In the latest digital health acquisition, Medical Specialties Distributors has acquired VerbalCare, a startup that developed a set of apps to enable hospital patients recovering from procedures or existing conditions to improve non-verbal communication. MedCity News previously profiled the business last year.
Although it was initially developed to help stroke patients in particular, its uses have broadened beyond this patient population. CEO and co-founder Nick Dougherty started the business in April 2013 and it also took part in Boston incubator Mass Challenge.
In response to emailed questions, Dougherty declined to disclose the details of the transaction. He did tell MedCity News that VerbalCare and MSD will operate independently with separate employees and offices. When I asked him how this acquisition fit with current trends in healthcare consolidation, he said:
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
“Device companies can leverage their established customer bases and capital to help startup companies like VerbalCare reach more patients quicker. It’s really a great opportunity on both sides. For the device suppliers, they get new solutions to offer their customers and for startups, they get years of relationships, leads, and expertise overnight.”
Given the desire by medical device companies to offer more services to providers as part of the anticipated change in the reimbursement framework, Dougherty noted a sense of urgency by these businesses to stay ahead of the curve. Some companies view acquisition as the easiest way to move their businesses to that stage.
“I believe MSD recognizes what they do well and where they can improve. Hopefully our solution helps their customers deliver better patient care and ultimately achieve higher value based payment scores at a reduced cost of care.”
He added that he saw the acquisition route as preferable in a lot of ways to the traditional startup funding route of angels and VCs.
“With MSD, we both have the same customers. We both have the same goals of delivering superior quality products and services. We both want to make the lives of patients better. I think that might be why digital health startups are excited to work with acquirers–the alignment is much clearer.”
Photo: VerbalCare
