Editor’s note: This is the fifth in a series of company Q&As profiling presenters for Venture 2003.
RESEARCH TRIANGLE PARK –A4 Health Systems is somewhat unique among the usual presenters for a venture capital conference.
The medical health records firm is not new. It was established in 1971.
It is not small. The Cary firm now employs 214 people.
And revenue? A4 produced $31 million in revenues and was profitable in 2002.
But the company is considering outside funding and mulling optional exit strategies in the future. And its CEO has IPO experience.
A4 is looking to grow in the booming healthcare market, valued at some $1.3 trillion. Among the challenges health care providers face is dealing with patient records, especially with the implementation of the Health Insurance Portability Act.
“Our customers feel pressure regarding issues addressed by healthcare information technology, including patient safety management, cost control and regulatory compliance, and overall care quality,” says Ruth Mills of A4.
The healthcare IT market also is booming, she pointed out.
“According to Frost & Sullivan, Electronic Medical Records represented a $526 million industry in 2000 and is believed to be growing at of 8 percent annually. At this rate, the industry will be approaching $750 million by 2004,” Mills said. “Currently 10-15 percent of healthcare organizations have installed clinical systems, but reports indicate that almost half of 2003 technology spending in the healthcare market will be on clinical systems. There are approximately 14,000 physician practices and 6,000 hospitals in the nation.”
A4 also has an experienced management team, led by John McConnell, who co-founded Medic Computer Systems, an early leader in IT services for the medical industry. The company went public in 1992 and was acquired by Misys Plc in 1997 for $923 million. He joined A4 as chairman and CEO in December of 1998.
A4 is one of 23 companies preparing for presentations at Venture 2003, the Council for Entrepreneurial Development’s 20th annual venture capital event.
As it did a year ago, Local Tech Wire is featuring in-depth profiles of presenting firms built around a Q&A with a company executive as well as a Fact Box of important information. One profile will appear each day.
LTW put together a Q&A designed to not only produce facts about the presenters but also to give each a chance to state the case for venture capitalists to invest.
Fifth in the series is from Mills. (For links to previous stories, see list below.)
Venture 2003 is set for April 22-23 in Chapel Hill.
Times are tough. If you had only one chance and one paragraph to convince an investor, how would you answer this question: “Why should an investor choose your company?”
A4 Health Systems has the best comprehensive vision and clinician-developed products in the Electronic Medical Record industry. A4 has a proven track record, with satisfied clients and a strong market to grow in. The market includes a trend of increasing viability of healthcare information technology and computers as clinical tools. The $1.3 trillion healthcare market has a 14 percent share of the gross domestic product, but is one of the least automated sectors in the economy. Yet pressure regarding issues addressed by healthcare information technology, including patient safety management, cost control and regulatory compliance, is coming from many sources-and strengthening the opportunity in a market that to date has been only about 5 percent penetrated. With the capacity to serve any size of healthcare organization in ambulatory and acute care settings, A4 is well positioned within this marketplace.
What is the “pain point” (or points) you address for your customers?
Our customers feel pressure regarding issues addressed by healthcare information technology, including patient safety management, cost control and regulatory compliance, and overall care quality.
What makes your company unique? Do you have a proprietary and/or a patented technology? Please explain why it is unique and what the status is of any patent filings.
A4 is unique because we have a full electronic medical record offering for any size healthcare organization in both ambulatory and Acute-care settings.
What makes your product(s) and/or services unique vs. your competition?
Successful installs, happy clients, better implementation, clinical products built from ground up rather than adapted from a financial system.
Does your company already generate revenue? If so, how much?
Profitability has been established and maintained since the first quarter of 2002. 2002 revenues totalled $31 million.
What is your target market? What is the size of that market in terms of dollars? What share of that market do you believe you can win?
According to Frost & Sullivan, Electronic Medical Records represented a $526 million industry in 2000 and is believed to be growing at of 8 percent annually. At this rate, the industry will be approaching $750 million by 2004. Currently 10-15 percent of healthcare organizations have installed clinical systems, but reports indicate that almost half of 2003 technology spending in the healthcare market will be on clinical systems. There are approximately 14,000 physician practices and 6,000 hospitals in the nation.
Why will investors be impressed with your management team?
A4’s management team has a proven track record with venture funding, and growth to profitability.
What is the exit strategy for the investor from your company?
A4 is considering multiple options.
Just the facts on A4: www.localtechwire.com/article.cfm?u=3814
PREVIOUS PROFILES:
Gentris –www.localtechwire.com/article.cfm?u=3798
Elsinore Technologies –www.localtechwire.com/article.cfm?u=3787
Hemocellular –www.localtechwire.com/article.cfm?u=3776
Engineous Software –www.localtechwire.com/article.cfm?u=3760
