A Start-Up Company Analysis

HealthSpot is a company that hopes to offer medical services via face-to-face teleconference technology at owned/leased company designed kiosks. It will target limited disease/diagnoses and has some self-contained technology that can be used to transmit information to the physician (heart rate, bp, temp etc.). While the specifics of who will provide the medical services is as yet uncertain, they have engaged a large general medical group in Ohio to participate. It is hoped that such a service will be particularly attractive to pharmacies and the like who might benefit from being an end stage provider for prescriptions that are generated from the medical encounter.

This will provide two needed aspects in the medical system, economy and convenience. Without a doubt, insurers and the government are eager for at least economy. My concern is that neither of the direct participants, physician or patient, are well motivated for either and have not shown to be willing to sacrifice personal, direct interaction in the past. The very nature of a new delivery system with its inevitable new problems and unanticipated difficulties will make the legal obsessed physicians shy. Patients balk at even well qualified PA's and NP's face-to-face; whether or not they would accept a MD at teleconference length is yet to be seen. Another question is the accuracy of the diagnostic/therapeutic encounter. Will trials be necessary?

The management side is very strong with a willingness to spend money on good designs done by companies of high quality. This has attracted adequate funding, at least initial funding, although more rounds are anticipated. IP is adequate but probably not exclusionary.

But the basic question is whether or not such a system can be driven by third party payers and by-pass the patient and physician. If it can, it will be a screaming success. The experience in the ER, which has become a primary care provider for a sizable part of the population at tremendous cost and inconvenience, is not encouraging. On the other hand, something must be done with these costs, regardless of what the public--or the physicians--want. And the government has become increasing willing to dictate changes in spite of objection. They have been willing to shut coal fire plants down regardless of consequence, are willing to raise taxes on investments even if it reduces tax revenues. That type of government is willing to legislate anything and, in that scenario, might create a success out of HealthSpot by fiat.