By GREGORY ZELLER //
Vasomedical’s acquisition this month of a Florida-based managed network provider named NetWolves may serve as a template for the future of U.S. health care.
A big view, for sure, but it comes from Jon Linkous, CEO of the American Telemedicine Association, a Washington-based nonprofit promoting the use of remote medical technologies.
Citing the evolution of interactive, on-demand technology in other industries, Linkous believes “health care is next,” and says the acquisition by Westbury-based Vasomedical adds momentum to the shift.
“This parallels what’s happened in so many other industries,” Linkous said. “You have a lot of hardware companies suddenly realizing it’s all about software and communications, so they’re moving to become not just hardware providers but solutions providers.”
Telemedicine employs telecommunication and information technologies to provide remote clinical health care, eliminating distance barriers – letting physicians service patients in remote rural communities, for instance, or allowing a New York expert to consult with a patient in California – and improving real-time emergency responses, among other potential benefits.
According to the ATA, 15 million patients will receive some form of remote medical service this year, including 450,000 who receive a primary-care consultation over the Internet.
And the association isn’t the only one beating telemedicine’s drum: National retail giant Walgreens announced this week it will flip the switch on a mobile app linking doctors and patients in 25 states by the end of 2015. Also, insurance providers UnitedHealth Group and Blue Cross-Blue Shield have announced efforts to make non-emergency telemedicine services available to some 40 million customers by 2016.
Vasomedical’s master plan: capitalize on all that connectivity. Until now, the diversified med-tech manufacturer has exclusively built and sold medical devices, particularly diagnostic imaging products. According to CEO Jun Ma, the $18 million NetWolves acquisition – which closed May 29 and was announced June 1 – adds networking design, management, monitoring and support to the fold, giving the Westbury firm a “major competitive advantage” as it plunges into the telemedicine market.
“Moving forward, the health care industry will require very reliable networks,” Ma said. “If you’re performing surgery or you’re getting a patient’s information live from an ambulance, you can’t afford downtime. NetWolves has been very successful in providing comprehensive solutions for corporate customers with connectivity needs.”
Like Linkous, Ma believes healthcare will increasingly rely on interactivity, a vision also shared by corporate titan GE, which in 2010 anointed Vasomedical subsidiary Vaso Healthcare an exclusive representative for GE diagnostic imaging products, including MRI and mammography machines.
That gave Vasomedical rights to small and midsized customers across the country, Ma noted, including independent hospitals, imaging centers and a host of private practices. GE also granted Vasomedical exclusive rights to the entire Long Island region.
The deal helped Vasomedical become a regular on the Technology Fast 500, the annual ranking of the fastest-growing U.S. tech firms published by international accounting giant Deloitte. In 2014, its third consecutive year on the list, Vasomedical vaulted to No. 166, up from No. 207 in 2013.
GE was so pleased with the diagnostic-imaging deal that it added radiology software to the deal, even before Vasomedical “really had the infrastructure to do that,” Ma noted.
“GE took a chance, and it turned out they were right,” he noted. “The same customers who buy the imaging equipment are also the customers buying the software to manage the digital imaging.”
That’s made Vasomedical not only a major player in the digital-imaging hardware field, but in the burgeoning telemedicine market it supports. Hardware manufactured and sold by the company generates hundreds of millions of digital scans annually – over 120 million X-rays in the United States alone – and with that much digital imaging out there, “you need very good software to manage it and share it,” Ma noted.
So Vasomedical had to up its connectivity game. The firm found an answer in NetWolves, which was not only profitable but with the IT chops to match Vasomedical’s considerable market presence.
“More than that, they excel at monitoring their networks and providing real-time diagnoses of network services,” Ma said. “They’re proactive. They don’t wait for a customer to call and tell them there’s a problem. Everything is watched constantly, and if there’s a problem, they start working instantly to determine if it’s the software, or the connectivity, or whatever. They immediately generate a ticket and work to reduce the downtime.”
NetWolves was happy to plug into Vasomedical’s system, according to Peter Castle, who retains his title as NetWolves president while adding Vasomedical director to his résumé. Castle said the merger comes at “an opportune time for us to potentially be a major participant in the rapidly growing healthcare connectivity market” and cited “a number of financial institutions that have already expressed interest in the rapid expansion of business.”
Ma, meanwhile, told Innovate LI that Vasomedical is “already seeing a very good market response,” in the two weeks since the NetWolves deal was announced.
“We actually have sales already, based on combining the new networking capabilities into our original services,” he said.
The quick market response certainly doesn’t surprise the ATA’s Linkous, who said telemedicine is “on a hockey stick kind of curve” similar to the rise of ATMs in the banking industry.
“Today, you’d never consider a bank where the only option was to go to a teller to cash a check,” he said. “Old movie theaters have changed the way you get tickets, the retail and financial industries have reinvented themselves, and now it’s health care.
“Providers are already putting in online portals where you can schedule appointments,” Linkous added. “The next step is providing a way for patients to communicate with providers by email and video. The number of patients getting services online is going to double in the next two years.”