ResMed integrates software solutions

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Friday, May 3, 2019

SAN DIEGO – Now that it has software solutions covering seven verticals in the post-acute care market, ResMed has started to integrate them, CEO Mick Farrell said on a conference call to discuss the company’s financial results for the third quarter of fiscal year 2019.

“We recently transferred leadership of our home health and hospice offerings from Brightree and HEALTHCAREfirst to under the MatrixCare management team,” he said. “That will combine our strength in home health and hospice with private duty and beyond. It will also allow us to accelerate our product innovation and deliver a wide range of features for customers who have businesses across these verticals.”

ResMed entered the software space in 2016 when it bought Brightree for $800 million. It has since acquired a number of software companies, including MatrixCare, which serves the long-term market, and HEALTHCAREfirst, which serves the home health and hospice market, last year.

ResMed reported that revenues for its SaaS business in the U.S., Canada and Latin America increased to $79.9 million in the third quarter compared to the same period last year, a 101% increase, driven by continued growth in Brightree’s service offerings and incremental contributions from MatrixCare and HEALTHCAREfirst.

“On a pro forma basis, (the SaaS business) was growing in that high single-digit range and we think over time we can optimize that to grow in the low double-digit range on a sustainable basis,” Farrell said.

How does ResMed get there? In addition to combining management, Farrell says digital health, cyber security and cloud-base management capabilities can also be combined across the portfolio. But he says “the real upside” is the synergies for providers and the resulting increase in business that will create.

“There are a number of customers—they may be many thousands of customers in out-of-hospital health care—that operate in multiple verticals,” he said. “They have a skilled nursing facility. They also have a hospice and maybe a home health. And a lot of the (other software) players out there are small or niche and they serve maybe one or maybe two verticals. We are able to have seamless movement of an aging person from care setting to care setting. “

ResMed believes the total addressable market for out-of-hospital software is more than $1.5 billion in the U.S. alone.

“We’ve built the portfolio, now it’s up to our SaaS team to executive and, ultimately, deliver on the promise of this strategy,” Farrell said.

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