​Disrupting Tech Seeks to Raise Efficiency in Health

Gary C. Bizzo  |

NEC Corporation of America via Flickr

In past articles, I’ve taken a look at common industries that are going through change through the introduction of a disruptive competitor to the market. From Freight being managed by an Expedia-type SaaS (Freightera

) to battery power replacing movie generators on set (Portable-Electric

Profiting From Energy Efficient Cryptocurrency Mining

) and Uber-esque courier services like ParcelPal, people are inventing and developing better more effective ways to get things done while capturing their own market share.

Some industries may seem safe from disruptive technologies; accounting, data management, government and banking, but entrepreneurs can always find a better way given some ingenuity and an opportunity to edge themselves into an industry. Government, it seems, is reluctant to digitize a paper-based system. Building inspectors still use clipboards and triple page forms to make note of changes or note building issues. While problems will develop for these kinds of inspectors, other government areas like health and the food industry cannot afford to have less than perfect quality assurance.

Chipotle’s (CMG) sudden fall from Wall St. after last year’s ecoli outbreak is still affecting their $6B market cap. The brand was decimated. The brand positioning had consistency sold itself as "food with integrity." An ecoli outbreak sent confused customers running... and they are not coming back quickly.

It doesn’t take much for consumers to lose their taste for a brand. Often it is catastrophic, like when Maple Leaf in Canada fought their listeriosis out break in 2008 that killed 22 people. With the outbreak came a debate on the privatization of food inspection. The Canadian Food Inspection Agency (CFIA) added another 200 inspectors to the organization as a result.

Change has been inevitable in the food inspection business and it’s coming in the form of increased scrutiny and data management by digitizing the reports health inspectors make. Over the past ten years, a handful of companies have entered both the government and private side of quality assurance in an effort to streamline the process of protecting the health of the consumer. It’s estimated that paper reporting is still the norm in 50% of government health inspection agencies.

When health crises occur, it’s incumbent upon the government regulators to get as much data out to the public as soon as possible to avoid more contamination and to reduce the ill effects of the outbreaks. More data allows the government to investigate and determine the causes faster and more reliably.

With the digitizing of health reports, the commercialization of the report is also coming to the forefront. A simple app that allows easy data collection by inspectors also provides publicly available information that can be used in new, innovative ways. Vancouver, the center of disruptive technology in Canada, has a two-decade old company; HealthSpace that is turning health inspector reports into a central database, and is changing the way restaurants and chains do business.

The health industry needed a visible answer to paper and inefficiency with HealthSpace. This publicly traded company is already a dominant force in the inspection reporting industry in the US with their EHS software products. Peter Smyrniotis, CEO, has inherited 300 government clients to date that continue to renew with HealthSpace. The organization has yet to lose a single customer. Further, HealthSpace has been delivering its new cloud-enabled software as a service (SaaS) product suite and mobile technology bundle since Autumn of 2016 and has developed new customer engagements around this exciting technology offering.

HealthSpace was started in Vancouver in 1998, by a health inspector fed up with the government system. By 2001, it had secured its first US client and Health Canada became their big player in Canada shortly after. In 2014, their mobile app for inspectors changed the face of the industry.

Information is power, and with data from over 30,000 restaurants a month going through HealthSpace’s program, vast amounts of data is available for commercial purposes as a second revenue verticals.

HealthSpace announced a contract with the Fraser Health Authority (FHA) this month in Vancouver. The service agreement with the province’s largest health provider gives HealthSpace a 5-year contract to host, and maintain its entire environmental health inspection, permitting and regulatory enforcement system. FHA services approximately 1.5 million Vancouver residents.

In 2016, the company released a fully revamped public and environmental health cloud-based software suite that clients can configure for their specific data collection and analysis needs. The mobile apps for IOS and Android allow inspectors to gather field data that syncs directly into their main database with no need for manual data entry. HealthSpace’s positioning now empowers governments to utilize these unique data sets or aggregate and amplify their own data initiatives.

HealthSpace’s software allows a typical inspector to cover twice the amount of clients per day while providing more comprehensive and accurate reporting.

HealthSpace’s core business model to date has been almost exclusively focused on federal, state, county and municipal governments offering both enterprise and mobile services. Because HealthSpace is growing so rapidly, it has become the hub for other revenue verticals. Going public in 2015 allowed HealthSpace (HS-C) to upgrade its technology, move to the cloud and provide a new level of efficiency to the inspection process. New verticals like QA and Auditing reporting for restaurants, hospitality organizations and assisted living customers to keep ahead of the inspection process, chain management of QC and continuous health audits are a positive side effect to the digitized report system and allows HealthSpace to expand into their commercial sales build-out to North America. Commercial organizations make up the bulk of the global $34.27 billion health data market.

It was announced last week that HealthSpace brought some heavy industry hitters to the Advisory Board. Ian Tostensen, the President of the BC Restaurant and Food services Association, Steven Lee, who had major roles in #Mobify, #Slack and #GrantThornton and George Moen, Founder and former President of Blenz Coffee are ideally suited to HealthSpace with their vast M&A and industry experience.

HealthSpace’s move into the Cloud was a bold move to capture the governmental market. Being centrally controlled in the cloud gives HealthSpace the ability to easily add functionality and since it’s single configuration, development testing is faster. Governments love the software because it requires less customization and is easier to implement. By having recurring charges on long-term agreements there is practically no turnover of clients. Once the program becomes embedded in the government systems, there’s little reason to change. Couple this with the SaaS effect of commanding higher multiples it is much more financially attractive to investors.

HealthSpace recently partnered with another Vancouver company - Keboola, that allowed HealthSpace to develop a best in class data reporting platform for their existing and new clients. HealthSpace continues to grow a blue chip customer base of government clients and is focused on the vast business opportunities in commercial enterprise engagements to accelerator the growth of the company.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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