Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
A HealthTech Pioneer, A Conversation with Mike Wessinger at PointClickCare
51 Plays1 year ago
Explore the transformative journey of PointClickCare, a healthcare technology trailblazer inspired by Salesforce's success mantra. Overcoming skepticism, the company pioneered a seamless Software as a Service (SaaS) model in post-acute care, serving thousands of facilities. Strategic acquisitions and recent ventures, including Patient Pattern, demonstrate their commitment to innovative healthcare solutions in an evolving landscape. Mike Wessinger, Co-Founder of PointClickCare, joins Frederic Laurier at Alantra to discuss the growth journey of the company.
Recommended
Transcript
Introduction of Fred Lawyer and guest Mike Wessinger
00:00:05
Speaker
Welcome to another episode of Crossroads by Alantra. I'm Fred Lawyer, and I lead the firm's digital health practice.
Founding of PointClickCare
00:00:12
Speaker
Today, we have the great pleasure of hosting Mike Wessinger as our guest speaker for this episode. Mike founded Point Clear Care in 1995 with his brother, Dave, is now chairman of Point Clear Care, a leading software vendor to senior care facilities across North America. It orchestrates everything from medical records, scheduling, and billing, creating a harmonious and efficient approach to senior care.
00:00:34
Speaker
Mike himself has been recognized as one of the most successful CEOs of Canada, winning a number of awards, including being named on the Glassdoor 2020 list of top CEOs, and also being named one of Canada's most admired CEOs. He was also appointed by the Ministry of Health to the Ontario Health Data Council most recently. It's quite an impressive track record, Mike. Given that you have completed your degree in 1993, was PCC the only job you've ever held?
00:01:02
Speaker
Yeah, I had a brief stint as a sales rep in the post-acute care space. That didn't last long before I decided it was time to go out of my own and see if I could build my own business.
Origin of PointClickCare's name
00:01:13
Speaker
Mike, I've always wanted to ask you, how did you come up with the name PointClickCare? What was it meant to convey initially? The name PointClickCare was interesting where it came from.
00:01:25
Speaker
Before anyone had heard of Salesforce.com, we had already developed an application that was delivered in the SaaS delivery model, before SaaS or cloud computing. So when we first found out about Salesforce.com, I called my brother, David, and said, this guy, Benioff in California, is knocking off all our great ideas about software. He delivered over the internet, charged a subscription. It's almost laughable now when you think about it.
00:01:47
Speaker
But they did have a slogan on their site and it said, salesforce.com point click close. And I thought, wow, we're like point click care. I think that's the name that we should use. And it was really meant to convey the simplicity of being able to get all the benefits of a modern electronic medical record system and related financial applications without any hassle and expense. So the name stuck.
00:02:12
Speaker
It's a pretty catchy name, Mike. Well, thank you for the backstory. Really appreciate it. Emulating Salesforce was not the worst business decision ever, was it? No, I think they were pioneering a new model for software delivery, one that I think appealed to people who had struggled with implementing enterprise, ERP and enterprise software.
00:02:32
Speaker
I think we caught on to the same model. People that were dealing with electronic medical records software, we were just solving for a problem when we first came out. We said, listen, what if we could go to this market that has no money, no technical sophistication, and is highly regulated, and deliver something by putting out one set of servers delivered over the internet, and just charge them on a cost per patient date the same way
Growth through SaaS model and Word of Mouth
00:02:54
Speaker
they get funded?
00:02:54
Speaker
Well, little did we know we were stumbling onto SaaS computing before anyone can spell SaaS or anyone started calling a cloud. But we were just selling for a market problem at about the same time that Salesforce had figured out the same thing. So we caught the right wave at the right time.
00:03:09
Speaker
With hindsight, it's easy to say that PCC is a resounding success because obviously you are the behemoth of senior care. You're in over 2,700 post-acute care facilities. You have now close to 2,000 employees. You're in 3,000 plus hospitals and pretty much cover every major US health plan. Of course, all of that is extremely impressive. Aside from the technology eureka moment you had, what was the trigger for you and your brother to say, we need to build this?
00:03:39
Speaker
No kid in college or university gets excited about building software for the long-term post-acute care business. It's not sexy from the outside, but it all comes back to my mother. She's a CPA by trade, worked for a nursing home chain that specialized and they own some of their own homes. They would manage some of these distressed assets out of bankruptcy.
00:03:58
Speaker
And it's through her connections that me and all of my brothers, three brothers that are software engineers, I was the only one that wasn't. That wound up in the industry, my brother on the provider side as a manager of IT for a nursing home chain and me on the sales side. And it was in that industry that my brother and I recognized that there was a market that was incredibly under serviced. And that's when we decided to get into the space and build our own solution and really introduce it according to a different model stumbled onto that SAS model.
00:04:25
Speaker
It's very interesting going back to your roots, Mike. You've mentioned selling to senior care. It may not sound sexy, but what about going to senior care executive and telling that person that you're going to sell a software suite on a SaaS basis when nobody knew at the time what SaaS stood for?
00:04:40
Speaker
Yeah, you can imagine this is back in the early 2000s and people were just getting used to having cell phones and the internet. It took a long time for people to understand this model where they weren't going to be hosting their data on site and they had to pay a subscription versus sort of a one-time fee and maintenance fee. However, the appeal of not having to buy, install, or maintain any hardware or software was incredibly strong to them.
00:05:06
Speaker
Because it was such a new model, we let off with a month-to-month payment. They go, what happens if I don't like your service in a month? We just said, just stop paying us. So it took a little while. And of course, you have to go after the visionaries first, before the early adopters, before the mainstream. But the value proposition was so incredibly strong, and the risk was so low. What we ran into more often than not was, what's the catch? It's too good to be true.
00:05:34
Speaker
Once we were actually able to deliver on our promise and our value proposition, the word spread like wildflower. We are bootstrapped. We didn't have a lot of money for go-to-market spending. It was the viral word of mouth about how compelling our model of delivery was and how simple our software was to use that really allowed us to take off. And what about data privacy? A huge issue back then. I would love to hear you on that initial sell to a big chain.
00:06:03
Speaker
Was that a bigger concern than for the smaller facilities? In the early days, HIPAA was on the top of everyone's mind. And so when we go out to see our early customers, we would have to really spend a lot of time walking them through everything we'd done and the third parties we engaged in order to deal with all of the HIPAA issues. When it came to large multi-billion dollar market cap companies, us and our third party reporting wasn't giving me enough for them. They had to do their own due diligence. That meant
00:06:30
Speaker
Days before we were in the public cloud, it meant coming to our data centers, third party data centers where it was our own servers that we were hosting on and doing all of their own due diligence so they could have the confidence that we had covered off that requirement for them because the risk was high if we didn't. And I'm guessing after the first one, I'll borrow your expression. It did spread like wildfire. If you could do one, why not go after the other big ones? Is that what happened or was the second one difficult to replicate?
00:07:00
Speaker
So the first two are actually fairly straightforward. And we had the two CIOs of those companies were incredible partners to us and they worked with us. I think the rest of the industry sat back and they'd seen this movie before and said, taking on two behemoths, top five chains simultaneously with a new model and a new company that we hadn't heard of before, the likelihood of them blowing their brains out as high. So let's just sit back and watch.
00:07:26
Speaker
And they watched as we rolled out, and because these were chains that had communities measured in the hundreds, it took years to roll them out, sort of a state by state plan to roll them out. And they kept waiting for the blow up. They kept waiting and waiting and waiting. It never came? No CIOs, it never came. And then two years after the rollout, they started to go, wow, these guys are for real.
00:07:48
Speaker
And not only are they continuing to be successful with two behemoths, they're just ripping through state by state, taking down all the independence and midsize chains. I think it's time. This is an industry where nobody wants to be first, but also nobody wants to be last. In a very short amount of time, we had gotten to eight of the top 10 chains.
00:08:08
Speaker
a good chunk of the market is very risk averse. They waited to see that we were successful. And once they could engage with us and know that there was a predictable high probability of them getting success, then they jumped on board.
00:08:20
Speaker
All very interesting, Mike. I've known you for a long time. During your earlier days at PCC, you weren't against acquisitions, but didn't see an immediate need for them either.
Strategic acquisitions for market expansion
00:08:30
Speaker
I guess you were going so fast, so that makes a ton of sense. However, in 2013, things started to change and M&A started to be part of your playbook.
00:08:39
Speaker
Initially, you did a couple of smaller deals, meal metrics and touch stream. If I'm not mistaken, were your two first ones going to have your foray into M&A. In 2017, you received some more money, follow on investment from JMI. Also, I think Dragoneer invested in Pointe Clique at the time as a first time investor. After receiving those investments, you did a pretty bold move. You bought Audacious. What year was the Audacious deal again?
00:09:08
Speaker
It was 2020 is when we bought collective, 21 was when we bought audacious, both in the same space, two players in that care collaboration space. So when I think about acquisitions, I think there's a lot of companies that just get into acquisitions too early. They're hard.
00:09:24
Speaker
And we are in a growth tornado market and acquisition at the time when we are adding at one point. Two to 300 new communities a month on our subscription service. There was no way that we had any bandwidth to deal with acquisitions. It's once that slowed down a little bit and a lot of our growth was coming from just selling more products to same customers and solving more problems for the same customers. We had the bandwidth to start adding on inorganically.
00:09:49
Speaker
the acquisitions are incredibly hard. So you start small and you start to build your acquisition shops, get better and better and better at it. And then we felt like we had a pretty good model for bringing things in, acquiring them in and rolling them into the fold of point-click care. But collective medical and audacious, they're different because it entered us into a new space. This wasn't just add-ons or acquisition of a competitor for the senior care space.
00:10:16
Speaker
This was getting us in the care collaboration space and that meant we're dealing with a different set of customers. We've got hospitals and health plans and ACOs as customers. So it was new, so it was good that we had the experience of understanding how to do an acquisition and how to incorporate the acquisition.
00:10:33
Speaker
But for us, the other was real industrial logic there. If you're gonna truly solve the problem for post-acute care, you've got a last mile problem, which is you can't just do everything within the four walls of a community. You need to be plugged into the broader healthcare system, which means you need to deal with things like transitions of care and being able to give insights to those post-acute patients beyond the four walls. That could be a care coordinator, that could be a health plan, or could be a health system.
00:11:02
Speaker
So it just made sense for us. We had built these tools that could provide these great transitions and provide great actionable insights to people outside of long-term post-acute care, so outside of our traditional customers, but we didn't have a network yet.
00:11:17
Speaker
And it takes decades to build a network. And so rather than go out and do it organically, we looked down and said, well, who's already doing this? Who's already done the hard work, rolled up their sleeves, crawled through the ditch with a knife in their teeth, taking them down one at a time. And it was collective and audacious. And we said, look, there's ones coming to market. I think the one we want is the leader in the space. Let's buy collective.
00:11:40
Speaker
and then shortly after on its heels, let's take number two in this space and that was audacious. Let's go and see if we can put together this network so that we can layer on all this value-added insights for these providers into the post-acute care market, especially as we're running headfirst into a value-based care world. When Dragoneer came in,
00:12:02
Speaker
They're known to be long-term oriented investors. How did the next growth chapter discussion evolve?
Investment and new growth phase with Dragoneer
00:12:07
Speaker
Did you initiate it? Did they initiate it? Any change you notice in terms of mindset after that 2017 investment? Listen, they're looking for multi-decade investments. They've got an interesting fund that's evergreen.
00:12:21
Speaker
Healthcare is complex and they're not healthcare specialists. So for them to even conceive of what it is we would need to do in the care collaboration space, I'm not sure that was really on their radar. It certainly wasn't in their underwriting case when they invested. Their underwriting case was based on our core market and the 15, 20 year runway we had to digitize more of the post-acute care space. It was really driven by our desire to solve that last mile problem
00:12:48
Speaker
But in doing so, it really also creates a market where we have really a new wave for growth, which is in our core business. We've got a 15, 20 year.
00:12:59
Speaker
runway of just digitizing more of the senior care space, skilled nursing, long-term care and assisted living. That's a long runway and we got a lot of work to do there. And then we saw the intersection, which is transitions and providing actionable insights on the post-acute care market. But it also gets us in the care collaboration space, which is really a new area for us where we see, I think we're only touching the tip of the iceberg. We've got plenty of opportunities that I think that will fuel really our second wave of high growth.
00:13:27
Speaker
Maybe a couple of questions and then we'll let you go, Mike. We'll switch gears if you don't mind. We'd love to get your two cents on a few healthcare trends. The first one being, of course, value-based care always is the elephant in the room to some extent. We've discussed it at length with other guests, but I'd still love to hear your thoughts on what role the risk-bearing entities, let's call them RBEs, will play since now they're effectively assuming risk. How will you be working with them?
00:13:55
Speaker
your talk in physician hospital and also in dependent practice associations as well as ACOs.
00:14:02
Speaker
Yeah. So I think that's inevitable value-based care and risk-bearing entities. It's undeniable the days of fee for service while it's not going away tomorrow are going to be limited. And those who can't get away from that will either cease to exist or they will be working on the smallest margins and quite frankly, probably working on behalf of some risk-bearing entity. The thing I get excited about in the post-acute care side is first time in a while that I've got the become excited
00:14:27
Speaker
We've seen margins get crushed for skilled nursing providers and even some assisted living providers who have been taking on, let's call it non-private paid patients to provide some services that are less traditional for assisted living.
00:14:41
Speaker
They've, hey, I make money on my Medicare patients, those margins continue to get crushed with things like Medicare Advantage plans, Medicaid patients, I generally lose money on subsidizing with Medicare. But the first time ever, I've seen our more sophisticated customers get more enthusiastic. When they start to look at special needs programs like iSnips and dSnips, they're saying, look, if I can start taking on risk,
00:15:04
Speaker
then there's an opportunity for me to make margin. So one of the most recent acquisitions we did was patient pattern is really a toolset to help our customers take on risk so that instead of looking at a Medicaid patient, that's going to be low to negative margin and then continually watching your Medicare patients margin shrink
00:15:25
Speaker
they can start taking on risk. And those who take on risk, instead of say, United, are going to be in a position to make significant margins, and not only on their Medicare population, but on their Medicaid population. Now, there is a catch though, right? One is you need the tools to be able to manage this stuff, which is why I'm thrilled about our latest acquisition, to be able to provide them with the tools
00:15:47
Speaker
But number two, if you're going to do it, you actually have to provide the outcomes. You have to be a quality provider. So I think the future is going to be same number of beds and rooftops, but it will be the sophisticated providers who have understand how to take on risk and deliver quality outcomes will be the winners in the future. They're the lowest cost in the chain of host acute care delivery, but they're going to be if they're prepared to take on risk and prepared to deliver those outcomes, they'll be in a position to actually make positive margins.
00:16:16
Speaker
This is the last question, Mike. It's been said many times
Challenges in home care and future potential
00:16:19
Speaker
over. One way of reducing costs is pushing acuity closer to the home, keeping patients out of the hospital. Readmission penalties implemented a number of years ago is a case in point. Home care has been around for a long time. Remote patient monitoring for a good decade now, if not more. What do you feel are the major roadblocks that still exist today to make that objective a reality, Mike?
00:16:44
Speaker
Yeah, I think the challenge with home care is there's a certain acuity level that it's not cheaper to provide care in people's homes, you get six or seven comorbidities or six or seven disease dates, getting someone to look after you 24 hours a day, it's not more cost effective. So obviously, this people's preference, they'd love to stay at home as long as they can. And that will continue. And the ability
00:17:06
Speaker
for people to stay at home longer should become more accessible with remote patient monitoring tools. And the other thing I believe is tools that can bring in informal caregivers, daughter, daughter-in-law, son-in-law, three time zones away that can be part of the care team so that they can allow people to stay in their homes for longer.
00:17:24
Speaker
Ultimately though, when people get to a certain disease state, they're gonna have to move into an institutional setting. Where I think care in the home will thrive is in congregate settings, where you've got a bunch of seniors in naturally occurring retirement communities, or they're in assisted living or independent living, where it becomes cost effective logistically to provide services at home.
00:17:46
Speaker
Because we play well in the independent and assisted living space i think that's the kind of area of traditional home care i think it's different margins are gonna be challenging there but interesting new models will develop and i think the area that becomes of interest for us to play is areas where we already have a congregate community of seniors where services need to be provided.
00:18:08
Speaker
what you call that and what the risk model might be. I think our play is not going to be traditional home healthcare. It's going to be in models where we have density of those people who need those services. To some extent, something akin to specialized clusters. Yes, exactly. Hey, Mike, it's always a pleasure speaking with you. I do look forward to our next discussion and I wish you a great end of the day, Mike.
00:18:31
Speaker
Thank you for listening to another episode of Crossroads by Aloncho. We hope you enjoyed the discussion with Mike on how he and his family started point click care at a time when people could not even spell SAS. Their acquisition journey to enter a new market, their partnership with an evergreen fund, how together they have sketched out their role plan for the next two decades.
00:18:51
Speaker
Finally, the elephant in the room, what it means to be a risk-bearing entity in the value-based care world and what it does to their bottom line. If you'd like to learn more about digital health, please subscribe to this podcast and feel free to reach out. Take care.