Telehealth Co. Launches Monitoring Program for Acute Patients

Telehealth company Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) has launched a new post-discharge program for acute care hospitals on its iUGO platform.

The new program, called iUGO Care, supports patients being discharged from an acute care hospital to their homes, inpatient rehabilitation, assisted living, or skilled nursing facilities.

"Patients receive targeted monitoring for the first 30 days after discharge to specifically prevent readmission to hospital and are then followed long-term using the iUGO Care remote patient monitoring (RPM), transitional care management (TCM), and behavioral health integration (BHI) modules to improve long-term health outcomes and prevent complications that could lead to future hospitalizations," Reliq Chief Executive Officer Lisa Crossley said.

The company also announced it had signed contracts with new hospital clients in California, Florida, and Puerto Rico. The new contracts are expected to add more than 5,000 new patients per month to iUGO by the end of 2024, generating a revenue of about US$65 per patient per month at a 75% gross margin.

The Catalyst: Profitability, Larger Contracts

Reliq had its first profitable quarter during the three months ending March 31 with a gain from operations of CA$731,017 YoY. It also has started scoring larger contracts for iUGO, including one with a U.S. health plan that operates in five states with more than 3,000 doctors and 1 million patients.

The company will not release its final results for fiscal year 2023, which ended June 30, until October. But Crossley recently told analysts and shareholders that according to estimates, revenues more than doubled from fiscal year 2022.

Maxim Group analyst Allen Klee, who has rated the stock a Buy with a CA$1.75 per share target price, wrote in a recent research note that Reliq's larger contracts signaled growing momentum.

Maxim Group analyst Allen Klee, who has rated the stock a Buy with a CA$1.75 per share target price, wrote in a recent research note that Reliq's larger contracts signaled growing momentum.

"We believe a discount to the peer group average is warranted based on the company being at an early stage of execution," wrote Klee. "We project that Reliq will have a primarily recurring, high-margin business model going forward."

iUGO is a "compelling offer for practitioners," Klee wrote. "A typical practice can bring in more than US$1 million in Medicare and Medicaid payments implementing it."

"We project FY23 revenue of CA$17.1M, up 101% (YoY), in line with management's expectations for revenue to double in FY23 and implying F4Q23 revenue of CA$4.8M, up 110% (YoY)," Klee wrote. "For FY24, we project revenue of CA$34.2M, +99% (YoY), roughly in line with management's expectations for revenue doubling in F2024."

Program Could Save Millions in Lost Revenue

Hospitals can be assessed penalties of up to 3% of total Medicare reimbursement for the following year if they don't meet targets reducing readmissions, which could mean millions of dollars in lost revenue, Reliq said.

More than 96% of all hospitals in Florida were assessed financial penalties in 2021 because of the issue. Over 2,300 U.S. hospitals will pay more than US$320 million in such penalties in 2023, according to Kaiser Health News.

The telehealth market was valued at US$128.12 billion in 2022 and is projected to grow to US$504.24 billion by 2030, a compound annual growth rate (CAGR) of 19.7%, according to Fortune Business Insights.

"Our clients' data show that health care organizations using Reliq's iUGO Care platform have been able to drastically reduce their readmissions rates by over 90%, avoiding financial penalties and improving patient health outcomes and quality of life," Crossley said. "This program is a win-win for hospitals, clinicians, patients, and their families."

The iUGO platform helps manage diseases such as chronic obstructive pulmonary disease (COPD), congestive heart failure, diabetes, hypertension, and others. Patients get audible reminders to step on a scale, take their blood pressure, or prick their fingers for glucose monitoring. The information is automatically uploaded to the cloud. 

Drawing on data from fall detection devices, medication tracking, and vital signs, the platform flags patients at home or in facilities who need additional monitoring.

'Virtual Consultations' Boom

The telehealth market was valued at US$128.12 billion in 2022 and is projected to grow to US$504.24 billion by 2030, a compound annual growth rate (CAGR) of 19.7%, according to Fortune Business Insights.

"The market is getting a significant boom with the rising start-up funding and launch of products, especially for virtual consultations," researchers wrote.

The COVID-19 pandemic brought the world to a standstill and put many burdens on healthcare workers. 

"This has opened new market opportunities for digital health platforms," according to the report. "The demand for virtual consultations increased by many folds amid the crisis,

Crossley said she expects those conditions are contributing to the company's great growth.

"We're certainly in a period of rapid growth," Crossley said. "And I would say that growth is going to accelerate significantly over the second half of the (calendar) year and into 2024."

The company is gathering "continuing momentum," Maxim analyst Klee wrote. "We believe the company has hit an inflection point of accelerating revenue and EBITDA profitability. Tailwinds include a significant number of larger contracts that have been won."

Klee said he generally agreed with Crossley's revenue predictions. "We also believe our revenue could prove conservative if the company is successful in onboarding some of the larger contracts that have been announced," he wrote.

Ownership and Share Structure

About 8% of Reliq's shares are owned by insiders, including Crossley, with 1.6% or 3.22 million shares. About 0.3% of the company is owned by institutional investors, including FNB Wealth Management, with 0.01% or 0.03 million shares, according to Reuters.

Other top investors include Eugene Beukman, who owns 0.11% or 0.23 million shares, and Brian Storseth, who owns 0.07% or 0.14 million shares, Reuters said.

Crossley said 91.7% of the company is retail.

The company has 203 million shares outstanding, with about 200 million free-floating. It has a market cap of CA$101.45 million and trades in a 52-week range of CA$0.76 and CA$0.46.

Important Disclosures:

1. Reliq Health Technologies Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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