Specialist
Former SVP at Healogics Inc
Agenda
- Wound care services market – coronavirus impact and 2021 outlook, including sustainability of outsourcing trends
- Healogics business breakdown and potential West Coast expansion opportunities
- Key market trends amid the changing clinical setting from hospital to in-clinic to home care
Questions
1.
How has coronavirus impacted Healogics over the past year and are any of these impacts ongoing? It seems that the wound care segment has been slightly more resilient than other areas of healthcare. Manufacturers such as ConvaTec and Coloplast actually experienced a stocking effect throughout Q1 and Q2 and perhaps slightly in Q3 2020.
2.
You mentioned Healogics has been operating at around 70-80% capacity throughout the pandemic. Do you think this is because people are slightly worried about going to hospitals and having this treatment done? Do you think state shutdowns in the US are a headwind to operations?
3.
Could you suggest an upside and a downside scenario for Healogics over the next 12 months? We’ve heard about its ongoing restructuring.
4.
Do you think moving to insourcing is high up hospitals’ priority lists?
5.
What do you think will be the key drivers of Healogics’ gross margin and operating margins over the next 12-24 months?
6.
How much leverage does Healogics have when hospitals attempt to negotiate lower rates at the end of renewal cycles?
7.
What do you think are management’s near-term priorities and its strategy over the next 6-12 months?
8.
Do you think management’s near-term priorities conflict with Healogics’ long-term strategy, given the company’s financial situation?
9.
How much leverage does Healogics have to offset its margin reliance on HBO [hyperbaric oxygen] treatment volumes? Demand has been declining for a number of years.
10.
How clear do you think management’s strategy has been for offsetting HBO treatment volume declines? What has the business actually done? This side of the market has been in decline for a number of years.
11.
Why do you think hospitals typically outsource advanced wound care?
12.
Patient or customer acquisition is a big benefit of outsourcing. If it signs a contract with Healogics for 2-3 years, a hospital can gain patients and build its business and then cancel the contract. How easy is it for a hospital to then go out into the community and continue acquiring those customers itself? How significant an advantage is Healogics’ ability to acquire customers for hospitals?
13.
Why might a hospital not renew a contract with Healogics at the end of a three-year cycle?
14.
To what extent has revenue cycle management continued to be a key reason for hospitals outsourcing, given the high level of software development in this area?
15.
How effective do you think Healogics is at customer retention in the contract renewal phase? Could you suggest any contract turnover rates?
16.
How would you quantify the annual impact of cost pressure at the renewal stage?
17.
Do you expect that Healogics will shift towards more rural or suburban areas as larger, more financially independent urban hospitals begin to insource?
18.
What is your outlook for M&A in this market? Could Healogics potentially acquire a competitor such as Restorix? Could companies such as DaVita and Fresenius perhaps expand through M&A into adjacent markets such as dialysis or ambulatory surgical centres?
19.
How have the competitive dynamics between Healogics and Restorix evolved over the past few years? What differentiates Healogics from companies such as Restorix?
