“Wound care providers are going to get richer, more helpful tools that can enable them to deliver better care and do so in the most cost-effective way... that's our aspiration.” - Josh Pickus, CEO of Net Health
On May 14th 2020, Net Health acquired the pioneering developer of automated mobile wound and skin imaging and predictive analytics solutions, Tissue Analytics, expanding Net Health’s leadership position within the wound care market. Tissue Analytics solutions are used by hospitals, individual clinicians and product manufacturers for delivery of wound care services as well as management of clinical trials and will be integrated with Net Health’s industry-leading WoundExpert® EHR solution to add key capabilities for use within hospital outpatient settings.
The Wound Care Learning Network recently sat down with Net Health’s CEO, Josh Pickus and Kevin Keenahan, SVP of Business Development and co-founder of Tissue Analytics, to discuss the acquisition. Listen in as Josh and Kevin talk about the acquisition and its benefits, acquiring Tissue Analytics amidst the COVID-19 pandemic, and more!
This is Kevin Keenahan, co-founder of Tissue Analytics, joining Net Health as their SVP of Business Development.
And this is John Pickus. I'm the CEO of Net Health. I've been in that role since January of this year. Prior to that time, I was the CEO of a company called Optima Healthcare Solutions that was focused primarily in post acute care. We were acquired by Net Health last July, and I've now joined Net Health and ultimately become its CEO.
On May 14th, it was announced the Net Health acquired Tissue Analytics before delving into the acquisition and what this means for the future of wound care. Can you each give a background on the companies and what services they provide to the wound care community?
So what Net Health provides is principally a product called WoundExpert and WoundExpert is the leading EMR, Electronic Medical Record system for wound clinics. We have a very substantial share of the marketplace in that area and we're used by clinicians who work in would care to document and manage the way in which they're delivering that care. Kevin, you want to add on TA?
Yep, absolutely. Tissue Analytics or TA is essentially an imaging and documentation module that sits on top of the bigger electronic medical record systems. We function actually across a few parts of the wound care market. The primary one is working in an inpatient setting or an acute care environment where we sit on top of the big acute care systems like Epic, Cerner and Allscripts, but because our product fundamentally delivers clinicians extremely high quality data by using computer vision and automated measurements, we have been able to apply that technology in a few other areas as well, most notably clinical trials. Tissue Analytics has used as what's called an electronic case report form for major dressing companies to either validate new products or generate data and evidence and insights for products that are already on the market.
Speaking of that, the acquisition will expand Net Health's capabilities from hospital outpatient and post acute to inpatient settings. Can you guys elaborate on the benefits and capabilities of this merger of technologies?
Sure. So if you think about what Kevin said, it's really all there. There's two important threads. The first one is around adding to the capabilities of the products themselves. And in that area, there were really three things that Kevin and his team added to the core EMR. One is very high quality imaging, pictures and data related to the wounds themselves. The second one is very rich and sophisticated integrations with the leading hospital, EMR, Epic, Cerner, Allscripts. And the third is a very rich capability, data set, models, algorithms that we're going to use in combination with what we have to deliver true predictive analytics for wound care, to allow clinicians to have much stronger decision support tools than they've ever had. So that's sort of the product capability side and that applies almost regardless of setting. The other thing that Kevin mentioned that's equally true is we were able to expand the settings in which we're a relevant solution.
So, as I mentioned at the outset Net Health is primarily focused on outpatient or in clinics. And what TA brings is other settings, particularly the acute care area, where the EMR is very likely to be one of the hospital systems, Epic, Cerner Allscripts, but you still need some wound care capability. And that's what Kevin has built. We also now conserve this area of people doing clinical trials for wound care. So what was really powerful for us about the acquisition was, not only were we expanding overall product capabilities, but we were also expanding the settings in which we could offer a high quality solution.
And I want to ask too, as you had mentioned, you became the CEO of Net Health in January, did you expect to see such an acquisition within the first six months of your tenure?
Yes. Net Health has historically been pretty inquisitive and it has a board that is obviously very interested in organic growth, but has always believed that if we can add strong capabilities through acquisition, we should. I think the more surprising thing was that their enthusiasm continued throughout COVID-19 because we did this deal right in the teeth of it. And we both proceeded with it and proceeded on effectively the terms that we had negotiated pre-COVID. So I give the board a lot of credit for seeing the true strategic value of this combination and keeping the faith, not withstanding external conditions.
Touching on the pandemic, it's impacted the global economy and it's predicted to do so for some time, since mid-March more than 36 million Americans have lost their jobs and the GDP now forecasting model as reported by Al-Jazeera says, the US economy shrinking 42.8% from April through June. Why was the acquisition of Tissue Analytics, especially its completion of May pursued at a time where economic uncertainty for all American businesses is the only certainty? Did the goal of a fully connected wound care continuum outweigh the economic risks for you guys?
Yeah. What I would say is this pandemic will end. It won't end tomorrow and it won't end completely for a number of months, but it will end. And the strategic needs that drove this will be in place and we have a lot of confidence about that. And therefore we were looking more over the medium to long term for this believing that the same needs that existed beforehand for wound care with that combination of capabilities and in that combination of settings, surprise, both Net Health and Tissue Analytics have continued to perform pretty well as businesses during this period. So it's true that some part of our willingness to go forward is that people still demonstrated a need for our solutions, even in the middle of this. So that bolstered our confidence to do the right thing from a strategic standpoint. Kevin, do you want to add anything to that?
Yeah, I'll just say first off, I do think it speaks to the foresight that the Net Health leadership team and the supportive board, and they did all this through obviously, the peak of the crisis really. But I think both companies have responded so well in part because both companies years ago, or certainly months ago had that same level of foresight to adopt telemedicine solution. So both companies have a pretty robust offering in that space. And having that in place before COVID hit and then actually very early in the crisis, Tissue Analytics, specifically is doing something like offering our patient application for free, I think there's a good balance between those two. We were able to offer a helpful solution to clinicians in the crisis, but still continue roughly the pace that we were growing at previously.
Have you guys seen an increase in the use of your product due to the pandemic?
Certainly outpatient and clinic volumes have taken a hit. There's been a pretty significant reduction in both visits from new patients and existing patients through the crisis. We are seeing that rebound. So it's actually very helpful to be part of a company like Net Health now, that has 90% market share. So that's basically the definitive, the data set for what is happening in the outpatient clinic space. On the inpatient side, we are seeing a little bit perhaps less elastic change to the number of visits or the number of wound encounters I should say. So those two are a little bit different in that respect, but across the board, we're seeing either the same, roughly the same level of utilization of Tissue Analytics inpatient, or we're seeing a higher rate of utilization for the patient application so that you can get patients through virtual visits rather than in person.
Commenting more from the outpatient wound care side, what I would say is we in the early parts of the COVID crisis saw quite a substantial diminution in volumes at wound care clinics. It got down as deep as 40% off, but what's very encouraging is that has recovered considerably. We're now down 20% and steadily moving in the right direction with more and more hospitals and IDNs opening up their clinics because there really is something that needs to be attended to, you really can't go on for an indefinite period of time without treating serious wounds. And we are seeing a pretty robust recovery right now.
In many ways that's good to hear. I know there was concern of what I would classify secondary complications or deaths as a result of COVID, the number came out not too long ago, but I think about 75,000 people had died or succumbed to illness, whether it be as a result of suicide or not receiving proper care due to conditions where the lack of healthcare accessibility. So the fact that your product can also provide mobile technology and doctors being able to keep up with patients virtually in that sense is really remarkable regardless of the pandemic.
Yeah. If you think about the patient app that Kevin and his team built, it's really cool. I mean, you can use your iPhone and deliver really high quality information to a clinician that can move very seamlessly in the EMR so that the hospital has all that data. So it's a very, very powerful, very modern solution.
Switching gears a little bit to you Kevin, all employees of Tissue Analytics have joined Net Health. What are your new responsibilities and goals with the company in your new role?
My first goal is to make sure that Tissue Analytics can fully integrate the product into an expert platform and deploy into effectively 100% of their WoundExpert user base. Tissue Analytics and WoundExpert are extremely strong together. But the longterm opportunity that we're all talking about here is creating this fully interconnected wound care continuum that's not just between the two company's sweet spots, inpatient with TA and outpatient with Net Health, but do that at large scale, but also get into every other part of healthcare. So the true post acute space with skilled nursing facilities, home health, the ultimate goal is to follow a patient from inception of the wound, which for instance, might be the emergency department in a hospital through all their outpatient visits and all the way towards home health or at-home visits. So that I would say is my primary goal and I'd like to spend most of my time on. Just make sure that Tissue Analytics is getting large scale adoption, and we're continuing to grow the company and scale our integrations with Epics, Cerner, Allscripts to collect as much data as possible.
That's fantastic. From the press release, there was a quote from you saying, "This acquisition will be a quantum leap towards consistent automated wound outcomes available across every care setting in the country." From both of your perspectives, what is the benefit of this relationship to wound care providers across all settings?
I would say it's pretty simple. They're going to get richer and more helpful tools that can enable them to deliver better care and do so in the most cost effective way. That's our aspiration, and we've got a ton of work to do, but that's the goal, really great tools across the entire continuum of wound care for the clinicians.
And I think the reason that's so important is because there's relatively few ways that health IT company in my opinion can directly impact outcomes. And one of the ways you can directly impact outcomes is by breaking barriers between data silos. So one of the reasons Tissue Analytics first started the company when we were working at Johns Hopkins, at the time they were using five different EMR systems and they kind of talked to each other, "You have these HL7 integrations," but they don't really integrate with each other in a way where clinicians can access data as part of their core workflow. So when we first started the company, we were certainly focused on creating a new standard for how we measure outcomes i.e. using computer vision to automate the assessment so that you remove subjectivity.
But the Holy Grail, the longterm goal was ultimately to work with every single EMR and break down all those barriers so that a clinician at a moment's notice can go and look at the entire patient's wound healing that I think is extremely important for providers. But I think it's also extremely important for all the other industry companies out there, all the companies that are making dressings, because dressings can be used in so many different situations in each has very different indications. So talking about building best-in-class clinical decision support, now you really do need to combine all these data sets, not only the inpatient and outpatient, literally everywhere else.
Yeah. And I'll just offer one addition to that which is, a lot of what we've been talking about is with respect to wound care. And when Kevin defined what he's going to do at Net Health, it was in the context of wound care, but the bigger, bigger picture is data in healthcare and using that data to enable better, more cost effective care, regardless of setting, and to be able to do that, not just in a look backwards way, but in a look forwards way, actually be able to equip clinicians to make better decisions because we can take in data and deliver them useful information. And our strong belief is that you have to start with good data and the people who have the best data are the EMR providers, because we're collecting that across an industry. So we have an incredible opportunity to take a very rich data set.
When you take Net Health and TA together, you can very mildly and calmly and not boasting only say, "There's no better wound care data set in the universe." So what we have to do is take that data set and use it to actually create useful predictions for clinicians. And if we can pull that off in wound care, then that can be the beachhead to pull it off in therapy, in hospice, in many of the other areas in which we operate. So that's the big dream, become more of a data company with the EMR operating in many ways as a data collection tool to enable us to help clinicians turn that data into value as they care for people.
Well, it's fantastic. It was really great to hear your guys' insight. I really appreciate you taking the time to do this.
All right. Well, thank you for all of your attention to this. We very much appreciate it.