VIDEO: WELL Health Technologies Corp (CVE:WELL) Digitizing Canadian Health Information
WELL Health Technologies Corp (CVE:WELL) (OTCMKTS:WLYYF) (FRA:W7V) CEO Hamed Shahbazi shares the company’s plans to modernize and digitize health information in Canada. Shahbazi recognized that the lack of scale in the Canadian health system was a barrier to digitalization so WELL Health to matters into its own hands and now the company is the largest owner of clinics in British Columbia. 600,000 patients visit WELL Health clinics annually and most of the care provided at its clinics is covered by provincial health care. The Canadian Health care space is a $250 billion industry and WELL Health plans to grow its network of clinics nationally and internationally. Despite the company’s participation in direct patient care, Shahbazi anticipates WELL Health’s emergence as a digital medical service provider.
James West: Hey, welcome back. My guest this segment is Hamed Shahbazi, Chairman and CEO of Well Health Technologies Corp., Trading on the TSX venture under the symbol WELL. Hamed, welcome back.
Hamed Shahbazi: Thank you, it’s great to be back.
[stock_chart symbol=”WELL:TSV” align=”left” range=”1Y”]
James West: It has been a while, so the last time I talked to you, you were diligently building TIO networks, which you exited with a buyout from, was it, Apple?
Hamed Shahbazi: PayPal.
James West: PayPal. Close enough, you know? So now you’ve got this new company Well Health Technologies Corp. tell me, what is the business model?
Hamed Shahbazi: We’re really focused on modernizing and digitizing primary health care in Canada. We’ve got a great medical system here in Canada, lots of affordability and access, but if you’ve been to a walk-in clinic or a family care practice lately you might notice that it’s not very digital, meaning that, you know, it’s hard to create an appointment online, or digitally interact with the clinic, or even be exposed to your own personal health information.
And so these, you know, while many of the 40 countries that have modern medical systems have some of these issues, Canada is actually fairly under-digitized compared to many of those countries. And so if you compare, for example, to the United States, an HMO like Kaiser Permanente will deliver over 50 percent of all its patient visits through virtual care, like through a piece of glass; we’re probably a very small fraction of that.
And so we jut saw an opportunity, you know, as a tech guy, you know, saw an opportunity to help solve some of those problems. And what we’ve seen is that some of that digitization deals with lack of scale. So we have a very fragmented primary health care system here where owners sort of manage, doctors sort of manage their own clinics and also see 40 patients a day, and technology doesn’t really work well in a non-scaled environment because it’s expensive and it’s difficult to implement.
And so we’re trying to resolve that through building our own scale. So we’ve made a number of clinical acquisitions and are now the largest owner of clinics in British Columbia.
James West: Oh, interesting. And so then, this will be paid for through the health care systems, or through what mechanism?
Hamed Shahbazi: Yeah, so when – we own the clinics, but most of the payment for the services is coming through the health care system. So we have a single care environment. We have non, you know, products and services that are not covered by the government, but the base product, which is you seeing your doctor, is essentially reimbursed through, you know, MSP in BC. We’re in BC today, not yet in Ontario, but the equivalent, obviously, would be OHIP.
James West: I see. And is your ambition to cover the entire Canadian market?
Hamed Shahbazi: Yeah, absolutely. We wanted to build scale and density and BC, and then we want to sort of replicate that in other markets. So we’re definitely looking at Ontario very closely.
James West: Okay, and so ex of Canada, then, is there is a global opportunity for this as well?
Hamed Shahbazi: There really is, yeah. There’s –
James West: That’s the investment of Sir Li Ka-Shing.
Hamed Shahbazi: Yeah, an incredible guy who happens to be the owner of the largest chain of pharmacies in Asia. And so already involved in health care, you know, service category, effectively. As you may know, pharmacies are already starting to provide some clinical services, you know, in the US; a lot of, you know, the big pharmacy chains are already offering walk-in medical services and so forth. So yeah, I mean, and in China we see an emerging clinic scene, and as we grow our intellectual property here and our software, we want to be able to participate in that marketplace.
But for the first little while, we’re going to be focused in Canada, here. We think there’s a big opportunity here.
James West: Sure. So I mean, are you cognizant, or are you sort of conversant with the Chinese system? Is there a digitized interaction there, or is that, you know, again back to why Li Ka-Shing is involved?
Hamed Shahbazi: So I think what we see in China right now is mostly a culture of big hospitals where people go in order to get health care.
James West: Oh, like Canada.
Hamed Shahbazi: Right, right. You would go there for, like, a flu, or you would go there for something a lot more serious. But because of the sheer load, I think what’s happening is, there’s an emerging clinic scene for disease types that are not as – you know, sort of episodes that are not as serious, and so yeah, we haven’t done anything there yet, but I think we do see an opportunity.
In the case of Li Ka-Shing, as you know, he’s a very prolific investor in Canada. You know, at one point in time, he was the largest, you know, shareholder of CIBC, and owns Husky Oil, and so you know, very, very involved in Canada. So we’re definitely very happy to have him on board. You know, they see an opportunity in what we’re doing in Canada.
James West: Right. Interesting. So then, how fast will this scale up?
Hamed Shahbazi: It’s moving very quickly. There’s basically three types of, I guess, acquisitions or three vectors to the business model: you know, insured services – so this is where you see your doctor, there’s no fee to you. There’s a whole episodical elective fee opportunity, you know, fee for service in terms of, you know, things that are not covered by insurance that you could acquire, and that’s a portfolio of services that we’re building and adding.
And then really what we’d like to build it software and workflow all around this sort of more enterprise-grade, you know more digital clinic environment. And we’d like to then license that to other people’s clinics. So what you’ll see us do is emerge as a digital device provider. Our go to market strategy made a lot of sense to go in through the clinics, to really master this business and be able to then have the authenticity to say Hey, we’ve deployed software, it works, were now going to license that to other peoples clinics. But I think what you’ll see is us continuing to grow our own clinical business, as well.
James West: Wow. So, but evolving it as a software as a service ultimately, and that’s interesting to me, because that’s what you did with TIO Networks, really, was a software as a service that ultimately was adopted by some of the biggest payees in the service industry.
Hamed Shahbazi: Right, exactly.
James West: Ok, so then, why is it that the opportunity exists for you to come along and pick up the strands from these, you know, sort of fractured opportunities as you say – why hasn’t some other large technology provider like IBM or Siemens come in and recognized the opportunity, and what’s to stop them from doing so in the future?
Hamed Shahbazi: Yeah, and I think a couple of large companies have. Telus has been very successful in this category; Telus Health has deployed a lot of capital, done a lot of very interesting acquisitions, and I think been very successful. You know, we watch them very carefully and closely, and we could even have partnership opportunities with them.
And others, I think Telus is probably the most notable – Loblaw made a very important acquisition last year of an EMR company last year called QHR, $170 million, it was a really nice premium on that company’s EBITDA, and so I think there’s a lot of enthusiasm in the space. I mean, we have a quarter of a trillion dollar health care market here in Canada; it’s one of our biggest sectors, and it’s growing.
James West: Okay, so then, barriers to entry in terms of other competitors: not so much?
Hamed Shahbazi: Well, I think there are probably fewer barriers to entry in terms of becoming a clinic owner, but I think that, you know, being able to then cross the chasm to being a technology service provider, and really, what we’re doing is, we’re sort of re-imagining the business of primary health care from being, you know, just a place where you go and visit your doctor to perhaps a place for you who for the entire allied professional health experience. So your doctor wants you to see a sleep expert, you know, that person would be within the group. Or women’s health, or men’s health, you know, just essentially being able to make those referrals in a very digital and very cohesive way, and having all that data in one place so that you don’t have various different versions of you in all the different electronic medical record systems.
And so we believe there’s an opportunity here to make all of that more cohesive and just easier for the patient experience.
James West: Sure. You already reported $2 million in revenue last quarter, and it looks like you’re getting very close to profitability here. Will that profitability be negatively impacted in the timeline because you’re going to reinvest capital into expansion and additional technology features?
Hamed Shahbazi: Well, the $2 million of revenue came from about the six clinics that we owned. We actually November 1st closed on another 13 clinics, which gets us closer to about 30 million in revenue, because we’re now above 600,000 patient visits a year, and actually the clinics are profitable. You know, we have a profitable EBITDA contribution that comes from the clinics, but we are standing up shared services at headquarters, so that’s why we’re not profitable today. But we’re not bar from being profitable.
James West: Sure.
Hamed Shahbazi: So I think you’ll see that we’ll, again, be investing in digital technologies, building out our scale, and I think the story’s developing very nicely. And you know, we’re kind of ahead of plan in terms of where we wanted to be in our scale.
James West: Sure. Well it sounds like another great idea that you’re executing on with aplomb and with a great investor base by the looks of things. We’ll follow with interest, Hamed, and have you back soon. Thanks very much for joining me today.
Hamed Shahbazi: Thank you so much. It’s really a pleasure to be back.