The intersection of broadband and healthcare will be the key that unlocks a new paradigm
Emergent Financial Group (Emergent) looks for opportunities that demonstrate disruptive business models in early stage healthcare companies. Demographic shifts in our aging population are rendering traditional business and distribution models obsolete. Physical distribution of healthcare services and clinical tools in a nation of 300 million people is expensive and inefficient. By leveraging the new laws of the digital economy these companies present the opportunities that we look for. The healthcare industry has historically spent 3% of revenues annually on information technology and it is estimated that this percentage will quadruple over the next 3 years. The intersection of healthcare and broadband technology allows these emerging healthcare companies to use the internet to distribute healthcare services and clinical tools on a global scale while shedding the expense and volatility of traditional healthcare business models.
A Tower of Babel
The American healthcare system is the world’s largest, most complex, and most dynamic knowledge enterprise. It specializes in knowledge of the most profound and intimate sort – how long and how well people will live, what ails them, and how they can influence their well – being using medical science’s increasingly powerful toolbox.
In fact, this knowledge enterprise, the American health system, is the size of a large industrial nation. At more than $1.3 trillion, it was larger in 2000 than the GDP of France or China and nearly four times the size of all African economies combined. Yet from the standpoint of the use of modern information technology (IT), the American health system is still very much a third world country. Despite the investment of tens of billions of dollars in information systems, the more than 12 million caregivers and support personnel in the most technologically advanced health system in the world are buried in a blizzard of paper and flurries of unreturned phone calls.
Despite breathtaking advances in other sectors of the American economy in applying digital information and communications technologies, medical decision making at the dawn of the twenty – first century remains unhappily yoked to paper, the telephone and doctors memories. Paper medical records, paper prescriptions, paper orders, paper lab reports, paper telephone message slips, faxing paper health insurance verification forms and paper bills of questionable accuracy are all remnants of an early 1970s Information environment.
Not that hospitals and other clinical enterprises lack computers. On the contrary they are filled with them. Almost every desk has a computer, but this pervasive presence has not resulted in practicality or efficiency throughout the healthcare system. A typical large American hospital may have as many as three dozen separate computer systems, ranging from Technicolor youth to green scaled senility. The software used in these systems is written in different code, operates on different hardware platforms, and may be maintained by a dozen or more different vendors whose systems do not interoperate. The typical health enterprise is an informational “Tower of Babel.“
Creating a proactive and responsive healthcare system
Information technology is ending a long and troubled adolescence. Because of advances in hardware and significant breakthroughs in software and network architecture, IT has matured to the point it is ready to create a paradigm shift in the delivery of healthcare.
Using a technology called application service provision, complex software can now be delivered through the internet for practitioners and institutions that cannot afford multimillion – dollar systems installations. Complex software can now be maintained at a single site on remote servers, which medical professionals can reach by way of a web browser and high speed internet connections. Clinical and financial information can be sent rapidly to remote locations and returned to the institutions that need it to make crucial care decisions. This means that small – scale clinical operations, like cardiology clinics, rural health clinics, community health centers and small hospitals will have access to the same powerful applications as wealthy institutions with large IT staffs.
Improvements in mark – up language make searching the internet for and finding disease specific or patient specific information easier and enables the location and retrieval of information based on what it means rather than how it looks on a web page. It markedly reduces the time and cost of finding answers to medical questions and has the ability to convert the nearly 100 million pages of web – based medical information to a searchable database of medical knowledge.
Computer assisted diagnosis will penetrate into the nucleus of human cells, providing an extraordinarily detailed and highly personal map of a patients potential health risks, including the risk of various forms of therapy. This in turn will enable the custom fabrication of therapies to control unique risks for disease and adverse reactions to treatment and extinguish disease before they manifest into illness or death. Genetic information will play a large part in computer – assisted diagnosis, enabling doctors to reduce adverse drug reactions, adjust dosages to optimal levels and avoid wasting drugs on patients who receive no therapeutic benefit. This will allow a new and exquisitely personal and proactive form of medicine.
Powerful computing engines have greatly enhanced mature diagnostic technologies like magnetic resonance imaging (MRI) and computed tomography (CT). These technologies can create live three –dimensional images of internal organs that provide not only vivid anatomical detail but also indicate if the organs are functioning properly. These imaging technologies will eventually be powerful enough to show real time molecular and genetic changes as they are occurring. Thanks to the advances in broadband internet capacity and internal communications networks, digital images can be moved literally at light speed to the desktops of clinicians anywhere in the world without being translated into film or paper.
Information technology will enable expert medical knowledge to pervade our societies, transcending the constraints of geography, language and local infrastructure. IT will eliminate much of the wasteful and inefficient clerical and administrative processes that consume a far larger than desired share of the nation’s healthcare bill. Most importantly, IT will improve medical care itself, reducing medical errors and making better healthcare decisions by allowing medical professionals and their patients to access desired medical knowledge by simply opening a browser.
The healthcare system is vast and fragmented and it is easy for one corner to be unaware of the impact IT is having on the rest of the system. The client companies of Emergent are involved in the technologies that span the entire healthcare spectrum – Clinical decision support, medical imaging, genetic diagnosis, digital prescription technologies, digital business systems in health insurance and health systems, the secure movement of biological product cryogenically in the cold chain – are all connected by the internet to one another. The internet provides both the connectivity for all these different but reinforcing technologies and the lubricant of information flow throughout the health system.
Realizing the potential of this paradigm shift in healthcare services will require a huge societal commitment that could reach $300 billion in the United States alone over the next ten years.
Looming before us is a monstrous implementation headache. Healthcare faces a large skill gap in adapting these powerful new tools and a steep learning curve for the firms providing the technology. However large investment opportunities exist where private investors and the emerging healthcare companies take on the challenge to implement technology to bring about the intersection of broadband and healthcare. The result will be a transformed healthcare system that is powerful, capable and responsive.
Emergent Financial has raised equity for both public and private companies specializing using various financial structures. We take a very active and team oriented approach to helping emerging companies throughout every stage of the company building process. The Investment Banking Group features:
- 12 professionals with significant transaction and industry expertise
- Investment banking services including Private Placements, PIPEs, Strategic Advisory and Debt Capital.
- Client focus that is characterized by long-term relationships and a history of advising clients on multiple transactions
- Expertise in healthcare software companies
- A strong distribution channel with high net worth investors
Emergent targets investments in both private and public healthcare software companies whose initial capital needs are $1 million to $10 million and are exhibiting a platform business model. We will consider investments in all areas of healthcare with an emphasis on web enabled software companies with a disruptive business technology that takes advantage of markets in a state of change.
We communicate with our customers through an innovative, flexible methodology that will be the basis of our joint long term growth and profitability. Together Emergent Financial Group and its customers will build relationships through experience, wisdom, and perseverance.
Emergent Financial Group, Inc.
Member SIPC/FINRA