Get The Memo: Issue 13
Early Intervention Systems
Company Overview
Often, the best companies solve unsexy problems, and speaking of unsexy problems, let’s discuss healthcare patient agitation. PATIENT AGITATION IS A PUBLIC HEALTH ISSUE. A 2018 Jamda study found that patient agitation increased informal care costs by 17% per month in healthcare settings, creating a substantial impact on costs in the community care setting. This is a $55 billion dollar market in long-term care alone, according to the BMJ Open 2015. The average cost of turnover per nurse or caregiver ranges from $37,700 to $58,400. On top of this, there are over 3.4 million reported physical outbreaks in memory-care facilities annually. Early Intervention Systems, or EIS, wants to solve this problem and the additional cost patient agitation adds to the healthcare system.
EIS’s Founder & CEO, Nathalya Ramirez , lost her grandmother who was agitated very frequently due to cognitive decline, but lacked the proper monitoring and tech to notify caregivers. After she graduated from The George Washington University with a major in Biophysics, Nathalya gained experience in nanofabrication and advanced statistical analysis and will help with prototype/algorithm development.
Rohan, their CTO & Co-founder, was pre-med in college and when shadowing a doctor in the emergency department, he witnessed an agitated patient physically attack a staff nurse. After that experience, he started to dig into data around how often agitated attacks happened and where they most frequently happened.
When he realized that these agitated attacks happen most frequently at elder care facilities and were primarily treated retroactively with medication, he decided to try and create a solution for this space. He partnered with his biophysics classmate Nathalya who has a background in developing and implementing scientific training and Krishan who has a background in business and financial models to launch the first version of EIS.
Market, Model & Inflection Point
EIS’s market in senior living and behavioral facilities is in the midst of a technological transformation due to the Covid-19 Pandemic. One main market driver is the influx of baby boomers, many of whom stay in these specialized facilities or live in a home-healthcare facility within the next 10 years.
Their service will predict when a patient will become agitated, using a predictive deep learning algorithm. By using IoT devices they will provide an innocuous way to monitor high-risk patients that pose a danger to staff, other patients, and themselves, by tracking various biometric parameters.
Their business model is a B2B sales on subscription basis. They charge per patient per month for the wristbands and charge monthly for the software on a SaaS basis. Their customer business model relies on monthly fees paid by its residents.
EIS is initially targeting private high end memory-care facilities that have a population of 30–70 residents and charge between $6,000-$10,000 per month for one resident. This model can be expanded to rehabilitation centers, assisted living, and home-healthcare. They also plan to add a licensing option for any facility that already has its own EHR/EMHR system in place. This option would allow them to enter into any medical facility in the future as their system uses entirely environmental sensors instead of wearable sensors.
EIS is going to be tracking their growth through the number of facilities installed and the number of deposits for future installations. The cost of customer acquisition is about $35,000 per company. Each company would operate around 20–40 facilities each. The CAC would include the cost of attending conferences, demos, interviews, and pilots. They are going to be tracking their progress with their service by looking at a reduction in agitated outbreaks and turnover.
The Covid-19 pandemic has highlighted the need to protect healthcare workers while also improving the care for patients in behavioral health settings. In addition, EIS has also seen loved ones wanting to have more monitoring options available for their loved ones in these facilities.
As the inflection point, EIS has seen state governments start to mandate more patient monitoring and technology to better monitor patients. In addition, a rise in adoption and acceptance of more technology in these facilities has helped them develop their services even more.
Competition
EIS has identified 5 competitors such as PointClickCare, Hillrom, and BioXcel Therapeutics. All of these companies are either reactive and/or pharmacological. However, technologies at EIS use artificial intelligence models to alert the caregivers so they can proactively engage with the resident without the need of medication. This proactive approach is cheaper, more innovative, and not commercially available as of yet, making them the pioneers of this type of intervention.
Long-term competitive advantage will also ensure that their service continues to evolve with the changing needs of these communities, whether it be licensing, making changes to the software, or staying up to date with compliance. They have already established meaningful partnerships with clients that have helped to improve the features of their software, such as helping caregivers attend to residents who may need attention and reduce any concern for notification fatigue. They will also develop long-term partnerships with associated service providers, such as remote monitoring hardware companies.
How would you deploy capital if you would hit your next milestone?
Capital will be used for expansion, hiring more technical staff, and to conduct more research.
EIS’s burn rate has been incredibly low since there are no team members on payroll. Much of the hardware needed to generate revenue has already been purchased. Their only monthly expenses that are above $100 are cyber insurance and cloud computing costs. They have also won a couple of pitch competitions to have enough funding to last about 6 months.
One risk is working through the barriers of our sites in order to implement their solution. For example, the current site they are collaborating with has no existing electronic records. They have mitigated the initial business risk of implementation as they have gained the support of many executives at this site. As a result, the extreme cooperation they have with the site’s executives have reduced the uncertainty in product adoption when pitching the site’s larger corporate executives. Training healthcare workers on how to use the product might pose a challenge; yet, they have made the software as easy as Apple’s Health app to use and access relevant patient data. One hole they are looking to fill is to have a software lead to assist their CTO and Development Advisor as they continue to install more facilities through 2022.
What is the legacy you as a Founder want to leave?
I look forward to contributing to our society proactive solutions to systemic problems that reach millions of people across the world and can lead to a better quality of life and more access to opportunities, especially for underprivileged populations.
