Leverages database of 17,000 specialists to reduce wait times for specialist appointments and medical procedures resulting in better access to care and return to work outcomes
- Medical Confidence is a pioneer health care navigation platform which empowers individuals to connect with health care providers for mental and physical health issues more efficiently and effectively
- Proven results include: 20% reduction in benefit and disability costs, 6-month reduction in disability duration (on average), access to treatment 220 days sooner (on average), improved employee satisfaction (reported by 75% of clients) and 420% return on investment (ROI) or greater in payroll savings due to reduced illness related absences
- Long standing contracts with Canada’s largest group benefit and disability insurers
- Integrated with CloudMD, the combined suite of health care solutions will offer one, multi-functional platform which addresses total health (mental and physical care) and provides a direct and existing pathway into corporations and insurers.
- Recently launched My Health MaP, which provides employers and employees access to important information and resources around COVID-19 screening
VANCOUVER, British Columbia, October 22, 2020 — CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH) (the “Company” or “CloudMD”), a telehealth company seeking to revolutionize the delivery of health care to patients, is pleased to announce that it has signed a binding term sheet (“Term Sheet”) to acquire 100% of Medical Confidence Inc. (“Medical Confidence”), a revolutionary health care navigation platform with proven results in wait time reduction and patient satisfaction.
Medical Confidence provides access to a real time digital database of publicly available specialists and their wait times, allowing patient referrals to the right specialist in the shortest available time. The platform provides medical consultations, wellness plans and referrals to Canadian health care providers in support of patients’ mental and physical health issues. The company’s clinical health care navigators use a collaborative, team-based, approach that leaves individuals motivated and supported throughout their care journey, as well as eliminates frustrations and mental health issues surrounding lack of access to care and long wait times to see appropriate care.
Medical Confidence’s solutions are utilized by a wide range of customers including employers, individuals, disability case managers, life and health insurers and property and casualty insurers. Proven results include a 20% reduction in benefit and disability costs, 6-month reduction in disability duration (on average), access to treatment 220 days sooner (on average), improved employee satisfaction (reported by 75% of clients) and 420% ROI or greater in payroll savings due to reduced illness related absences. Currently, Medical Confidence has long standing contracts with Canada’s largest group benefit and disability insurers.
Medical Confidence recently launched a self-navigation digital tool, My Health MaP, which puts the power of navigating the health care system in the hands of employees, and provides employers and employees important information and resources around COVID-19 screening. Both important resources during back to school, back to work and flu season. My Health MaP is a secure, stress-free, and easy to use COVID-19 screening platform that provides peace of mind as classrooms and workplaces reopen and reduces employee wait time for health care by 180 days on average.
COVID-19 has further presented the world with the urgent need to integrate physical and mental health management and CloudMD now has an integrated solution to address that need. CloudMD’s acquisition of Medical Confidence will create one of the only telemedicine companies able to provide health care navigation to manage comorbidity issues through triage and medical professional team-based approach. Medical Confidence navigators provide a continuity of care program that effectively blends supported intervention with technology and human touch which is proven to reduce wait times and improve patient satisfaction and outcomes.
The integration of Medical Confidence into CloudMD’s platform of enterprise solutions will enable employers and insurers to realize lower absenteeism and improved return to work outcomes with personalized health and wellness care plans and improved access to health care resources. The combined forces of CloudMD, Snapclarity and Medical Confidence changes the landscape where employers can offer one solution that addresses the health needs of their workforce and eliminates the need of multiple vendors. Employers will be able to offer their employees a group benefit plan that will not only provide access to care for mental and physical health issues but improve the financial costs associated with the current $7.5 billion dollars spent on long term disability.
The acquisition will be immediately accretive to CloudMD as Medical Confidence generated approximately $2 million in revenues with earnings before interest, taxes, depreciation and amortization (EBITDA) margins exceeding 26% over the last fiscal year ending March 2020. Medical Confidence drives revenue through retainer-based, multi-year contracts with enterprise clients, and has experienced year over year revenue growth exceeding 35% in last fiscal year. CloudMD intends to integrate Medical Confidence into its suite of products to realize and optimize revenue synergies and cross selling opportunities.
“The COVID-19 pandemic is a serious public health emergency and has further deepened the need to empower individuals to manage their own health and wellbeing by providing them with the right resources. Recent data suggests that over 56% of Canadians believe the pandemic is having a negative impact on their mental health and that wait times for access to specialists will increase significantly over the next two years. The acquisition of Medical Confidence will strengthen our ability to provide whole-person, longitudinal health care to patients and family members, by providing better, more efficient access to care,” said Karen Adams, Chief Health Innovation Officer of CloudMD. “Employers are looking for innovation and improvement in group benefits to provide a solution that helps an employee or family member access the right care for the right issue. There is an industry wide demand for one platform that addresses multiple health issues across mental, physical and specialist care, and CloudMD’s platform will now address that demand resulting in access to better, more informed care, cost savings and significant return on investment monetarily and in the workforce.”
“The ability to combine health care navigation, access to primary care and mental health support will enable us to support the whole health journey of the patient. The disruptive potential of our process, and technology integrated with CloudMD will accelerate adoption of holistic care plans,” notes Angela Johnson, President of Medical Confidence. “Managing return to work with consideration of mental and physical wellbeing is critical. Employers are looking for innovative ways to manage chronic disease and health care issues in a cost-effective manner. One centralized platform combining CloudMD, Snapclarity and Medical Confidence will remove barriers to health care access while providing the market with the navigation of care that will provide continuity of care. We look forward to introducing the employer market and insurers to a solution that will enable return to work and holistic approach to health through one vendor solution.”
Terms of Acquisition
In consideration for the purchase of 100% of the outstanding securities of Medical Confidence, CloudMD has agreed to pay shareholders aggregate consideration of $6 million payable as follows: (i) $2.25 million in cash, subject to a working capital adjustment; (ii) $2.25 million in shares of the company; and (iii) a performance-based earnout of $1.5 million, which is payable 50% in shares of the company and 50% in cash in equal annual issuances over a period of two years. All shares issued pursuant to the acquisition are issued at a deemed price of $2.625 per share and are priced by calculating the 10-day volume-weighted average trading price of the company’s shares for the 10 trading days prior to the execution of the binding term sheet. The shares will be subject to certain contractual restrictions on trading for a period of 20 months from the date of issuance.
The acquisition is subject to customary closing conditions, including the execution of a definitive acquisition agreement and receipt of TSX Venture Exchange approval.
About CloudMD Software & Services
CloudMD is digitizing the delivery of health care by providing patients access to all points of their care from their phone, tablet or desktop computer. The Company offers SAAS based health technology solutions to medical clinics across Canada and has developed proprietary technology that delivers quality health care through the combination of connected primary care clinics, telemedicine, and artificial intelligence (AI). CloudMD currently provides service to a combined ecosystem of 376 clinics, over 3000 licensed practitioners and almost 3 million patient charts across its servers.
About Medical Confidence
Medical Confidence is a pioneer health care navigation platform that reduces health care costs through achieving better health outcomes. Its health outcomes are measurable and demonstrate reductions in costs associated with absenteeism and presenteeism. Medical Confidence clients report that its services have reduced their absence costs by 20%. Leveraging its innovative use of technology and unmatched national network of over 17,000 physician specialists. The health care consumer (employee) has efficient and faster access to the ideal health care providers for their medical condition. For more information on Medical Confidence, visit www.medicalconfidence.com
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD”
Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
VP, Investor Relations
Forward Looking Statements
This news release contains forward-looking statements that are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including with respect to its business plans and its intended use of the proceeds of the Offering. Although CloudMD believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. These forward-looking statements speak only as of the date on which they are made, and CloudMD undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.