Before I go in to the details of what PASHealth does, let me briefly explain what is presently going on in this industry.
Currently there is a big push for doctors to overhaul their offices to include EMR, which simply means Electronic Medical Records.
In simple terms, what they want every doctor’s office and hospital in the US to do, is to invest in expensive computer systems and software to make their offices completely electronic. By doing so, the doctors and their staff have to be trained on an entirely new computer system, which sometimes can take a few months. Their current options for EMR consist of using tablets, PDA’s or computer's in every room.
The government and local governments are putting so much pressure on doctors to move towards EMR, that there are incentives from government agencies to do so. In fact, in 2005 the nonprofit research organization, The Rand Corp., produced an extensive study on EMR and found that if 90% of hospitals and doctor’s offices adopted it, it would save $81 billion dollars annually.
This is a huge incentive for the entire industry and this is why it has created a billion dollar industry that is expected to grow by 400%. But this pressure to convert offices to EMR, has been hit with major resistance by the majority of physicians.
According to researchers with the Institute for Health Policy at Massachusetts General Hospital, doctors continue to resist converting to EMR in their practice due to an unwillingness to change.
Currently only 19% of physicians have converted their offices to EMR, leaving around 600,000 offices without EMR.
Doctors resist new technologies because it is a major change from the way they were taught to treat their patients. They resist new technology because it is different, and learning how to use them is time-consuming and costly.
The average cost to purchase an EMR system is between $20,000 and $40,000 per provider, plus as much as $10,000 per year in maintenance charges.
So physicians today face a “conundrum”: To EMR or not to EMR.
After many surveys that have been done, the overwhelming conclusion was that doctors just want to keep doing what they have been doing for decades by using their pen and paper. They don’t want to have to buy a bunch of expensive computers systems and learn complicated software.
So the industry realizes the problem and would like to address it, but every EMR vendor out there can only offer tablets, PDA’s and expensive computer systems. That is the only way they know how to offer EMR and this is the main reason why 81% of the physicians have yet to adopt EMR. This industry wide problem has created a possible $100 million dollar opportunity for PASHealth and their technology. They have such an advantage over the competition with their unique technology, that they could possibly grab a large piece of a billion dollar market and this is the main reason why we chose to introduce PASHealth to our investors this quarter.
PASHealth has a product that doesn’t change the pen and paper method at all. In fact, they encourage all of the doctors to keep using the pen and paper method. The only thing that they ask, is that they use their product called DPAS – which is a high tech pen and paper.
To understand how this pen and paper technology works, I urge you to watch the PASHealth Stockumentary by CLICKING HERE.
MARKET SIZE:
The market for PASHealth’s product DPAS is enormous and the revenue potential is profound.
If we just look at the Physician's market, that totals 750,000. So far, 19% of the Physicians have adopted EMR. This leaves over 600,000 that have not adopted EMR.
So if we just look at this market, PASHealth’s product DPAS could be used by over 600,000 Physicians. Of course this is not a reality, so the company has made it known that they are going for 1% market penetration.
If they are able to achieve this, the company would generate around $194,000,000 in gross revenue.
REVENUE BREAKDOWN:
Anytime PASHealth signs up a new account, the term is for 36 months and the average cost per month for that license is around $300.
So if they do in fact penetrate 1% of the market, which again is 6,000 doctors, with an average of 3 pens per doctor, then it breaks down like this:
--------------------------------------------
- 6,000 offices times 3 pens, equals 18,000 pens.
- 18,000 pens times the $300 average per month, equals $5.4M per month in gross revenue.
- $5.4M times 36 months, equals $194M in gross revenue.
- PASHealth’s margins are around 37%, which gives the company around $72M in net revenue.
--------------------------------------------
It is also very important to understand that the 750K doctors that we used in this example, are only healthcare providers in their offices.
The market for the DPAS product, really consists of the following:
--------------------------------------------
- 600,000 physicians
- 1.8M Home health care nurses and aides
- 161,000 Offices of dentists
- 158,000 Chiropracters, podiatrists, non-physician health practioners
- 28,000 Outpatient care centers
- 31,000 Medical and diagnostic laboratories
- 7,000 Hospitals
- 66,000 Nursing and residential care facilities
(Stats provided by ibisworld.com)
--------------------------------------------
So the total market size is really not just 600K possible DPAS users, but it is actually somewhere around 2.2M possible DPAS users, when you factor in all of the areas of practice.
So now you should be getting a pretty good idea of how big the market for DPAS really is and how likely it is that this company could achieve over $100M in revenue in a very short time frame and why we chose to feature this company out of 150 other companies.
At this very moment, PASHealth all ready has 20 hospital clients that are currently using another one of their products. With the current roll out of the DPAS product, these hospitals will be first on their list to market the DPAS product to. This could possibly equate to thousands of pens.
On top of that, Americare, one of the largest home healthcare agencies in the country, with over 7,000 nurses, decided to roll out a pilot program using PASHealth’s product DPAS.
To see an interview with the CEO of Americare, CLICK HERE to watch the PASHealth Stockumentary.
TECHNOLOGY:
In the PASHealth Stockumentary, Mr. Kleinman mentions that they are going to start a pilot program with DPAS. If this test goes well and Americare decides to move forward with DPAS, this alone could be monumental for the company. Remember, Americare currently has 7,000 nurses and this is just one company in the home healthcare business. At the present, PASHealth is also speaking with another home healthcare agency that has over 30,000 nurses.
So the home healthcare business is another huge target for the company.
So now you are most likely wondering about the DPAS technology and how it works. DPAS is essentially a high tech pen and paper. The pen is a small computer and the paper is a special dot matrix paper. So what this does, is allow the doctor to keep using a pen and paper and at the same time, streamline the current workflow he or she is accustomed to.
The technology is complicated in how it was created, but is very easy to understand and use. The technology converts a person’s handwriting in to an electronic form. It does this by a process called optical character recognition or OCR. So this allows a doctors office to convert to EMR without any major hassle and the cost is minimal compared to the alternatives.
But the power of this technology isn’t just in converting text to a readable font. The power is in PASHealth’s intuitive web portal.
Here is something you most likely do not know about the healthcare industry, but the doctors watching will. $20 billion dollars is lost every year due to erroneous patient information.
When you go to a doctor’s office, the first thing they ask you to do, is to fill out a patient registration form. When you are done filling out the form, you bring back the clipboard and hand them your insurance card and information.
What the assistant is supposed to do at that time, is to verify your eligibility with the insurance provider to know if you have valid insurance or not. Now there are two ways he or she can do this. They can either call the provider and verify insurance, where the average hold time is around 10-15 minutes or they can go on the insurers website and login to the site and try and get the information there.
In the real world, it never happens that way. The number one reason this doesn’t happen, is because of a lack of time. The assistants are so busy that they do not have the time to verify eligibility for every person in the waiting room. They just figure that if you have a valid insurance card, that you must have insurance. So a lot of the times, they are treating patients that do not have valid insurance and this is why $20 billion is lost per year in this industry.
The real power of PASHealth’s product DPAS, is that when you come into an office that is utilizing the DPAS technology, this will never happen.
What happens in a DPAS equipped office, is that when a patient comes in to the doctor’s office and is told to fill out their patient information, he or she doesn’t know it, but they are using a very special pen and paper.
When he or she is done filling it out the information, they hand it back to the assistant at the front desk and head back to their seat. This is where the real value of the product starts.
The assistant takes the pen and places it in the cradle. From that point on, here is what happens:
--------------------------------------------
- An exact copy of the original form the patient just filled out is created on the fly - just as if it were scanned.
- An OCR’ed version is also created for record keeping, just as if someone typed it out.
- From the OCR’ed version, it extracts the 4 data elements needed to run eligibility, which are first name, last name, membership number and date of birth.
- After that, it goes out to the insurer’s web site to verify that the patient does in fact have active insurance.
- Once that is done, it populates the assistants computer screen and let’s he or she know that the insurance is valid and how much their deductible is and how much their co-pay is and that they can be treated.
--------------------------------------------
What is amazing about this, is that all of this happens within 10-15 seconds of the pen being cradled.
CONCLUSION:
All of us here at Stockwire have been very fortunate to be able to be introduced to hundreds of companies throughout the existence of the company and we have seen some extremely good companies and we have also seen some very bad companies, but out of all the companies we have looked at, PASHealth is by far the most attractive.
When you really sit down and analyze the space that they are in and then analyze the company’s revenue model, you really begin to understand the type of growth this company could have.
Just think about this, 6,000 pens earns the company around $194M in gross revenue and just under $100M in net profits.
What do you feel the market will pay for a company doing just under $100M in net profits?
What type of multiple do you feel it would trade at with a company as explosive as PASHealth?
$194M in gross revenue - that is incredible for an emerging growth company. Then when you take a look at the real market for their product - when you look at all the organizations that could use it, it is around 2.2M. So 6,000 is just a sliver of that total amount.
A lot of the times, you hear comments about the possibility of a company grabbing X% of a multi-billion dollar market, but in reality, their product is just another product in the industry.
PASHealth, according to the company, really has the only pen and paper product for EMR and this industry is currently a billion dollar industry that is expected to grow by 400%.
So this is very real and this is why we chose to feature this company and introduce it to our elite members.
So take a serious look at becoming a shareholder of PASHealth - a company that is poised to become a massive player in a multi-billion dollar industry!
awm15
StockwireAdmin
PASHealth (NASDAQ.OB: PASO):
Currently only 19% of physicians have converted their offices to EMR, leaving around 600,000 offices without EMR.
PASHealth has a product that doesn’t change the pen and paper method at all. In fact, they encourage all of the doctors to keep using the pen and paper method. The only thing that they ask, is that they use their product called DPAS – which is a high tech pen and paper.
At this very moment, PASHealth all ready has 20 hospital clients that are currently using another one of their products. With the current roll out of the DPAS product, these hospitals will be first on their list to market the DPAS product to. This could possibly equate to thousands of pens. 
TECHNOLOGY:
So now you are most likely wondering about the DPAS technology and how it works. DPAS is essentially a high tech pen and paper. The pen is a small computer and the paper is a special dot matrix paper. So what this does, is allow the doctor to keep using a pen and paper and at the same time, streamline the current workflow he or she is accustomed to.
What happens in a DPAS equipped office, is that when a patient comes in to the doctor’s office and is told to fill out their patient information, he or she doesn’t know it, but they are using a very special pen and paper.
What do you feel the market will pay for a company doing just under $100M in net profits?