Credit Suisse https://www.credit-suisse.com as part of their Healthcare Disruptive Technologies & Innovations (HCDT&I) Series, hosted Lou Silverman, Chairman & CEO of Advanced ICU Care https://advancedicucare.com for a virtual meeting with a small group of investors.
As for a quick background check, Advanced ICU Care (AICU) is the nation’s leading provider of high acuity telehealth services, serving approximately 110 hospitals (2K contracted beds) in 30 states. The company is the largest provider of tele-ICU and remote inpatient telemetry services in the U.S., serving a diverse, broad, and growing client base.
The company serves a number of markets, including remote ICU monitoring, remote inpatient cardiac monitoring, and post-acute care. In addition, AICU has a number of other market extensions and service lines that they will be rolling out over the coming quarters.
Collectively, AICU sizes the TAM for ICU and telemetry at $5+bin but has yet to size the TAM for the post-acute market, so the addressable market for the combined company is materially higher that the cited $5+bin.
On the tele-ICU side, Mr. Silverman believes the market is currently ~20-25% penetrated while the remote telemetry monitoring market is virtually unpenetrated. AICU has 95% recurring revenue in addition to strong hospital retention rates of ~90%. In general, AICU’s pricing model is either on a per-patient or per-bed basis.
In 2019, AICU estimates they saved 2.031 lives based on an actuarial database for healthcare. Additionally, AICU’s services offer a 30-40% reduction in ICU mortality rates, a 25-35% reduction in ICU length of stay, and 15-25% improvement vs predicted results. Overall AICU delivers a 2-6x annual ROI for customers.
When Mr. Silverman started at AICU back in 2012-2013, the company was largely focused on standalone community hospitals (around 60% of the customer base). However, now, health systems make up around 80% of the customer base. AICU quickly pivoted along the industry trend of consolidation among health systems and now has a number of well-known health systems across the country.
Without disclosing the specifics, Mr. Silverman indicates that AICU has two major announcements coming up for significant client relationships. He sees health systems as increasingly looking at tele-ICU as standard of care across their hospital networks.
However, this may not be true for the larger health systems that have hundreds of hospitals. As for the middle market, AICU is seeing a significant influx of health systems looking to deploy technology-enabled ICU services which is significantly different than 10 years ago.
In response to the pandemic, AICU has added more internal reporting capabilities, simply to stay on top of things in light of the situation. According to Mr. Silverman, as a result of COVID, the definition for a care venue has evolved and expanded.
On whether 2021 or 2022 could be weaker in terms of telehealth adoption because of the significant pull-forward caused by the pandemic, Mr. Silverman notes that people have figured out that virtual care is cost effective and clinically effective as a means to deliver care. He believes that telemedicine has moved up significantly on the list of strategic priorities for health systems.
For more information and to provide feedback, email Jailendra Singh at jailendra.singh@credit-suisse.com or call 212-325-8121.