It has been said that the coronavirus (COVID-19) pandemic poured rocket fuel on healthcare. With exponential innovation, the industry has been introduced to plenty of start-ups, creating much noise and competition.
One concrete shift is that virtual care and remote monitoring will be staples in the future of healthcare.
Cloud DX (TSX-V:CDX, OTCQB:CDXFF), a MedTech start-up based in Kitchener, Ontario, has been quick to step into the breach, signing contracts and winning awards for its Connected Health platform.
In its latest deal, the company announced on December 1, 2021, that Medtronic Canada ULC, a subsidiary of Medtronic PLC (NYSE:MDT), the world’s largest medical technology company with a market capitalization of over $150 billion, had signed an exclusive national agreement to provide virtual healthcare to patients across Canada.
READ: Cloud DX partners with Medtronic Canada ULC to provide virtual healthcare to patients across Canada
Just weeks before its Medtronic announcement, Cloud DX released clinical trial findings of its AcuScreen application. The Cloud DX technology can detect tuberculosis (TB) using a cell phone in a move that could help speed up early detection of the disease that causes 1.4 million deaths annually.
The company noted that TB is the world's deadliest respiratory infection after coronavirus (COVID-19) yet is an entirely treatable and preventable disease. Currently, the best frontline screening tool is a chest X-ray, which is expensive and inaccessible to many in developing countries.
A study in Mozambique has sought to determine the feasibility of front-line tuberculosis triage using AcuScreen, the smartphone component of Cloud DX's winning Qualcomm Tricorder XPRIZE technology, Vitaliti.
The technology uses artificial intelligence (AI) to analyze the sound of a person coughing to detect whether that person has tuberculosis with a very high level of accuracy that exceeds the WHO standards for a frontline screening tool for tuberculosis.
The company said a simple smartphone app that is as effective as a chest X-ray in detecting tuberculosis can impact hundreds of millions of lives and is just one example of how it is using its technology to disrupt telemedicine and remote patient monitoring.
Proactive asked CEO Robert Kaul what sets Cloud DX apart in the virtual care and remote patient monitoring space.
What gives Cloud DX a competitive edge in the healthcare sector?
What's different is that of all the competition that you could care to name, to my knowledge we're the only company that invents our own medical devices from scratch, gets them approved by regulatory authorities, brings them to market and integrates them into a platform for virtual care and remote monitoring.
Unlike our competitors, we are involved in the entire ecosystem from the patient, all the way through the clinician to the EMR (electronic medical records) we own the entire channel in a way that is unique. This allows us to do certain things that our competitors can't do. We measure more vital signs than anyone else and have been proven accurate in multiple academic third-party, rigorous studies. Our vertical integration not only enables us to gather the most comprehensive data, but it also provides us with ultimate cost and channel control. On top of this, managing both the patient and clinician interaction points lets us respond quickly to user requests – which is why we are often touted as the platform that actually works for clinicians, aging populations, and also has 100% user satisfaction.
Another area where we are different is our commitment to innovation. We are first movers in our space, with the dedication and ability to support academic studies with millions and millions of dollars in funding from various sources. Studies that are published in peer-reviewed journals. These studies provide proof that healthcare systems can use to evaluate remote monitoring, and prove beyond a doubt that Cloud DX (TSX-V:CDX, OTCQB:CDXFF) technology has outstanding outcomes for our patients. Almost no other competition is doing that.
When you put it all together, we're leaders in the space. The first movers in many aspects of delivering virtual care in a very efficient, patient-friendly, provider-friendly way that really helps with our sales and business development. It helps us grow quickly. We're also constantly innovating, a passion for us and a competency we support and develop within Cloud DX (TSX-V:CDX, OTCQB:CDXFF), it’s at our core. We are simply better innovators than a lot of the other companies in the space.
How fast is your Connected Health kit growing in North America and what's the scope for further expansion?
The scope for remote monitoring advancement is (pardon the pun) … virtually limitless. Despite the growth in virtual care during the pandemic, the reality is that there are over 50 million adults in America who qualify for reimbursed remote monitoring of their chronic conditions. These are patients who have more than one chronic illness, as identified by CMS.gov, which is the American Centers for Medicare & Medicaid Services.
As many patients are covered by Medicare and, in some cases also by private insurance, most can be remotely monitored by their physician and the cost of that monitoring is covered. While nearly or fully reimbursable under the American system, across the entire industry the number of patients being remotely monitored is well under a million, closer to half a million. It's a relatively small portion of the large and (unfortunately) growing chronic care patient base.
We are at the point in time where it is just beginning, the possibilities for growth are immense – and that's just in North America. And of course, there's the whole rest of the world where there are eight billion people, very few of whom are currently being monitored remotely for anything.
There's a long road ahead of us but our goal at Cloud DX (TSX-V:CDX, OTCQB:CDXFF), as we have stated several times, is to grow our business initially as quickly as possible; cash flow positive at 9,000 patients and then 100,000 patients on our system. And we're on track to do that through already announced partnerships and contracts, which provide us with access to 2 million qualifying patients.
What are the benefits to the healthcare system, financially and operationally, of remote patient monitoring systems like yours?
I’ll refer to results published recently in the British Journal of Medicine by McMaster and the team at the Population Health Research Institute, who did a very definitive, nearly 1,000 patient randomised control study of remote monitoring after surgery. It’s the first study that provides definite proof that remote monitoring generates savings (reducing re-admissions) and improves patient outcomes (less pain and fewer medication errors).
Of 905 patients of the 9 participating hospitals across Canada, half of that group were prescribed a Cloud DX Connected Health and were monitored closely by nurses at a virtual command station, almost as if they were still in the hospital. Vital signs were taken on a regular basis and nurses had constant communication with the patient. The patient could phone 24 hours a day, send a text message, or immediately avail themselves of a virtual visit and receive immediate care.
The control group was patients receiving standard of care, which really meant they went home from the hospital with nothing and were expected to go see their physician 30 days later.
What the researchers found was eye-opening: 30% were sent home with medication errors, and not one, but often two drug errors! Something unnoticed in the standard group that did not go home with the kit. Of those errors, the majority were corrected because of that immediate instance of understanding there was a medication error, as the patient likely presented concerning vital signs. That is a really shocking headline, there's a 30% chance of going home with the wrong medication.
We also found that at seven days and 14 days, based on the interactions with the nurses, 14% fewer Cloud DX patients reported severe pain. At fifteen days, they found that 10% fewer reported severe pain. To be clear, this was because of care escalation resulting in care team intervention such as correcting medications, prescribing antibiotics in case of a wound infection, or a variety of other interventions. No one should go home from surgery and be in severe pain, so to be able to reduce that tremendously was a huge outcome for the study.
And from a systems point of view, what about cost? The fascinating point was that in that portion of the study, of monitored patients, through care escalations from nurses alerting physicians to concerns, 5% fewer had to go back to the hospital or be readmitted to hospital and that is a huge cost saving for the whole system. Although 5% doesn't sound like very much, when compared to Canada’s re-admissions cost at $1.8 billion annually, a small 5% reduction creates $90 million in annual savings. Savings that can be re-introduced to support cost reduction measures such as remote monitoring.
This is clear evidence that remote monitoring absolutely has a tremendous impact both on patient wellbeing and on efficiency and cost in our healthcare system.
As you develop more solutions, such as the Connected Health, Vitaliti, and the AcuScreen app, what is the attraction for investors?
It means we’re just at the beginning. We are on the cutting edge of solving gigantic problems for enormous groups of people, which is how you build a big company. Not only can we deploy very quickly because it’s typically a software program, but also it means we have more than one way to make money with both upfront hardware and SaaS (Software as a Service) revenues.
When you look at our space, most of the comparable companies in our space simply have one major line of business. Having multiple independent but related streams of revenue gives Cloud DX an opportunity to turbocharge our growth in the coming years.
What are your immediate priorities?
What we're focused on right now is an initial goal of first reaching 9,000 patients on our system. The reason that is a very important number for Cloud DX is because at that point we anticipate becoming cash flow positive.
Once we're cash flow positive, we will exponentially grow and strengthen our leadership position - we earn in the neighbourhood of C$900 in annual recurring revenue (ARR) for every compliant patient on our program. That's the approximate reimbursement coming from US insurance. That means for every 1,000 patients on our system we generate C$900,000 in top-line revenue. 9,000 patients is step one to our goal of 100,000 patients; meaning we have created a C$90 million a year annual recurring revenue (ARR) business. That is the foundation that may allow us to (take over the world and) become a global brand, which will be very exciting.
Contact the author at stephen.gunnion@proactiveinvestors.com