Premier Diversified Holdings Invests in Telemedicine
- The structure of Premier’s investment.
- What is telemedicine?
- The potential size of the telemedicine market?
- GOeVisit and how is it different than traditional telemedicine?
- GOeVisit’s execution.
- Outstanding questions and concerns I have.
The Structure of Premier’s Investment
Premier Diversified Holdings owns 33.05% of MyCare Medtech Inc per the MD&A published 8/29/2018 (available on CEDAR). Premier has made two investments in MyCare to date. The first was 200,000 units at $70K CAD and the second was 371,428 units for $130K CAD. That gives us a per unit cost basis $0.35 CAD. Each unit is comprised of a common stock share and 0.5 purchase warrant per common share. A whole warrant allows them to purchase shares at $0.50 CAD per share before December 31st 2018. As a result Premier has until the end of this year to decide if they will purchase an additional 285,714 shares of common stock at $0.50 CAD for a total cost basis of 142,857. If Premier decided to exercise the warrants they would be paying 70% premium to the price of their original investments.
Since Premier’s investment MyCare reached a funding agreement with an unknown entity for up to $3,000,000 of which $800,000 has been funded per the latest MD&A. MyCare did not sell common stock in this case. Instead they issued units consisting of senior unsecured convertible debentures and warrants. Unfortunately we do not have detailed information about the securities. So I can’t comment on the conversion feature of the debentures.
What is Telemedicine?
In a nutshell Telemedicine enables virtual visits with medical professionals. How many times have you slogged through traffic, sat in a waiting room just to spend 5 minutes talking to your Doctor? Imagine being able to do that virtually via an smart phone app or video conference.
Here are a few of the benefits telemedicine provides:
- Access to care for patients in remote locations or patients with mobility issues.
- 24 hour access to care.
- Saving patient’s time by reducing the travel and waiting overhead associated with visits.
- Leveraging artificial intelligence to increase care efficiency.
- Reduced care delivery costs.
How Big Is The Telemedicine Market?
It should be no surprise that telemedicine is growing fast. One report I came across estimates the market is almost $30 Billion. Further it estimates a CAGR (compounded annual growth rate) of 19% from 2017-2022.
GOeVisit Smart Exam
GOeVisit Smart Exam is a telemedicine product from MyCare Medtech. According to their Frequently Asked Questions, the Smart Exam platform can be used for diagnosis, treatment and prescriptions:
GOeVisit SmartExam can diagnose, treat and prescribe for more than 300 minor illnesses ranging from coughs, colds and flu, to general medical concerns, minor injuries and pediatric care, all through a mobile apphttps://goevisit.com/about/faq/
Further they explain that they use artificial intelligence to as part of the patient interview process to get more thorough information than traditional physical visits or video based telemedicine visits due to the adaptive nature of the platform:
The intelligent software dynamically interviews patients, using the patient’s answers to gather more, relevant information and support providers in the care delivery process. SmartExam’s artificial intelligence capabilities result in more thorough patient interviews than in-person, or video-based remote care solutions.https://goevisit.com/about/faq/
From what I remember this is a shift from GOevisit’s original strategy. I first looked at their website after reading about Premier’s investment. If my memory serves correctly there was mention of video based telemedicine. I found an old copy of the company’s website on the wayback machine. But unfortunately they only have the front page. I was unable to find an archive of the page that describes the process for a virtual visit. Clearly though they have pictures of video sessions all over the place.
A shift in strategy in of itself is not a red flag for a startup. In my experience it is pretty common. After executing on the idea you get more information which can influence strategy. A few benefits to this new strategy are:
- Forcing patients to go through the adaptive interview app will likely result in more consistent data that can used to drive the back end AI.
- Easier to scale the number of patients you can support when you don’t need a human directly interacting with every patient in real time.
- Overall you will be able to quantify the patient experience better. Doing that type of analytics on a video stream is a hard problem on many fronts. By simplifying it to interview questions and data entry you can get meaningful info out of the data such as the responses and response times.
- Video conferencing can be intimidating. I have noticed that some people are reluctant to use video conferencing apps such as Apple’s Face Time. On the flip side video for some can feel like a more personal experience and similar to an old school visit.
To drive this strategy shift GoEvisit is leveraging a platform built by Bright.md. Smart Exam is Bright.md’s AI backend. If you have first hand experience with Smart Exam please contact me with details of the experience. I imagine that a typical experience looks likes this:
- Patient answer questions in Smart Exam about symptoms or issues.
- Smart Exam adapts questions based on patient response to zone in on a diagnosis.
- Smart Exam sends data along with diagnosis to medical professional.
- Medical professional reviews data and diagnosis to confirm.
- Once medical professional approves the results are sent to the patient.
Bright.md’s website says that the platform can diagnose 400 different ailments and it can rolled out in 10 weeks. Other health care networks are rolling it out per Bright.md’s press releases.
Looking at the Apple App Store and Google Play Store reviews the results are not encouraging.
The ratings look ok at 3.5 stars. However as of this writing all the comments on the Apple App Store are negative. The negative comments could be planted by competitors or someone who has a bone pick to with the company. But the truth is only 13 people have rated it and there is not one positive comment. Although it must have mostly positive ratings to get a 3.5 stars rating. Needless to say with only 13 ratings it does not appear to have gotten many downloads.
At first glance the Google Play store looks a little bit better. Again 3.5 star rating. Only 14 reviews. But there is a mix of negative and positive comments! Unfortunately at least one of those positive comments is from Clay Swerdelian who was VP of Corporate Development for GOeVisit at the time he wrote the comment.
If we look at a GOeVisit competitor Akira it seems they are doing much better. 4.8 average rating on the Apple App Store and over 394 ratings. A big difference.
GOeVisit’s shift to leveraging Bright.md’s platform sounds encouraging. However if the app ratings or lack there of are any indication it looks like execution is lacking.
- Will Premier exercise their warrants at the end of this year? Sanjeev has indicated on the Corner of Berkshire and Fairfax message board that Premier has working capital and no funding commitments to existing investments. Does that mean he plans to let the warrants expire?
- Does GOevisit have the right team to execute? On LinkedIn I can’t find any employees with significant tech experience. It is a red flag to me that I can find any full time tech people on LinkedIn. The platform and app need to work well and provide a great user experience. That can be very hard to achieve when outsourcing everything.
- I don’t know much about health care in Canada. As a result I have some questions about the GOeVisit model which I can probably answer after some research. For example in the US it seems that care providers are building their own experience with Bright.MD. However in the Canadian market there seems to be stand alone entities. Almost like virtual versions of the emergent care clinics you see in the us. Why is that the case? I need to do some more digging to find out.