Oneview Healthcare founder has clear vision of future
Eureka moment led to service that could improve clinical experience for patients
Mark McCloskey: much of his early career was with Denis O’Brien’s Esat Telecom at a time when it was a proving ground for a whole generation of future Irish business leaders.
It all started in hospital, appropriately enough. Recuperating in a four-bed ward after knee surgery, access to the television quickly became an irritant for Mark McCloskey. There was only one remote and “the biggest guy had it”.
A little while later, back at work and on a flight, McCloskey was enjoying the in-flight entertainment system, and wondered how such an individualised set-up could improve the experience of patients.
That was the Eureka moment for the idea that was to become Oneview Healthcare. And, as he looked further into the possibilities, it quickly became clear to him that such a personalised service could also improve the clinical experience for patients.
That flight was in 2007. On Thursday, Oneview Healthcare floated on the Australian Securities Exchange in a €40 million initial public offering that values the business at about €140 million. A lot has happened in the intervening eight years.
McCloskey’s background was in technology not healthcare. Much of his early career was with Denis O’Brien’s Esat Telecom at a time when it was a proving ground for a whole generation of future Irish business leaders, including Vodafone’s Anne O’Leary.
He left Esat following its sale to BT in 2000 before co-founding what was then Ireland’s first non-bank ATM operator the following year with fellow Esat alumnus Mark Roden.
Easycash was responsible for the introduction of ATMs into stores and other locations nationwide before it was sold to Ulster Bank in 2004 in a deal that was reported to have brought McCloskey a windfall of close to €1 million. But he stayed with Ulster Bank following the deal, moving on only in 2007.
At that stage, Oneview was little more than an idea and much of the following five years was spent fleshing out the concept and developing the product.
In 2012, McCloskey met Australian James Fitter, a former banker who was to join the team as chief executive a year later.
It was Fitter who provided a key element for the company by knocking its balance sheet into shape. At the time, although Oneview was beating rivals in tenders for business with hospitals, it was losing out subsequently over concerns that its debt burden might mean the company would not be around to see through the latter stages of what would be five-year software contracts.
Paid off its debtAustralia
Entertainment might have provided the genesis for the Oneview solution but McCloskey was quick enough to realise that entertainment alone was an area with a lot of deep-pocketed competitors. And anyway while improved entertainment options might make for better patient experience, hard-headed hospital administrators would need more reason to make the investment in new technology.
“The main drivers for hospitals is that there is a lot of wastage and the driver is how can you improve efficiencies and how can you improve workflow,” says McCloskey, now president of the company. “And if you can do that with a product, that will eventually make you money.”
The genius of Oneview is that it integrates technology systems across a hospital. Its software will allow a doctor briefing a patient to pull up medical records, MRIs, X-ray or test results during consultations, making communication much clearer.
Patients can also use Oneview’s product for educational purposes, getting information about their condition, treatment protocols and outcomes.
The entertainment options remain as part of the broader product with Oneview offering everything from films on demand to television, access to Skype, books, audio books, and music.
If all that’s not enough, the system can also be tweaked to allow patients order their hospital meals online.
Language doesn’t have to be a barrier as the software provides multilingual support, allowing doctors and patients to communicate even if they speak different languages. “We don’t like to blow our own trumpet but we feel we have the best product in the market because we do such a wide range of things for the hospital,” says McCloskey.
“If the hospital is looking for just basic TV, they will go with competitors, but if they are trying to integrate into the hospital systems and improve efficiencies and workflow from a clinical standpoint, then we are the product of choice.
Early on, McCloskey realised the export market was going to be its focus.
“It is a serious investment for hospitals to make. Hospitals are very committee- based and it takes a long time for decisions to be made. In Ireland, the health system doesn’t have any money. We realised we had to go outside Ireland if we were going to make any money.”
Oneview is currently used in nine hospitals – three in Australia, three in California, two in Dubai and also in Dublin’s LauraLynn Children’s Hospice.
Between them, they have 1,300 beds – a key metric as Oneview’s revenue model is worked out on an annual price per bed basis.
The company has a further 10 hospitals in its short-term pipeline.
Those include a major expansion of its business with the Australian Epworth Healthcare. Oneview went live in one of Epworth’s hospitals in January last year. Nine months later, Epworth returned.
“After they saw what the system did and the efficiencies that they received, they decided to bring it out to the whole enterprise,” says McCloskey. That accounts for eight of the 10 hospital.
The company is also “going live” with one of the largest children’s hospitals in Australia – the Westmead Children’s Hospital in Sydney by the middle of this year. “And we’ve also won a very high profile hospital in the US, called University of Iowa Hospital in Iowa City, and that’s going to go live the middle of this year also.”
That would more than double the number of beds under its service to about 3,200, and McCloskey says the company is either in contract negotiations or at the “request for tenders” stage for a further 7,000-plus beds.
Plenty of potential
That’s expected to grow to $13.9 billion by 2019, a compound annual growth rate of 20 per cent. Within its key markets – Australia, the United States and the Middle East, Oneview says there are an estimated 1.1 million beds.
“I think, from our perspective, once we can prove that a more engaged patient leads to a better outcome, for us that would be the promised land and it would make everyone’s job easier to sell,” says McCloskey.
“Countries are trying to move away from having people in acute hospitals and move them more to ambulatory centres and the home environment, so we feel there will be huge growth opportunities moving people and connecting people whether they be in a clinic, in the home or in a hospital.” When Epworth made the decision to expand the rollout of Oneview, they listed some of the positive changes they had noticed in just nine months’ operation at the pilot unit.
“What they saw was a 30 per cent improvement in their patient satisfaction scores and a 6 per cent decrease in length of stay. So it meant more throughput in the hospital, which means more money,” says McCloskey. “In addition they saw a 6 per cent decrease in pressure ulcers, a 4 per cent reduction in falls and a 10 per cent reduction in food waste because we were digitising the meal ordering. So on that alone they then signed a contract for the next seven hospitals.”
With everything going so well, and the company having raised €12 million just last December, why decide to float just now?
“If you asked me about 12 months ago , I probably would have said ‘no, we won’t float’, but we recently raised another €12 million [last December] and when we were down here in Australia – one of our shareholders down here is chief executive of Moelis [stockbrokers] – and he suggested that, if we wanted to get more growth capital, we look at the Australian market because they were very interested in bringing innovative tech companies on to the Australian Securities Exchange.
“And when we did a pre-roadshow, the excitement down here was absolutely fantastic so we said why don’t we go and raise money and begin the [company’s] growth much quicker than we would have anticipated just by raising the €12 million.”
The IPO sees new investors taking up 31 per cent of the business – including family and friends who were invited to take up shares under a “chairman’s list” element of the offer. About 40 per cent remains with directors and staff, with the balance, just under 29 per cent belonging to early stage investors.
McCloskey doesn’t see the company requiring further funding any time in the near future.
“The board is quite conservative so they were probably raising more money than we think we need [now] and it is to fund our growth now and into the future,” he says.
“So we don’t anticipate coming back to the market but if we do, it would be for a very good reason – that we are probably growing faster than we had anticipated.”
McCloskey and the senior management team at Oneview appear to have no interest in resting on their laurels.
US and Australian marketsEurope
It has also signed a deal recently with hardware provider Lenovo for the US and Australian markets. It already operates with HP.
“What we’ll do in Asia is probably go into the medical tourism market rather than go into the mass market,” says McCloskey. “So we will be strategically picking where they concentrate on medical tourism.”
And while the company has still to break into profit – it reported losses of €10.7 million on revenues of €2.3 million last year – it is already looking at expanding beyond its initial product offering.
“We’re definitely going to stick to just healthcare but within healthcare we are moving into two of the other growth areas for our product – assisted living/senior living markets and mobile.
“We have already signed three deals in the US with a Floridian company in the assisted living/senior living space and we will be expecting shortly to sign one here in Australia.
In the mobile space, the company recently launched Oneview Connect “which is connecting patients to the hospital prior to coming into the hospital. Then on discharge, we are sending them info on when the next appointment is, when to change their bandage, when to take their medications . . . so it gets through the full continuum of care”.
On the promise for its future, the company’s shares rose a modest 2.5 per cent in its first full session on Thursday. But did McCloskey see all this coming when he first had his inspiration on that flight?
“When I started the ATM business, I knew nothing about banking, and when I started the healthcare business, I knew nothing about healthcare, so no I never would have thought I would be here.”