Vitalhub (VHI.V ) is a medical services supplier, producing applications that consolidate the daily processes of medical care providers.
On February 21, 2019 VHI announced that it has plans to enter the global patient flow market through a targeted acquisition strategy.
When you attend an brainstorming meeting at a tech start-up, some bright-eyed MBA-grad will inevitably shoot her hand and say, “What problem are we solving? Let’s talk about that first!”
Indeed, let’s talk about it.
Patient flow is the movement of patients through a healthcare facility. It involves physical resources, real-time data sharing, communication, coordination – from admission to discharge.
The “Patient Flow market” is the mother of all problems.
The existing status quo is so clunky and inefficient that it drains billions of dollars from the medical system and causes thousands of deaths.
A recent Johns Hopkins study claims “more than 250,000 people in the U.S. die every year from medical errors, other reports claim the numbers to be as high as 440,000”
Astonishingly, medical errors are the 3rd leading cause of death after heart disease and cancer.
The authors of the Johns Hopkins report, define a death due to medical error as, “one that is caused by inadequately skilled staff, error in judgment or care or a system defect.”
“It’s the system more than the individuals that is to blame,” states the report, “Based on a total of 35.4 million hospitalizations, there was an incidence rate of 251,454 deaths per year — or about 9.5% of all deaths.
VitalHub has signed a Letter of Intent (LOI) for an acquisition with “an internationally based patient flow vendor – although there is no guarantee, VHI expects this LOI to materialize into a closed transaction”.
The announcement of an LOI wouldn’t normally cause much of a heart-flutter – because – quite frankly – it means jack shit (either party can walk away with zero negative financial consequences).
In the case of Vital Hub, the announcement acquires some gravitas, because VHI has history of finding great opportunities (accretive to its bottom line), signing LOIs, then closing the deals.
VHI’s robust two-pronged growth strategy, targets growth opportunities within its product suite while pursuing an aggressive M&A plan.
In North America, inefficient patient flow is attributed to an average $49,500 loss per bed, per year, with an average of 45 days lost per bed per year,” states VHI, “Some estimates have cited the current North American cost of inefficient patient flow to be $900 billion.”
Problems waiting to be solved:
- hospital gridlock
- low demand capacity
- poor care coordination
- low bed turnover
- low cost containment
- poor discharge planning
- high wait-times
- inefficient resource utilization.
The VitalHub team has previous experience in the patient flow market through the growth of Medworxx, a Healthcare IT company that specialized in patient flow solutions – and was sold to Aptean, in October 2015.
Ontario is now transitioning towards “value-based care models” – designed to improve efficiencies and lower costs across the healthcare system.
VitalHub’s patient flow technology will address the ‘hallway medicine’ issue, in support of the Ontario government initiative.
“The patient flow market represents a great opportunity for us to broaden our existing portfolio, using strategic acquisitions to fuel meaningful growth,” stated Dan Matlow, CEO of VitalHub. “The capacity of healthcare systems, globally, is extremely strained, with rising demands continuing to outpace available supply. Inefficiencies are costly, and more tools need to be developed to address this problem.”
On November 26, 2018 VHI released its Q3, 2018 financials
Q3, 2018 VHI Financial Highlights (figures rounded):
- Revenue of $2.1 million
- Revenue increase of 1,224% over the same period last year.
- Revenue increase of 14% over Q2, 2018
“When the system works well, patients flow like a river,” states Analytics Magazine, “When the system is broken, patients accumulate like a reservoir. Good patient flow means that patient queueing is minimized; poor patient flow means that patients suffer considerable queueing delays”.
The global patient flow solutions market is projected to reach US$2.53 billion by 2025, growing at a CAGR of 21.32% from 2017 to 2025. (Verified Market Research, August 2018).
Full Disclosure: VitalHub in an Equity Guru marketing client and we own the stock.