Paul Ricci is interim chairman and CEO of SOC Telemed of Reston, VA.
Tell me about yourself and the company.
I’ve been the chairman and CEO of SOC for about six months. Before that, I was the chairman and CEO of Nuance for about two decades. What brought me to SOC was the opportunity to accelerate the participation of the company in the exciting area of telemedicine and virtual care.
Telehealth usage skyrocketed, then tapered back off. What is driving its adoption?
COVID was an accelerant to a trend that was already underway, which was to take advantage of the efficiencies that virtual care and telemedicine offer for ensuring that we are matching patients with the best available healthcare that they can receive, independent of geographic proximity. We are focused on that in the acute setting, but it applies more broadly than that in the ambulatory, post-acute, and home settings as well.
What are the technology implications?
We serve the acute telemedicine market, so the consultations are taking place under high-acuity situations, such as a stroke victim in the emergency room or an emergency psychiatric visit. These tend to be high-acuity events. There needs to be a telemedicine specialist available with high predictability and with the requisite skills necessary to manage the consultation and provide quality care. In the case of a stroke victim in neurology, you would need to have a stroke neurologist specialist available.
The technology that is required to do that efficiently must rapidly access an appropriate specialist who is licensed in the state, privileged at the particular hospital, and with the requisite skills. That specialist has to be made available within a few minutes, with a high degree of confidence. The software and operational requirements to do that are quite demanding. It’s not really about the video link. The video link is the enabling transport mechanism for information. But it’s really about the software that fractionalizes and makes physicians available efficiently under these high-stress conditions.
Is it easier to address licensure issues since you serve specific clients in their specific locations?
You do have to address the problem of the appropriate licenses and privileging before the service goes live. But that is a significant challenge, and doing it 50 states compounds that problem. Building this kind of business at national scale is a complex operational task. That’s part of the value that we deliver to the hospitals we serve.
We’re starting to see telehealth services differentiate themselves, some offering clinical expertise and others just a platform, while some focus on remote monitoring or ongoing behavioral services versus low-urgency, episodic encounters. Are health systems offering new services through your services or are they augmenting what they were already doing?
There will be a heterogeneity of outcomes to the question you’re asking. Some hospitals will want significant coverage from a telemedicine solution, perhaps in entirely covering particular shifts or times. Other hospitals will want simply peak load support augmentation in addition to the existing resources they have, which might be their own resources or a third-party physician network. That mixture will evolve over time for a variety of reasons having to do with unpredicted scarcity, retirements, and peak demands that might occur because of prevailing illnesses.
For us, we have built our business to be fluid with respect to that. Our software platform is agnostic to the source of the physicians, whether it’s our telespecialists, the hospital’s telespecialists, or the telespecialists they have contracted from someone else. Our platform is agnostic to that and meant to optimize under those heterogeneous circumstances.
How does the telepsychiatry service work with health system emergency departments?
Emergency rooms and hospital systems become backed up with patients who require psychiatric attention. There are strict protocols about how that has to be managed, and the capabilities and expertise necessary may not be available in the emergency room and may not be available through local staffing support. The backlogs within some facilities can become quite long, more than 24 hours, for example. Using telespecialists, we can help that facility significantly reduce their backlog, which is beneficial to the patient and beneficial to the facility as well.
What expectations have investors built into the high valuation of telehealth companies?
The market is anticipating that telemedicine is going to play a more significant role and that virtual care generally is going to play a more significant role in the delivery of healthcare services. As we look ahead five, 10, or 20 years, I think that is directionally correct. These companies, including ours, are being evaluated as having a significant growth opportunities within that growing market opportunity for the virtual provisioning of healthcare services, which has a number of benefits. It eliminates geographical inefficiencies and geographical restrictions. It allows optimizing the provisioning of very expensive scarce resources. It enables more data and analytics behind the delivery of the service, which over time will help to optimize service.
Can you describe the benefit of going public via a special purpose acquisition company or SPAC as SOC Telemed is doing versus the traditional IPO?
A SPAC is the merger of an operating organization, in this case SOC, into an investment company, in this case Healthcare Merger Corporation. By merging, the operating company SOC effectively ultimately goes public. That final event occurs, in our case, in a few days.
The advantages of doing that were twofold. One, the Healthcare Merger Corporation came with leadership with deep skills in the healthcare field. In particular, the CEO of Healthcare Merger Corporation, Steve Shulman, has a long history in the healthcare industry and is going to become the chairman of SOC.
It also brought a second benefit, which was that in a relatively short period of time — we announced the merger in July and will be consummating the transaction at the end of October — it allows access to capital, and SOC needed access to capital to prosecute the growth opportunities that are available for it in the market. Management expertise and capital for growth are really the advantages.
What lessons did you learn in your long career with Nuance?
There were lots of lessons over 18 years of Nuance. But the ones that in the end mattered the most were that if you have a big vision, stay focused on that vision and the mission of what that vision entails, assemble a great team, and pursue it with urgency and speed, you can get a great deal done. That’s really the story of Nuance.
We didn’t know when we started all the various avenues that would become available to us, but we worked incredibly hard. We took nothing for granted. We had a team that worked with a great deal of solidarity. We had an expansive vision about the ways in which speech and natural language could change the ways people engaged with information systems. All of that came together. We had a little luck along the way, of course, and in doing it, we affected some significant changes and built a great company with terrific associates.
Where do you see the SOC Telemed moving in the next few years?
SOC will be the leading provider of acute telemedicine services. The prediction that as much as 20 or 30% of acute healthcare can be done through virtual care and telemedicine is probably reasonable. Therefore, it’s an expansive opportunity.
The company will continue to build deep expertise in its existing specialties of neurology, psychiatry, and critical care, but it will grow and it expand into other specialties as well. It will increase the technological content of its solution, perhaps through the incorporation of more predictive analytics, incorporation of some AI capabilities, more sophisticated workflow, and integration into other aspects of clinical technology systems. All of that will continue to evolve over the next five years. SOC Telemed will be a leader and a visionary in doing that for acute settings.
Do you have any final thoughts?
The virtualization of healthcare is going to represent a significant opportunity for making healthcare more efficient and improving the quality of outcomes. SOC is proud to be a part of that because it will be a significant move toward the increased digitalization of healthcare.