Telemedicine Venture poised for growth

Edition: May 2003 - Vol 11 Number 05
Article#: 1531
Author: Repertoire

Two years after its founding, PDSHeart – a cardiac telemedicine company founded by a couple of former PSS reps – is enjoying success and even some respectability. What’s more, the company appears to be following in the footsteps of its founders’ erstwhile employer insofar as the company’s growth is concerned.

Sean Heyniger and Greig McCully founded Stockbridge, Ga.-based PDSHeart in 2000. In March of this year, the company became the nation’s first telemedicine company to receive accreditation by the Joint Commission on Accreditation of Healthcare Organizations.

Comparing JCAHO accreditation to the Good Housekeeping Seal of Approval, Heyniger points out that accreditation “forced us to put processes in place to ensure continuity of care.”

Heyniger, McCully and others at the company spent 18 months preparing for the JCAHO inspection, examining operations, procedures, facilities, staff and equipment at its two facilities. The company’s administrative headquarters, Holter clinic and pacemaker lab are in Conyers, Ga., while its monitoring clinic is in West Palm Beach, Fla.

“Considering how quickly we’re growing, we had to figure out a way to build a very solid infrastructure for our company,” says Heyniger.

There’s little doubt that the company is growing rapidly. Today, PDSHeart employs 155 employees. Two years ago, when Repertoire first reported on it, the company had just 55 employees. The business has grown 45 percent annually from a revenue standpoint, and is projected to achieve more than $20 million in sales this year.

“We’ve beefed up our call center, billing department and shipping department,” says Heyniger. What’s more, he plans to expand the company’s field sales force from 21 today to 30 by the end of 2004.

After acquiring two telemedicine companies (HeartAlert and Rythmark) in March and April 2001, PDSHeart was expecting to close on a third acquisition in April, according to Heyniger.

“We’re achieving some brand recognition in the market,” adds Heyniger. Indeed, PDSHeart services 3,500 clinics and 110 hospitals, plus 30 academic teaching facilities. Sixty percent of its referring physicians are cardiologists, and 30 percent are internists and primary care practitioners. In fewer than three years, the company has monitored more than 100,000 patients in 40 states.

Services Provided

PDSHeart offers three services:

• Event monitoring

• Holter monitoring

• Pacemaker testing

Event monitoring. The majority of PDSHeart’s current business is event monitoring, says Heyniger. Here, the physician gives the patient a cardiac monitor to be worn for a certain period of time, perhaps 30 days. When the patient feels a cardiac event occurring, he or she activates the monitor. When the event is concluded, the patient downloads the data over the phone to PDSHeart.

“While the patient is still on the phone, our cardiac techs – all of whom are either paramedics, RNs or certified cardiac technicians – edit the data,” says Heyniger. If they detect certain pre-established emergency or life-threatening criteria, they call 911 immediately and notify the referring physician. The data is faxed, e-mailed or Web-published on a secure site for the physician’s review.

Holter monitoring. The company’s WebHolter system allows the physician to upload his or her patient’s Holter record to the PDSHeart Web site. The PDSHeart technicians edit the data, format it and send it back to the doctor within a couple of hours.

The Holter service offers doctors a number of benefits, says Heyniger:

• It frees the doctor from having to pay someone to edit the reports.

• It’s more accurate than some other remote Holter services, because PDSHeart’s own technicians – not a computer – scan the data. “Their level of expertise is much broader than what most physicians could afford to have in their offices, five days a week.”

• It’s fast. PDSHeart can return the Holter information to the doctor in a couple of hours, not three to five days, as some remote services offer.

Pacemaker testing. PDSHeart has only recently begun pursuing this business, says Heyniger. In this offering, PDSHeart calls the pacemaker patient on a regular basis, such as six times a year. The patient uses special equipment to activate the pacemaker and transmit data on its performance to PDSHeart, which forwards its findings to the doctor. Using the Holter for Windows Pacemaker Analysis software, the system can detect and automatically store such events as pacer non-sensing, pacer non-capture and pacer inhibition for further analysis.

In all three service-offerings, PDSHeart rents the necessary equipment to the doctor, who then provides it to the patient. The doctor sends back the equipment after the patient has finished using it. “It’s like having inventory on consignment,” says Heyniger.

In most cases (approximately 85 percent), PDSHeart is reimbursed for its services by Medicare, Medicaid or private insurance companies. In the remainder of cases, PDSHeart contracts directly with the doctor, who takes care of his or her own billing.

A third party manufactures the company’s equipment, but PDSHeart does design the software and Web applications to make the system work. “Currently we do not sell any products or software,” says Heyniger. “But we have seen a lot of interest in this from physicians.”

Future Growth in Store

Heyniger says PDSHeart will grow “organically and through acquisitions.” He predicts that the company’s revenues will approach $100 million by the end of 2005 (compared to $20 million today), and that it will explore the possibility of introducing telemonitoring solutions for other disease states, such as diabetes, hypertension, high-risk obstetrics and pulmonary disease.

Heyniger says that just as PSS exploited the industry shakeout that was occurring in the physician supply business 10 to 15 years ago, so too is PDSHeart poised to do the same in the telemedicine market. Owners of small, regional companies that lack their own sales force are choosing to sell out to larger companies. “It’s almost identical to the opportunity that PSS had,” he says.

With 20 sales reps in the field, it’s difficult to get the word out about PDSHeart. That’s one reason why the company plans to add another 10 reps in the future. Acquisitions will help, too.

Still, reaching the 15,000 cardiologists with whom PDSHeart has no relationship will be a daunting task, says Heyniger. And an even bigger opportunity is the 250,000 primary care and internal medicine practitioners, who are the ones who should – and probably will – do much more cardiac screening and monitoring in the future, says Heyniger.

“It all comes down to point-of-care testing,” Heyniger notes. “These tests allow the primary care doctor to interpret and diagnose [cardiac activity]. It’s a way to keep patients in his or her office, and to generate revenue for the doctor.”

Telemedicine offers the promise of affordable healthcare that can be accessed by many people, says Heyniger. “As patients become more responsible for their own healthcare, there’s a huge opportunity for direct-to-consumer marketing.” Today, when someone has chest pain, they rush to the nearest emergency room. But in the future, they may subscribe to a telemedicine service, whose technicians are on call 24 hours a day. Those technicians can immediately interpret their cardiac events and either reassure the patient, or see that he or she gets immediate care.

“And this can happen whether you’re having a heart attack, your child is having an asthmatic reaction or your pregnant wife is having problems with her baby,” says Heyniger, who’s always looking ahead.