Update: On December 17, Premier Health Group Inc. announced that it has signed a binding LOI to acquire Cloud Practice Inc., a Canadian medical software application company whose products include a cloud-based electronics medical records system, medical billing software and on online patient portal. The electronic medical records system is used by 287 clinics with more than 2.8 million registered patients, while the medical billing system processes upwards of $30 million in payments monthly.
Ron Struthers wrote in Struthers Resource Stock Report on December 17 that the acquisition "is going to vault PHGI into a major player in Canada's healthcare. They also have plans to expand internationally."
Technical analyst Clive Maund on December 17 noted, "This morning there was MUCH BIGGER NEWS out of the company that is expected to drive the stock sharply higher, as it is acquiring Cloud Practice, which will give it access to a vastly greater number of patients. IF HOLDING STAY LONG, and it is an immediate buy as soon after the open as possible, provided that it has not gapped up too much."
Medical costs continue to spiral up in Canada, and an aging population puts greater demands on the medical system. At the same time, the country is facing a shortage of primary care doctors and nurses, with rural areas being especially hard hit.
Premier Health Group Inc. (PHGI:CSE; PHGRF:OTCQB; 6PH:FSE) is working to find solutions to these challenges by combining human expertise with emerging technologies such as telemedicine and artificial intelligence.
This summer Premier Health acquired HealthVue, an operator of four high-tech clinics with 110,000 patients in British Columbia, for CA$1 million in cash and CA$3 million in Premier Health common shares. Dr. Essam Hamza, founder of HealthVue, has become Premier's CEO. He has long championed the use of telemedicine for his patients.
"We believe the telehealth industry is set for material growth over the coming years." -Ryan Daniels, William Blair
"The present system is inefficient and unsustainable," Dr. Hamza told Streetwise Reports. "Some 39% of emergency room visits, which are very expensive, could be prevented if patients had better access to primary care."
"Primary physicians are burning out; doctors are preferring hospital or specialist work because they provide better work-life balance," Dr. Hamza noted. "About 15% of Canadians don't have a primary care physician. This is especially dire because you can't see a specialist without a referral from a primary care doctor."
"Seniors are at especially high risk because 59% can't get a same- or next-day appointment. About 7 in 10 Canadians avoid seeing a doctor when they are sick," he added.
The Canadian medical systems use electronic medical records, but according to Dr. Hamza, doctors aren't taking advantage of the digital system.
The HealthVue platform was designed to change that. "We are developing an app that uses artificial intelligence to triage patients and uses telemedicine to connect medical personnel with the patient," Dr. Hamza explained.
For instance, if a patient has a headache, the app will take the patient through a series of questions about the headache. "The app then passes the patient virtually to the doctor who will have all the information the patient entered, as well as a potential diagnosis and treatment arrived at by the artificial intelligence computer drawing on the most recent studies and up-to-date treatment options, saving the doctor 5-10 minutes of questioning and giving the doctor a higher level of confidence," Dr. Hamza stated.
Premier states that this system saves the medical practice the need for a medical office assistant or someone in the middle between the patient and the doctor. And it is scalable.
"Premier is clearly in a bull market." - Technical analyst Clive Maund
"We've been piloting telemedicine in our clinics for the last year and a half, and patients have been very receptive. Billing in British Columbia covers telemedicine visits. The doctor is paid the same to see a patient in person or virtually. So it has proven to be very efficient and convenient, and allows patients deal with health issues before they necessitate a visit to the emergency room," Dr. Hamza said.
Premier, through the HealthVue system, is planning to keep services in its ecosystem that right now it is losing. "We are adding our own counselors to offer online mental health help, our own cannabis clinics, our own specialists," Dr. Hamza explained. And the telemedicine system "actually adds to the number of office visits rather than cannibalize them. A mother with young children at home isn't going to drag the kids to a clinic so that she can ask a question, but she will connect from home."
"Also, looking ahead, we plan to begin health monitoring using devices such as blood pressure cuffs, and all that data can be connected via Bluetooth in real time to a patient's chart," Dr. Hamza stated. "The doctors, nurses and staff will have access to a patient's numbers and can follow whether he or she is controlling the medications properly. Through artificial intelligence, data can be sent to the doctor before the doctor sees the patient."
In October, Premier announced that it had selected Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB) as its exclusive technology partner, providing Premier with a "HealthVue-branded telemedicine, remote monitoring & AI solution for its clinical staff and more than 100,000 active patients."
"The HealthVue patient app powered by Reliq Health's technology platform will allow patients to book appointments, see their GP or a specialist via telemedicine, review their own chart, chat with clinic staff and pharmacists, refill prescriptions and share health data collected in the home with their HealthVue care team," said Dr. Hamza. "Telemedicine visits are already covered by the provincial health insurance plans in several provinces so there is no cost to the patient to access this service, which we will ultimately be able to offer to patients 24/7. The technology component of our practice is easily scalable, low cost and high margin, allowing us to rapidly grow our business and create significant shareholder value."
In November, Premier announced that it was entering the pharmacy market, "via acquisition and/or launching a new Canada based pharmacy in H1-2019" and it just announced an agreement to buy a pharmacy.
Premier signed a binding letter of intent to acquire a Vancouver-based pharmacy and expects the acquisition to close around the first quarter of 2019; according to the company, "the total consideration payable by Premier is $1,350,000."
"Pharmacy is a critical component in our commitment to providing patients with best in class primary care that is accessible and efficient in its delivery," said Dr. Hamza.
"We are excited for this opportunity to acquire our first pharmacy, and thereafter being able to prepare and deliver prescription and non-prescription pharmaceuticals and other health products to patients. In doing so, the pharmacist will play an integral role in our team-based patient centric model," Dr. Hamza stated. "Premier has engaged with patients, pharmacies and technology providers to not only introduce pharmacy services as a component of our comprehensive telemedicine app, but also to explore and implement efficiencies in fill and fulfillment."
A premium service Premier is contemplating is to charge privately for services that are not included in the Canada Health Act. The company could charge a monthly fee and monitor a patient's blood pressure, blood sugars, etc. and make sure that they are taking their medications.
Another potential market is China. "Right now the government is pushing the family doctor model, so there is a lot of interest in what we are doing," Dr. Hamza explained. Another aspect of great interest is second opinions; "Chinese patients like to get second opinions from North American doctors, so this is another potential revenue stream." In addition, "China represents the largest growth market for telemedicine."
Technical analyst Clive Maund analyzed Premier on December 10, when he wrote, "Premier Health Group announced this month that as a part of its expansion plans it will be entering the Pharmacy market 'via acquisition and/or launching a new Canada based pharmacy in H1-2019.' With Premier's acquisition of HealthVue Medical Clinics in August, this could be the next phase of growth for the company."
"The chart for Premier Health looks strong and it appears to be impervious to the vicissitudes of the broad market. . .Premier is clearly in a bull market and it has risen well in recent months, breaking clear above a now rising 180-day moving average," Maund stated.
"With the 50-day moving average having completely caught up with the price, and the earlier overbought condition having neutralized, Premier is considered to be ready to commence a new upleg, and is rated an immediate buy here," Maund concluded.
Telemedicine is catching on worldwide. Teladoc Health Inc. (TDOC:NYSE), a $5 billion market-cap company that is rapidly growing, is the global leader. A November 1, 2018, research report by William Blair stated, "We continue to view Teladoc as a strong small-cap growth investment, as we believe the telehealth industry is set for material growth over the coming years."
Other players in the field include a division of TELUS (T:TSX; TU:NYSE), TELUS Health, which through its partnership with Babylon, a London-based AI company, is bringing digital health technologies to Canada; and WELL Health Technologies Corp. (WELL:TSX.V), a company that owns 19 medical clinics in Canada.
Premier Health has around 61 million shares outstanding and approximately 65 million shares fully diluted. Nearly all the shares are closely held.
[NLINSERT]Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Clive Maund disclosures
I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None.
