So I got to the PainChek table just before lunch and found GC deep in conversation with David. And GC, those eyelashes, they are stuff of legend, I'm pretty sure David did actually give you his PIN!
We covered a wide range of topics and I found David to be very competent, well spoken and confident in the company and its staff. I think it was fatt or kenji who said this is a spec that feels like a blue chip and I completely agree. I am very comfortable being over exposed to PCK in my portfolio at this stage.
Getting a demo of the app was terrific. It's a weighted series of components starting with a short video that is interpreted by the AI tech, then moving to a series of tick and flick questions about the persons demeanour, their physical appearance, presence of wounds or sores, are they groaning or moaning and so on. I think there are about 40 data points plus the face scan which is boiled down into a score out of twenty which is then defined into five groups from no pain to severe pain.
This score is recorded and time stamped and can be charted to monitor the effectiveness of medication. The app works on the sleeping, unconscious and the non cognitive - also the fully functional but not as well and you can fake it. If you let the app work, it will work just fine but for now the focus is where it works best, the non cognitive. Any skepticism I had about the app was tempered by a demo, it's well thought out, easy to use and it works.
The company is keeping a very tight lid on costs and is keen to get cash flow positive. The hope is in 2020. David hoped we wouldn't need another CR. On the topic of CR GC and I spoke about how we liked how tightly held the stock was and the genuine interest by holders in the well-being of the company. David said instos had been sniffing around but had not bought in yet. He didn't rule in or out a placement in the future but took on board that retail holders would like to be offered to buy in.
The company does offer discounts on the app depending on contract lengths, and GC mentioned they prefer a 36 month sign up. Margins are very fat on the service however they are paying Ward and other companies to assist in the roll out which does erode them slightly.
The government grant was a little hairy over the election period and the cabinet reshuffle with Ken Wyatt handing it to Richard Colbeck. The staff in the office were not as familiar with the grant announcement as David would have hoped and Richard had to be brought up to speed entirely. It's being rolled out now so it's safely in hand.
I asked about the company's view on having the device added to the PBS and/or included in the NHS. David dead batted my queries, I think largely because it's so far down the track than not being a goal. In the future he sees the app becoming a standard tool used by doctors in any physical exam, and my opinion by extension into pharmacies and similar.
He spoke for some time on the stickiness of users. GC cheekily suggested that as the average contract length was three years and the app has only been available for about a year no one was out of contract yet! But the point was well made, once the app is integrated into the systems and used by staff and data charted, stopping using it would be nearly unthinkable.
I asked him if he thought $5 was cheap, my reasoning being that a sticky product was less susceptible to price increases. But he had concerns that currently a pain assessment is free, just taking the time of a clinician so asking RACs, that in most instances are loss making, to shell out extra for something that is currently free needs to be keenly priced. I was a bit surprised as I thought the logic of saving time with faster assessments and potentially saving money on medications would be easy to see, let alone a better outcome for the patient. But the cost of PainChek is a serious consideration.
They are currently collecting data on savings from removing the over prescribing drugs in order to make a financial argument for using PainChek.
This post is getting too long! But I'll finish up with NZ. There are only six major players in NZ aged care, the largest is significantly larger than the largest player in Aus. In that regard the approach to NZ is far more simple and as the trials turn to contracts there they will update us. It's not a matter of if there, it's when.
Thanks to David for his open and forthright answers to our queries, it gives a great deal of confidence.
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