooperating with Platinum, Pearson had exposure to EMS education through Pearson VUE, an electronic testing service that administered NREMT
amongst many other tests. Pearson PLC was the world’s largest book publisher16 with
48,000 employees in seventy countries and combined 2012 sales of 6.1 billion British
pounds (Equivalent to $9.5 billion U.S. dollars at an exchange rate of $1.55 to the
pound). Pearson’s business segments included consumer publishing, business information, and education. Education was its largest segment representing 76 percent
of 2012 sales, and 84 percent of operating profit. North American education was
Pearson’s single largest business in 2012, with sales of 2.7 billion British pounds and
an operating profit of 536 million pounds. Pearson was considered a leading player
in educational products across different countries, educational levels, and specialties.
Going forward, Pearson’s strategy was to build four global educational businesses:
school, higher education, business education, and English language learning. 17
Johnson thought that the middle-sized players represented the biggest threat to Fisdap. The EMS education niche was small but could still provide a meaningful growth
opportunity for someone like Ascendant. For a company like Pearson, complete domination of EMS education would not even amount to a rounding error on its financial
statements. Large companies need large opportunities in order to grow, Johnson had
reasoned. That might not stop Pearson from going after “low hanging fruit.” However
Johnson felt that the remaining growth opportunities in EMS were ones that would be
difficult for new entrants to take advantage of.
Fisdap’s Strategy and Business Model
Johnson felt that Fisdap was on a roll, with positive cash flow for the last eleven years
and zero debt. See Exhibits 7 and 8 for the company’s fiscal year 2012 income statement and balance sheet. Top line revenue growth had averaged around 25 percent per
annum. Even in the worst year, growth had been 12 percent. Much of the growth was
due to introduction of additional products sold to existing target customer groups. Out
of curiosity, Johnson had plotted the number of products offered over time. He realized
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that it fit an 18 percent growth curve, meaning the firm was increasing its product
lineup by around 18 percent each year (see Exhibit 9).
Fisdap’s strategy had been to strike a balance between stability and focus by diversifying into a number of different products, each addressing a different need, but all
focused on a single area of business and relying on the same software development
skills and specialized knowledge related to EMS training. (See Exhibit 10, Percent of
Sales Represented by Each Product in Fiscal Year 2011.) Reflecting this, the company’s
vision and mission statements read: “We will reinvigorate EMS education by creating
innovative and engaging learning tools;” and “Fisdap brings the EMS community
together to create innovative solutions for teaching and learning. We use research to
shape best practice and drive change.”
Fisdap’s product diversification had several advantages. No externally imposed
changes relating to certification or registration could make all products irrelevant
simultaneously. Additionally, no single outside company would be able to enter into
competition with Fisdap across all of the products at the same time. Because Fisdap
served many institutions, it was not overly dependent on any particular one.
Another cornerstone of Fisdap’s strategy was its relationships with educators. Educators were important because they made the decision to adopt Fisdap or competing
products, and because Fisdap had found that word of mouth recommendations were
its most effective form of marketing. Furthermore, in Johnson’s experience, educators
were not eager to change their instructional materials if they were happy with what
they were using. Changing textbooks, software, or other instructional items introduced
the uncertainty that the new one might not work well, and also it required the educator to invest additional time to select, learn, and prepare to instruct using the item to
be adopted. Johnson felt that Fisdap had built a reputation as being friendly and easy
to reach for technical and other support, a vital requirement to keeping instructors
happy and loyal. Fisdap’s involvement with academic research helped further cement
the company’s relationships with educators.
Fisdap’s Culture and Teams
Johnson was proud of Fisdap’s culture. He had worked hard to build an organization based
upon mutual reliance, respect, and transparency, which he believed crucial for successful
software development. Fisdap’s management concept was based on the idea of complex
adaptive systems, such as schools of fish, where leadership was shared between individuals.
There were no fixed managerial positions or titles, except CEO, but each person had their
own area of expertise. The organization was flat and reacted fluidly to change.
Fisdap’s product development was project-based and followed a method called
“Scrum,” a type of Agile software development. Projects were assembled into short
bursts typically lasting several weeks, called “sprints.” Each sprint had a person responsible for managing the process and one product owner. The positions rotated from one
sprint to the next, so it was not uncommon to find an employee reporting to a product
owner in one sprint, who had reported to them in a prior sprint.
Traditional software development approaches typically moved forward in sequential steps; for example, first designing the software and next developing code. Such
approaches lacked flexibility and effective feedback loops. In contrast, Fisdap’s Scrum
approach used a parallel workflow to maintain ongoing contact between the concurrent design and development, resulting in greater flexibility, faster problem solving,
and a better product, Johnson observed.
12
Case Research Journal • Volume 34 • Issue 4 • Fall 2014
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For the exclusive use of K. Mccrary, 2019.
Exhibit 7: Headwaters Software FY2012 Income Statement*
Revenue
Software licenses and services
EMT level
$814,362
Paramedic level
1,005,037
Preceptor level
Total revenue
18,600
$1,837,999
Costs
Salary and benefits
Operating expenses other than salary and benefits
Promotional costs
Total costs
Operating income
$1,387,408
142,361
39,528
$1,569,297
$268,702
Interest income
6,638
Taxes
(107,481)
Net income
$167,859
*Note: Financial data is disguised at the request of the company.
Exhibit 8: Headwaters Software FY2012 Balance Sheet*
Assets
Current assets
Cash and cash equivalents
$578,087
Marketable securities
332,768
Accounts receivable
153,167
Total current assets
Property and equipment
Total assets
731,253
60,000
$791,253
Liabilities
Current liabilities
Accounts payable
$11,833
Long term liabilites
Total liabilities
0
$11,833
Equity
$779,420
Liabilities and equity
$791,253
*Note: Financial data is disguised at the request of the company.
Fisdap: The Nursing Opportunity
13
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For the exclusive use of K. Mccrary, 2019.
Exhibit 9: Number of Products Offered and 18% Growth Curve
14  
Number  of  products  offered  
12  
10  
8  
6  
4  
2  
0  
2001  
2002  
2003  
2004  
2005  
2006   2007  
Year  
2008  
2009  
2010  
2011  
2012  
Source: Headwaters Software, Inc.
Exhibit 10: Percent of Sales Represented by each Product in Fiscal Year 2011
Source: Headwaters Software, Inc.
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For the exclusive use of K. Mccrary, 2019.
Future Opportunities
Johnson recognized there was still room to grow with Fisdap’s current strategy. Fisdap
had identified several promising products and services to meet further needs of the
U.S. EMS education community. And Fisdap’s penetration at the EMT level lagged
the Paramedic level, and might be improved. However, Johnson was also considering
other opportunities.
International markets for Fisdap’s products represented a potential area for growth.
Some foreign countries were adopting the entire U.S. system for EMS, including English language instruction training materials. As long as translation wasn’t required,
Fisdap’s products could be used anywhere there was an Internet connection.
In the U.S., opportunities to serve educators in other healthcare professions were
also surfacing due to changing regulation, certification, and technology. Allied health
professions were a group of specialties, including EMS, dental hygienists, medical
technologists, physical therapists, medical sonographers and others (see Exhibit 11 for
a list of the allied health professions).18 Johnson reasoned that fields coming under the
Commission on Accreditation of Allied Health Education Programs (CAAHEP) were
likely to adopt similar accreditation philosophies, potentially increasing the similarity of requirements across professions. As of 2009, there were more than five million
individuals working in eighty different allied health care professions in the United
States.19 See Exhibit 12 for information from the National Bureau of Labor on current
employment, wages, and education for several selected healthcare professions. Nursing was sometimes considered part of allied healthcare, although it was technically a
separate area.
Many of the institutions providing allied health education already used Fisdap
products in their EMS programs, as was the case with TMCC. This could ease Fisdap’s
entry. While educators typically did not discuss instruction together with others in
different areas of expertise, administrators like Gonzalez often had a broader view.
However, each of the occupations had its own requirements, and gaining a detailed
understanding of these would take time and effort. In fact, the extent of difference was
one thing that had impressed Johnson’s team when he visited TMCC. Some solutions
for generic problems such as scheduling might be shared across different healthcare
careers, but other products would have to be developed to meet specific needs.
Fisdap: The Nursing Opportunity
15
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For the exclusive use of K. Mccrary, 2019.
Exhibit 11: Allied Healthcare Occupations and Accreditation
Anesthesiologist assistant*
Anesthesia technologist/technician*
Athletic trainer
Cardiovascular technologist*
Electroneurodiagnostic technologist*
Emergency medical technician-Paramedic*
Exercise science (personal fitness trainer*, exercise physiologist*, and exercise science
professional*)
Kinesiotherapist*
Lactation consultant
Medical assistant*
Medical illustrator*
Orthopedic physician’s assistant
Orthotist and prosthetist*
Perfusionist*
Polysomnographic technologist*
Respiratory therapist*
Surgical assistant*
Surgical technologist*
* Indicates the occupation is accredited based upon CAAHEP standards.
Sources: Compiled by author from: The American Medical Association. (n.d.). “Health Care Careers
Directory.” Accessed November 20, 2012 from http://www.ama-assn.org/ama/pub/educationcareers/careers-health-care/directory.page and from the Commission on Accreditation of Allied
Health Education Programs. (n.d.). “Standards and Guidelines.” Accessed February 18, 2014 from
http://www.caahep.org/Content.aspx?ID=30.
Note: The AMA does not categorize nursing as an allied health occupation, but nursing
training is often offered by educational institutions with allied health training.
16
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This document is authorized for use only by Kevin Mccrary in HSA 4140 Spring 2019 taught by SCOTT FEYEREISEN, Florida Atlantic University from Jan 2019 to Jun 2019.
For the exclusive use of K. Mccrary, 2019.
Exhibit 12: Wages, Employment, Growth, and Formal Training for Selected Healthcare Occupations
Position
Average
annual wage
(201) $US
Average
hourly wage
(201) $US
Estimated
growth in
positions
(2010–2020)
Estimated
employment
change
(2010–2020)
18,200
30%
5,500
Number of
positions
(2010)
Formal training offered by
Accredited college or
university
Athletic Trainer
$41,600
Cardiovascular
Technologist,
Cardiovascular
Technician, and
Vascular Technologist
$49,410
$23.75
49,400
29%
14,500
Community colleges and
four year universities
Diagnostic Medical
Sonographer
$64,380
$30.95
53,700
44%
23,400
Colleges, universities,
accredited institutes and
hospitals
Emergency Medical
Technician, and
Paramedic
$30,360
$14.60
226,500
33%
75,400
Technical institutes,
community colleges, and
facilities that specialize in
emergency care training
Medical and Clinical
Laboratory Technician
and Technologist
$46,680
$22.44
330,600
13%
42,900
Depends on specialty,
bachelors, associate
degree, certificate
Community colleges,
vocational schools,
technical schools, or
universities
Medical Assistant
$28,860
$13.87
527,600
31%
162,900
Nuclear Medicine
Technologist
$68,560
$32.96
21,900
19%
4,100
Hospitals, community
colleges, 4-year colleges
and universities
Orthotist and
Prosthetist
$65,060
$31.28
6,300
12%
800
Master’s degree granting
college or university
Physical Therapist
$76,310
$36.69
198,600
39%
77,4000
Postgraduate professional
schools
Schools of allied health,
academic health centers,
community colleges,
medical schools, and 4-year
colleges
Physician Assistant
$86,410
$41.54
83,600
30%
24,700
Radiation Therapist
$74,980
$36.05
16,900
20%
3,400
Radiation Technologist
$53,430
$26.13
219,900
28%
61,000
Certificate programs
and associate’s degree
programs
Respiratory Therapist
$54,280
$26.10
112,700
28%
31,200
Vocational schools,
colleges and universities
Surgical Technologist
$39,920
$19.19
93,600
19%
17,700
Community colleges and
vocational schools
Certificate programs,
associates and bachelor’s
programs
Source: Compiled by the author using data from Bureau of Labor Statistics. (2012). Occupational Outlook Handbook.
Accessed December 9, 2012 from http://www.bls.gov/ooh/healthcare/home.htm.
Note: Average estimated growth of positions was 14% over the period 2010–2020.
Fisdap: The Nursing Opportunity
17
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For the exclusive use of K. Mccrary, 2019.
The Nursing Option
Nursing was a large potential market. According to the American Nursing Association,
2.6 million licensed registered nurses were working in the United States in 2008, up
from 2.4 million in 2004.20 In 2011, a total of 144,583 candidates took the National
Council Licensure Examination for Registered Nurses (NCLEX-RN) for the first time,
up from 68,759 in 2001.21 See Exhibit 13 for trends in the number of first time test
takers and pass rates for the NCLEX-RN. Nursing education was provided primarily
by four-year colleges and community colleges, although they were not the only educational institutions delivering it. The cost of nursing education varied greatly by the
type of institution; generally, four-year educational institutions were more expensive
than community colleges. Community college students who met residency requirements could complete their entire nursing program for several thousand dollars.22
Exhibit 13: NCLEX-RN First Time Pass Rate and Number of First Time Test Takers by Education
92%  
 180,000    
 160,000    
90%  
First  Time  Test  Takers  
 140,000    
Other  
88%  
 120,000    
 100,000    
86%  
 80,000    
 60,000    
84%  
Foreign  Educated  
US  Educated  Associate  
US  Educated  -­‐  BA  
US  Educated  -­‐  Diploma  
 40,000    
82%  
 20,000    
 -­‐        
Average  First  Time  Pass  Rate,  US  
Educated  
20
00
20  
01
20  
02
20  
03
20  
04
20  
05
20  
06
20  
07
20  
08
20  
09
20  
10
20  
11
20  
12
 
80%  
Year  
Source: National Council of State Boards of Nursing. Retrieved November 4, 2013 from https://www.ncsbn.org/1237.htm.
The TMCC visit had been a valuable learning experience for Johnson’s team.
TMCC’s openness and interest made it an attractive potential partner if Fisdap decided
to proceed, although there were many other potential partners out there.
One aim of the visit had been to better understand the ins and outs of scheduling
nursing and other non-EMS interns. To gather information from a wide variety of
viewpoints, the team had interviewed educators and hospital staff who worked with
interns, and observed students. To facilitate the discussion, the team had brought
along a simplified prototype design of a scheduling tool.
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For the exclusive use of K. Mccrary, 2019.
The team also spent time learning about non-scheduling needs in the nursing area.
Gonzalez had given Johnson a three-inch high stack of paper, which was a portfolio
typical of what a single nursing student would develop to document their progress
through the nursing school. It was complex, detailed, and hard to follow. In the area
of skills tracking, they had learned that the nursing approach differed significantly
from that used in EMS education. EMS education attempted to make the skills automatic through repetition, whereas nursing education focused more on theory, and
actual competence at day-to-day tasks was largely left for the nurse’s future employer.
Despite this difference, Johnson thought it likely that nursing would eventually adopt
an approach that captured the number of repetitions and the success rate like EMS.
Johnson had gathered information about software the school was currently using,
and found nothing similar to what Fisdap was thinking about providing. If there were
existing products that met the needs of TMCC and other nursing programs, they
weren’t widely known. However, that did not necessarily mean that no one was in
the market. Eventually, nursing was bound to attract larger and tougher competitors
because of its potential market size.
Johnson now had a handle on the potential for scheduling software in nursing
internships. He estimated it would take the equivalent of three of his people an entire
year to develop the software. That was one quarter of his already busy team. If they
proceeded, Fisdap would have to reprioritize existing plans or hire additional people.
Johnson had not yet formulated a pricing scheme for nursing scheduling, however
he felt a pricing strategy similar to what Fisdap used in EMS would be effective. The
scheduler product would require some kind of marketing and promotion. Johnson suspected that targeting the hospitals that scheduled intern shifts would be an effective way
to move forward. If the software made hospital administrators’ lives easier, they might
require it of the schools. Good relationships with school administrators would become
more important as Fisdap worked to develop a reputation with nursing instructors.
Johnson mulled over the pros and cons of entering nursing. Going into nursing would mean plotting a new course, moving away from Fisdap’s existing strategy
and mission. Johnson found it exciting, but also a little bit scary. He asked himself:
“Should we continue to live our life as the happy big fish in our small pond, or take
more chances to grow in the bigger outside world?”
From what they had seen at TMCC, Fisdap faced a steep learning curve to develop
a sufficient understanding of nursing education and the potential role of software tools
in it. But Johnson thought the timing was good, as the market was set to change dramatically. If Fisdap didn’t get in now, it would be much harder to do so later. On the
other hand, going into nursing now meant putting off other opportunities.
Johnson was concerned about whether Fisdap could adjust to the more rapid pace
of growth he expected if they entered nursing. How would the company culture evolve?
Could the company, which was conservative fiscally, avoid going into debt? Johnson
declared, “I’ve seen other entrepreneurs lose control of their companies to venture capitalists; I don’t want that happening to us.” Johnson thought the firm could probably grow
50 percent bigger than its current size over a ten-year period without outside funding;
entering into nursing might push that. Johnson summarized the tradeoff facing Fisdap:
In our business, we want to “do well by doing good.” We’re not out to maximize our
profits at all costs. We enjoy a lot of flexibility because we are internally funded and the
owners have day-to-day involvement in the firm. We are pretty sure we can make money
if we enter nursing; the question is whether it is worth the risk and other tradeoffs that
may come along with it.
Fisdap: The Nursing Opportunity
19
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For the exclusive use of K. Mccrary, 2019.
Notes
1. Jacqueline Gonzalez and Metropolitan Tacoma Community College are disguised at the request of the company. The actual community college visited was
not in the Tempe area.
2. National Registry of Emergency Medical Technicians (n.d.). “NREMT Fast
Facts.” Retrieved July 23, 2013 from https://www.nremt.org/nremt/about/
NREMT_Fast_Facts.asp.
3. National Registry of Emergency Medical Technicians (n.d.). “Certification v.
Licensure.” Retrieved November 24, 2012 from https://www.nremt.org/nremt/
about/Legal_Opinion.asp.
4. According to the National Registry of Emergency Medical Technicians (n.d.).
“State Reciprocity.” Retrieved November 20, 2012 from https://www.nremt.
org/nremt/about/stateReciprocityMap.asp, the five states not following
NREMT certification were: Illinois, Massachusetts, New York, North Carolina,
and Wyoming.
5. National Registry of Emergency Medical Technicians. “NREMT Annual
Reports 2012.” Retrieved November 2, 2013 from http: https://www.nremt.
org/nremt/about/annual_reports.asp.
6. National Registry of Emergency Medical Technicians. (2013). “First Time Pass
Rate Statistics.” Retrieved November 2, 2013 from http://www.nremt.org/
nremt/downloads/2012_FirstTimePassRates.pdf.
7. National Highway Traffic Safety Administration (2011). “The Emergency Medical Services Workforce Agenda for the Future.” Retrieved July 25, 2013 from
http://www.ems.gov/pdf/2011/EMS_Workforce_Agenda_052011.pdf, page 18.
8. National Registry of Emergency Medical Technicians (2012). “2011 Annual
Report.” Retrieved November 23, 2012 from https://www.nremt.org/nremt/
downloads/2011_Annual_Report.pdf.
9. Findthecompany.com (n.d.). Retrieved November 3, 2013 from http://
companies.findthecompany.com/l/24103527/Fusion-Public-Safety-SystemsLlc-in-Richmond-VA Note: the quality of this estimate is unknown.
10. Ascend Learning (2012). Retrieved November 3, 2013 from http://www.
ascendlearning.com/news/growth/.
11. Platinum Educational Group (2013). Retrieved November 3, 2013 from
https://www.platinumplanner.com/Pricing.
12. Platinum Educational Group, LLC (2013). Retrieved November 3, 2013 from
the “Order now” button on https://www.emscat.com/.
13. Global Duns Market Identifiers, listed in the company information section of
the LexisNexis Academic database, accessed November 5, 2013.
14. Pearson (2011). “Brady Publishing and Platinum Educational Group Partner to
Distribute EMS Testing Program.” Retrieved November 23, 2012 from http://
www.pearsoned.com/brady-publishing-platinum-educational-group-partnerdistribute-ems-testing-program/#.ULKfxaVt38s.
15. EMSTesting.com (2013). Retrieved November 3, 2013 from https://emstesting.
com/pricing.
20
Case Research Journal • Volume 34 • Issue 4 • Fall 2014
This document is authorized for use only by Kevin Mccrary in HSA 4140 Spring 2019 taught by SCOTT FEYEREISEN, Florida Atlantic University from Jan 2019 to Jun 2019.
For the exclusive use of K. Mccrary, 2019.
16. Publishers Weekly (2012). “The Global 50: The World’s Largest Book Publishers, 2012.” Retrieved November 29, 2012 from http://www.publishersweekly.
com/pw/by-topic/industry-news/financial-reporting/article/52677-the-worlds-54-largest-book-publishers-2012.html.
17. Pearson PLC (2013). “2012 Annual Report and Accounts 2012.” Retrieved
November 3, 2013 from http://www.pearson.com/content/dam/pearsoncorporate/files/cosec/2013/15939_PearsonAR12.pdf.
18. The Association of Schools of Allied Health Professions (n.d.). “Allied Health
Professionals.” Retrieved November 20, 2012 from http://www.asahp.org/
definition.htm.
19. ExploreHealthCareers.org (2009). “Allied Health Professions Overview.”
Retrieved November 20, 2012 from http://explorehealthcareers.org/en/field/1/
allied_health_professions.
20. American Nurses Association (2011). “Fact Sheet: Registered Nurses in the
U.S.” Retrieved July 26, 2012 from http://nursingworld.org/Nursingbythe
NumbersFactSheet.aspx.
21. Health Resources and Services Administration (2013). “The U.S. Nursing
Workforce: Trends in Supply and Education.” Retrieved July 26, 2013 from
http://bhpr.hrsa.gov/healthworkforce/reports/nursingworkforce/nursingwork
forcefullreport.pdf.
22. RNPrograms.org (n.d.). “How Much Does an RN Program Cost to Finish?”
http://www.rnprograms.org/rn-program-cost/.
Fisdap: The Nursing Opportunity
21
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parucipating in class w uemonstrate iney understand the course material.
Chapter/Case Writing Assignments: You must choose TWO chapters from the
textbook, and their corresponding cases, and write a 1-2 page write-up that applies the
concepts from the chapter to the content of the case. You may choose any of the chapter-
case combinations from the following schedule:
Assignment #1: must be from among Chapters 3, 4, or 5 (and the corresponding cases)
Assignment #2: must be from among Chapters 8, 9, 10 or 11 (and the corresponding
cases)