Devices & Diagnostics

Is ResMed’s $800M health IT buy a pivot away from devices?

No. “It’s a logical double down on connected care,” CEO Mick Farrell said – as ResMed plans to streamline the home medical equipment supply chain.

resmed

ResMed may best be known most for its line of CPAP masks that treat breathing disorders like sleep apnea – but it just purchased cloud-based clinical software purveyor Brightree for $800 million.

Does this mean the San Diego public company – in light of all the regulatory and reimbursement issues that plague medical devices – is pivoting into the digital realm?

Not quite, said ResMed CEO Mick Farrell said in an investor call.

“It’s a logical double down on connected care,” he said.

In the last 18 months, ResMed has put a communications chip inside every one of its devices – and taking that data to the cloud. ResMed has been liberating that data, Farrell said – providing value to patients, payers and providers.

ResMed has two connected care programs – ResMed Air Solutions and U-Sleep – which have both already provided several efficiencies for its customers. For instance, Farrell said Air Solutions has allowed up to a 60 percent reduction in labor costs to set up ResMed’s breathing devices and manage patients. It’s also improved patient adherence from baselines of 60 percent adherence to up to 87 percent adherence with its connected care approach.

Brightree offers business and clinical management software for the post-acute care industry – with a heavy focus on home healthcare and hospice. ResMed plans to run North Carolina-based Brightree as a separate entity, though it certainly plans to benefit from the “tax synergies” in play – as well as its help in customer recruitment.

The Brightree acquisition will help ResMed connect with patients in home health or hospice, and identifying some as potential customers, Farrell said.

“I think it’s less about [whether] device innovation is limited, because I still think there’s a lot of room for device innovation,” Farrell said. “But there’s a great opportunity for us to grow and expand our cloud-based capabilities.”

Indeed, there’s room for growth in developing more advanced breathing device, he said. Indeed, earlier this month ResMed made another acquisition – buying Inova Labs, a maker of oxygen therapy devices, for an undisclosed sum.

But this acquisition grows ResMed’s focus on “creating efficiencies” in the home healthcare value chain, Farrell said. Last July, it acquired CareTouch, which focuses on cloud-based process automation for resupplying for home medical equipment providers.

“The ‘why now’ is that I think we’ve established a core competency in healthcare informatics,” Farrell said. “We’ve established ourselves as a global leader in connected care, with the most cloud-connected medical devices on people’s bedside tables.”