Well Health Technologies – Trying to disrupt Primary Healthcare

WELL Health Technologies Primary Healthcare Digitization Theequitypodcast.com

Company discussed in this blog post: Well Health Technologies, listed in Toronto Stock Exchange Venture with the ticker symbol – WELL.


We’ve all been to the doctor’s office at some point in our life and have spent days for our appointment, checkup and a follow up. Canada is a developed country but the process of reaching out to the doctor’s office and follow up is relatively lengthy and old school. Additionally, all of us have smartphones with us all the time but the use of smartphones for healthcare services is still next to negligible. Majority of the primary healthcare offices are still following the old pen and paper process for documentation and records. This needs to change and change faster.

Have you ever wondered that despite all the technological advancements, why majority of us are still not doing video calling and messaging with our doctor? Why we are still unable to book online appointments with the doctor? If you are wondering and are bothered by this long and old process, hold on to your breath. Well Health Technologies is “trying” to tackle this shortcoming in Canadian healthcare system.

They are trying to digitize and modernize primary healthcare system in Canada. A system, that is still using old school pen and paper, for majority of the office work in healthcare industry. You must have seen those big piles of files in doctor’s office. WELL is trying to bring electronics for keeping the medical records and to reduce those big piles.

Clinical wait times.

This topic is, without a doubt, one of the most talked about topic in many of the Canadian households. You should consider yourself lucky if you called your family doctor and got the appointment for the same day.

Most Canadians, that I have spoken to, get upset with the time they spend in the waiting area in Doctor’s office.

There are some visible deficiencies in our healthcare system. First and foremost, it had not yet completely adopted the new technologies and has not marched with time. Secondly, many of the primary healthcare offices are still using the old pen and paper process for documentation. Undoubtedly, this old process also adds to the delay to some extent.

CBC did a story on this, based on CIHI data. 1

Healthcare system performance rankings.

Many countries have marched with the time and have already made great progress in digitizing their primary healthcare systems. Patients and Doctors are already using virtual platforms for communications. It should be noted that countries like UK, Australia and Netherlands are doing very well when it comes to Healthcare systems rankings among the high income countries. Clearly, Canada is lagging behind and need to do a lot more to match up to those countries. Commonwealth Fund did a survey among top income nations and Canada ranked third last in the list 2 .

“Canada’s healthcare system ranks third last among high income nations and is one of the most expensive, having only a poor to moderate performance” 3 .

RANKCOUNTRY
1 UNITED KINGDOM
2 AUSTRALIA
3 NETHERLANDS
4 NEW ZEALAND
4 NORWAY
6 SWEDEN
6 SWITZERLAND
8 GERMANY
9 CANADA
10 FRANCE
11 USA

Won’t we all love quicker access to primary healthcare services?

We are in digital age and all of us use smartphones and computers for many of our daily chores. What if we as a patient are able to actually do our doctor’s appointments online or through smartphone? Additionally, won’t we love the idea to have a video calling feature with our doctor? What if we are actually able to message/chat with our doctor from our smartphones, computers? Unquestionably, we will all love this. This process needs to be simpler, easier and shorter and this is where Well Health Technologies is focussing on.

  • Well Health Technologies is a public company listed in Toronto Stock Exchange: Venture with the ticker symbol WELL.
  • WELL Health Technologies aims to positively impact health outcomes by leveraging technology to empower and support patients and doctors 4.
  • They are the owner and operator of the largest single chain network of primary care clinics in British Columbia.

Why Well Health Technologies?

WELL HEALTH TECHNOLOGIES
WELL HEALTH TECHNOLOGIES
Proven Management

The company’s management team has done it before. WELL health technologies CEO, Hamed Shahbazi was named TSX Venture Tech’s “Executive of the Year” three years in a row. In addition, he previously led TIO Networks, which was sold to PayPal for more than $300 Million.

Rapidly Growing Sector

The world is moving towards Healthcare digitization. Current Canadian healthcare technology system came third last among high income nations. Big corporations like Telus health, Loblaw’s have already sensed this and invested Millions in to this sector. Whole sector is rapidly growing and the trend is expected to continue in the coming years.

Backed by Sir Li Ka Shing

Mr. Li is in the top 50 richest people in the world with a net worth exceeding US $ 29.4 billion 5. A great Investor and a Philanthropist. Clearly, he has a great track record in identifying the opportunities before others. Some of his notable investments include Facebook, Spotify and CIBC.

Vitals of Well Health Technologies.

Let’s go to the main part of WELL’s story, the execution until now, the numbers. This information is taken from COMPANY’S FACTSHEET. As of October 31, 2019, the company had the following numbers…….

Digital Portfolio
Clinics852
GP’s Supported4,000+
Registered Patients15 M+
Clinic Portfolio
100% Owned Clinics 19
Doctors at WELL Clinics180
Patient Visits in 2018 600,000
Clinic and HQ Staff 174

Financial Health of WELL Health Technologies

As per Latest financials on SEDAR, the company is not yet profitable. Three key numbers worth mentioning, from the last Q results, are.

REVENUE

Revenue increased 328% to $8,189,678 when compared same three months ended October 31, 2018. Gross margins are at 35.2%. Majority of the revenue numbers came from Insured clinical services. Out of that, 88% is coming from Clinical Services and only 12$ is coming from Digital Services.

NET LOSS

Net loss for the 3 months ended September 30, 2019 and October 31, 2018 was $4,833,216 and $907,462 respectively. Adjusted EBITDA loss was $512,076 compared to Adjusted EBITDA loss of $540,705 in the 3-month period ended October 31, 2018.

CASH

As at September 30, 2019 and December 31, 2018, the Company had $19,406,512 and $2,334,208, respectively, of cash and cash equivalents. There is nothing boring about this much cash and cash equivalents.

Stock performance

The blog post will be incomplete without the stock chart and stock performance. The stock has done fairly well this year. It was trading closer to ~ 40 cents range in January 2019. The stock touched 52 weeks high of $1.87 (CAD) in July 2019. The stock dad some selling after that but still trading strong.

Looking at the financial statements, the company is not yet profitable. Majority of the revenue numbers are coming from Clinical services. Higher margins are expected from digital services (EMR services). With the management team, the backing WELL has got and the huge market opportunity, we believe Well Health Technologies should do WELL!

According to GMP Securities analyst Justin Keywood, aggressive M&A by Well Health Technologies is supporting shareholder value creation. Furthermore, Keywood kept his “Buy” rating but nudged up his price target from $2.25 to $2.35 6, which at post time represented a projected 12-month return of 65.6 per cent.

Why WELL Health Technologies is a right fit?

WELL Health Technologies Company is still in early stage when you consider the population they cater to. Until now the company was mostly operating in British Columbia. Along with this, the company has already signalled that they will expand to other provinces in Canada and Ontario being the most populated is the ultimate place to be. The province where 14.5 million people need primary healthcare and this number is increasing 7.75% year after year.

Government of Ontario has recently announced the expansion of digital and virtual healthcare 7 . Once this new strategy is fully implemented, patients can expect more options for virtual care, online appointments, Patient data access, more tools for connectivity with the front hand and data integration.

We do believe WELL Health Technology has only scratched the surface until now. With the management team and the backing they have, we believe they can do a lot better once more revenue starts to come from the digital services. We will keep an eye on this story.

Disclaimer:

Information for this blog post was taken from various sources including sedar and Company’s website. The author has no securities or affiliations related to this organization. Always do additional research and consult a professional before purchasing a security. Theequitypodcast.com is only a publisher of content and not a registered financial adviser and do not hold any license. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision. None of the information contained in this website should constitute a BUY or SELL recommendation. Please read Disclaimer and Terms and Conditions.

Referenced Sources
  1. https://www.cbc.ca/news/health/wait-times-cihi-commonwealth-1.3984920
  2. https://interactives.commonwealthfund.org/2017/july/mirror-mirror/
  3. https://www.fraserinstitute.org/sites/default/files/comparing-performance-of-universal-health-care-countries-2017.pdf
  4. https://www.well.company/
  5. https://en.wikipedia.org/wiki/Li_Ka-shing
  6. https://www.cantechletter.com/2019/11/well-health-gets-a-price-target-raise-from-gmp-securities/
  7. https://news.ontario.ca/mohltc/en/2019/11/ontario-expanding-digital-and-virtual-health-care.html
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Amit is the founder of Theequitypodcast.com. A happy person, a web enthusiast and currently focussed on everything associated with running a Website, Blog and a Podcast. Also contributing to other online Blogs with articles and guest postings.

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