WELL Health Technologies Becomes World’s First Billion-dollar Open Source EMR Company

Roger A. MaduroCanadian start-up company WELL Health Technologies (WELL) just crossed the threshold a month ago to become the world’s first billion-dollar open source electronic medical records (EMR) company. WELL, based in Vancouver, British Columbia, has accomplished this milestone less than three years after its founding. WELL’s market cap is currently hovering between $1.2 and $1.3 billion. The company has developed a disruptive digital health platform model with an open source EMR core, and a firm focus on improving clinical outcomes by using the technology to assist physicians and patients focus on health and wellness. Its goal is to shift the industry from a highly fragmented and expensive sick-care system to a health care system.

WELL underlines its core values and guiding principles very succinctly. The company's value statement reads:

At WELL, we see an opportunity to modernize and improve primary healthcare by implementing cutting edge digital technology to alleviate the challenges faced by patients and healthcare workers. Currently the Canadian primary healthcare industry is under-imagined and under-digitized. We intend to change that by investing in our people, our technology, and our facilities. Our vision of healthcare is patient centric and physician focused. We want to be the best place for physicians to work, and the most convenient place for patients to receive care.

We envision a system where treatment is not just reactive, but proactive. A system where patients have greater access to services, and where physicians are free to focus on doing what they do best: caring for their patients. With the largest single chain of primary health clinics in British Columbia, we aim to become an example for enhanced primary healthcare, and to share our successes with services beyond our network.

This is a complicated story to tell as it has many facets. WELL is building a fully integrated ecosystem that includes not only an advanced and capable interoperable EMR together with an entire network of clinics with physicians engaged in improving the EMR. WELL is also building an app marketplace that has an entire array of add-ons that range from telehealth, to patient health records, to eReferrals. All integrated through the open source EMR. In order to properly tell the story, we plan to write a series of articles that will explain the different components of the WELL ecosystem. WELL has grown very fast from the two original divisions, the clinical division, and the digital health division. It currently has five business divisions and these are all growing at an exponential rate.

And this is an important story to tell, as WELL validates the concept that the solution to a fragmented and dysfunctional health care system is through the adoption of an open health philosophy, open platforms, and open technologies. It is also a model that can be emulated by other open source EMR/EHR companies.

First some background information. WELL was founded by Hamed Shahbazi, a seasoned start up founder whose previous venture, TIO Networks, was acquired by PayPal for $233 million in July 2017. WELL is the next venture. Shahbazi, who is the CEO and a principal investor, founded WELL together with many of the members of the TIO Networks team. WELL was initially listed in the Toronto Stock Exchange (TSX) as part of their Venture Exchange (TSX-V) that serves as a public venture capital marketplace for emerging companies. WELL graduated to the big leagues, the TSX, on January 10. WELL stock trades under the symbol TSX:WELL. WELL was recognized as a TSX Venture 50 Company three years in a row in 2018, 2019 and 2020.

WELL Health Technologies rings the opening bell at the Toronto Stock Exchange to celebrate graduating to the big board on Friday, January 10, 2020.Interestingly the famous Hong Kong investor Li Ka-shing was an early investor in WELL, participating their initial investment round in May 2018. Ka-shing, one of the world’s wealthiest men, is a major investor in the life sciences sector and owns the largest pharmacy chain in South-East Asia. Like Shahbazi, Ka-shing, is a believer in the use of open digital health technologies to improve medicine and wellness. Ka-shing has participated in all of WELL’s investment rounds. It is very unusual for Ka-shing and his investment firms to participate in initial investment rounds for start up companies like WELL. That Li Ka-shing has demonstrated such a level of interest, as well as hands-on participation in WELL, is by itself validation of the potential of WELL Health Technologies.

WELL’s Open Health Ecosystem

WELL has an aggressive acquisition strategy and in addition has been evolving into a company with multiple business lines that now includes a digital health applications marketplace. WELL has developed a five step strategy. The steps are: acquire, integrate, optimize, productize, and scale. We will examine those steps in detail in a future article.

Below is an outline of the key facets of their major lines of business. WELL already has multiple lines of revenue with total revenues this year expected to come close to $50 million.

WELL’s Electronic Medical Record System

WELL has standardized on an open digital health platform based on OSCAR EMR. OSCAR is an acronym for "Open Source Clinical Application Resource,” an open-source electronic medical records (EMR) system developed by Dr. David Chan and McMaster University's Department of Family Medicine in 2001 to inspire collaboration between the wide spectrum of health professionals with the goal to drive downstream benefits to patient care. Since then thousands of developers have contributed to the continuing development of OSCAR EMR and many companies formed to implement and support the EMR in clinics and physician offices across Canada. OSCAR EMR has been widely adopted by a wide range of medical facilities throughout the country. More than 20% of Canada’s clinics are currently using OSCAR EMR.

Over the past two-and-a-half years WELL acquired the seven largest OSCAR EMR service providers in Canada. They collectively serve a total of nearly 2,000 clinics, almost 12,000 physicians, and close to 18 million registered patients. All of the OSCAR EMR companies and technologies acquired by WELL have been folded into the WELL EMR Group. That makes WELL the third largest EMR provider in Canada.

WELL has worked hard to retain all management and employees of these companies and fold them into their operations. In addition WELL is merging all the advanced features, technologies, and capabilities developed by each individual company into the more capable and extensive OSCAR Pro EMR. OSCAR Pro is a Software as a Service (SaaS) cloud-based platform.

WELL has developed a close collaborative relationship with the McMaster OSCAR EMR team and has taken key responsibilities in the continuing support and development of the open source EMR. In May WELL and McMaster University's Department of Family Medicine announced a strategic alliance that will allow them to "collaborate on initiatives that leverage OSCAR in ways that strengthen their shared commitment to ethical, innovative leadership in health and society."

"We are delighted to partner with WELL for digital health innovation in collaboration with clinicians and patients that delivers positive health and social impact," said Dr. David Price, Professor and Chair of McMaster's Department of Family Medicine. "WELL's commitment to quality, security, innovation and ethical stewardship of data, along with their capacity to scale new initiatives nationally, will offer great benefits to clinicians, patients and our health system for years to come. McMaster looks forward to continuing our leadership in digital health, patient-focused care and enabling system transformation in this strategic alliance."

This recent announement builds upon the existing collaborative relationship. Last year WELL announced the launching of a professional edition of OSCAR EMR. That edition is now called OSCAR Pro. At the same time WELL announced the launching of a WELL EMR division. In that announcement Shahbazi outlined that one of the key missions WELL had when entering healthcare was to break down the siloed approach that has hindered the ability for care to be delivered efficiently. He said that “by introducing a single nationwide group for our EMR initiatives, we want to elevate our efforts to drive enhanced innovation and security for doctors on our platform without the constraints of managing multiple regional brands, teams and code bases.” Shahbazi emphasized that WELL’s “focus with this approach will be to continue to consolidate and defragment healthcare IT challenges.”

The WELL Health Medical Clinics

One of the foundational elements of WELL’s strategy has been to make investments into medical clinics through partnerships as well as ownership. The company owns 20 primary care clinics in the province of British Columbia, and has acquired a majority ownership stake in four other clinics in Canada. Recently WELL acquired two brick-and-mortar clinics in San Francisco as part of their Circle Medical acquisition (more below). The primary care clinics operate as part of WELL’s own primary care business division, the WELL Health Medical Clinics network. This is the largest chain of primary health care clinics in the province of British Columbia.

The staff at these clinics, from medical personnel to administrative staff, are heavily involved in working with the WELL EMR division in the continuing improvement and development of OSCAR Pro as well as additional technologies such as telemedicine and personal health records software. In addition WELL has been making significant investments in EMR usability and is leveraging help from their staff members in improving the user experience (UX) of OSCAR Pro by physicians, patients, and administrative personnel. 

More recently WELL formed a new subsidiary company, the WELL Health Allied Clinics, that is primarily focused on “operating, investing in and/or unlocking opportunities” associated with integrative medicine clinics and holistic health practices such as physiotherapy, rehabilitation, occupational therapy, chiropractic, nutrition, mental health counseling and sleep related services. According to the announcement, WELL Allied “will include health practitioners working in a collaborative environment to support primary care physicians in a multi-disciplinary, team-based care support model.”

In the announcement Shahbazi emphasized that the overarching goal of WELL Allied is to empower “allied health” professionals “with leading edge digital tools that allow them to advance their businesses and provide patients with the very best integrated care possible.” According to Shahbazi this is an opportunity for WELL to not only grow as a company but also “improve continuity of care and positively impact health outcomes.”

WELL’s VirtualClinic+Telemedicine Platform

In early March WELL launched its telehealth platform and service for Canadians. WELL’s VirtualClinic+ is a digital health communications platform that connects patients to physicians through video, phone and secure messaging. VirtualClinic+ supports both longitudinal care with family practice visits. The launch of VirtualClinic+ came at the time that the COVID-19 outbreak was emerging. It offered Canadians an alternative to lengthy waiting room visits in brick and mortar medical clinics. VirtualClinic+ allows patients to schedule an appointment online and connect directly with a physician on their phone, tablet, or computer without the need to download or configure an app. VirtualClinic+ is fully integrated with the OSCAR Pro EMR system to ensure a seamless experience for physicians offering telehealth.

WELL Health management team. From left to right-Amir Javidan COO, Eva Fong CFO, Hamed Shahbazi CEO, Chris Ericksen SVP Marketing & Strategic Partnerships, Brian Levinkind SVP Corporate Development.WELL’s product development and clinic transformation teams worked internally over a period of several months with the WELL EMR Group as well as WELL’s external technology service providers to develop VirtualClinic+. At the time of the public announcement WELL had already successfully on-boarded physicians in multiple corporate owned and operated clinics that utilize OSCAR EMR. In sum it had already deployed the VirtualClinic+ telehealth platform to all of its 20 corporate owned clinics in British Columbia and on-boarded the substantial majority of doctors that work in these WELL clinics to use the telemedicine app. In a matter of days following the announcement WELL on-boarded hundreds more healthcare providers from both the provinces of British Columbia and Ontario from its OSCAR EMR network of clinics and their healthcare practitioners. There are now more than 1,000 clinics across Canada using VirtualClinic+.

The speed at which WELL was able to roll out this application in the face of a global pandemic crisis demonstrates the wisdom of having physicians and clinic staff involved in the development of innovative applications and enhancements to the open source EMR. It is a unique advantage of the open digital health platform model that WELL has developed.

The Digital Health Apps Marketplace

Selecting the right technology solution for a healthcare clinic can be an overwhelming experience for healthcare providers. To address these challenges and accelerate adoption of open digital health technologies WELL launched a digital health apps marketplace on September 29. Called apps.health it is a digital health app marketplace and innovation hub that connects digital health technology companies and software developers to WELL’s network of clinics and physicians.

apps.health provides a single destination where practitioners and healthcare providers can discover digital tools and applications that have been reviewed and curated by WELL staff to ensure meaningful clinical value and effectiveness. The applications and software solutions available on apps.health tightly integrate with the OSCAR Pro EMR. The solutions are highly integrative and have undergone rigorous testing by third party developers. It is a major channel for third party application developers who want to market their solutions to WELL's growing network. The apps.health developer program provides assistance to third party developers to integrate their applications to OSCAR Pro EMR, and this assistance will be extended to other EMR solutions in the future.

"To our knowledge apps.health is the first comprehensive offering of a digital health marketplace for EMR integrated apps in Canada that allow digital health software and technology companies to showcase their capabilities and provide a call to action," Shahbazi pointed out. He added “Our objective with apps.health is to provide an environment where clinicians and app publishers can meet and transparently discover opportunities to modernize and digitize practices across the country."

The apps.health marketplace already features 12 partners including Insig, Phelix.ai, the Ocean Platform by CognisantMD, Cliniconex, Auxita, Excelleris a division of LifeLabs, Veribook, Empower Health, CHIME Technology Inc., Health Data Coalition, and McMaster University Department of Family Medicine. The marketplace is currently offering 20 applications. WELL is looking to quickly add more app publishers in the coming weeks and months with the goal to triple the number of apps provided on the marketplace by mid-2021.

On the Acquisition of Circle Medical A Leading Telehealth Provider in the U.S.

WELL’s latest acquisition is Circle Medical, a national U.S. telehealth provider that delivers virtual primary healthcare services in 35 states. Circle Medical plans to extend its telehealth services to the majority of the remaining states within the next few months. Circle Medical also owns and operates two California based brick and mortar clinics.

Circle Medical has "payer" agreements with most of the major health insurance carriers in the United states. This allows the company's service to be in-network and accessible to approximately 200 million Americans who can use the patient-centric Circle Medical "app" anytime for either no cost or a small co-pay. Circle Medical can play a critical role of supporting WELL’s entrance into the U.S. market. Li Ka-shing invested an additional $23 million in WELL to support this transaction and WELL’s entry into the U.S. market.

WELL’s Cycura Cybersecurity group

Last but certainly not least, WELL announced on August 4, that it had acquired Cycura, Inc., a leading Canadian cybersecurity company that provides top-tier cyber security services. According to Shahbazi, the purchase of the cybersecurity company is a critical component of WELL’s digital health ecosystem strategy. Shahbazi stated that “WELL is committed to providing cyber security protection and patient data privacy across all of its businesses including primary care, Electronic Medical Record (EMR), telehealth and digital health solutions.”

As with its other acquisitions, WELL retained the key employees and management of Cycura, and created a new subdivision of WELL that provides cyber security protection and patient data privacy solutions across all of the Company's business units including WELL Health Clinic Network, WELL EMR Group and WELL Digital Health Apps. WELL had already been working with the team of experts at Cycura for more than a year before the acquisition.

Cycura has continued to serve its existing customers across a broad array of industries, including healthcare clients focusing on mental health, telemedicine, health insurance and benefits. It provides cybersecurity services including penetration and vulnerability testing, security focused code reviews, incident response services, cybersecurity training, cybersecurity M&A advisory and technical due diligence services. Earlier this year Cycura completed technical security assessments on medical devices used across Canada in both acute care and long-term care settings.

One-year chart of WELL stock valuation on October 29, 2020. Source CantechNext Steps for WELL

According to an article in the Cantech Letter, a news site focused on news related to Canadian technology companies, WELL is going to continue with their aggressive acquisition strategy. In the article Jason McLean reports on a forecast made by David Newman, an analyst for Desjardins, a leading Canadian financial services company. McLean reports that WELL has over $100 million in cash that it can use to acquire other companies. According to the Cantech article, WELL has been looking at more than 100 potential acquisitions. The article states that WELL has already signed "Letters of Intent" with ten companies. Given the extraordinary nature of the companies and businesses that WELL has acquired this year, it will be very interesting to see what additional acquisitions bring to their open health ecosystem. 

The article also discusses WELL's extraordinary business performance. WELL is expected to have close to $50 million in revenues this year. Newman, the Desjardins analyst, is quoted forecasting that WELL's revenues are going to double in 2021 to more that $100 million. These revenues are going to come from a combination of revenues from all of WELL's lines of business.

The Motley Fool has also piped-in their thoughts on WELL's potential. In an article titled Here’s How Much You Could Have Made Buying WELL Health Technologies (TSX:WELL) Stock This Time Last Year author Daniel Da Costa states:

If you had invested $2,500 and held until Wednesday’s close, that $2,500 would be worth more than $13,675. That’s a 447% increase, making it a hotter stock than Shopify. Plus, WELL is just getting started; the company has a market cap of just over $1 billion. That’s pretty small for a top technology company disrupting the Canadian healthcare industry.

The stock price was just $1.37 a year ago. As can be seen on the accompanying chart of WELL's stock performance for the past year, the stock price has seen exponential growth. The Motley Fool's article continues:

WELL has done a lot of impressive work to grow shareholder value since last November. Last year it was all about building up its business. WELL was a growing healthcare company with physical clinics and a digital technology business. This was crucial and helped to build the company. It was important because the physical business was delivering cash flow for WELL. Then that cash could be recycled into growing the high-potential digital business.

It was also important for the company to prove it could grow by acquisition. And well has done just that proving it can easily grow its revenue and business, which it’s done each quarter for the last six quarters. Its growth has been impressive, which has undoubtedly led to a lot of WELL’s impressive stock price performance. However, growth investors are also betting that over the long term, WELL can continue to disrupt the Canadian healthcare industry.

The Canadian healthcare industry is one of the best in the world. While doctors and surgeons have the best of the best technology, what Canada has always lacked is a universal digital side of the healthcare industry. This includes storing electronic medical records online. WELL has already showed how important this digital technology is. And now, with the pandemic providing a major tailwind for the company, its growth could continue to explode.

One of the business divisions with the greatest potential for growth is WELL's digital health marketplace group. As noted above, WELL is working on increasing the number of health apps offered in their apps.health marketplace to more than 60 by mid-2021. This digital marketplace could play a critical role in WELL's entry into the U.S. market.

There are some significant wild cards that apps.health could bring to the table. There already are thousands of companies in the U.S. that support open source EMRs and electronic health record (EHR) systems, as well as many companies focused on adding interoperability capabilities to the legacy medical billing EMRs that currently dominate the fragmented U.S. healthcare system. 

These open source EMRs and EHRs include VistA, the open source EHR that runs the medical facilities operated by the Veterans Health Administration (VHA), the largest healthcare system in the U.S. Derivatives of VistA include the open source RPMS EHR which runs the medical facilities of the Indian Health Service (IHS), as well as the CHCS EHR that is used by the Military Health System's medical facilities in the U.S. as well as globally. 

In addition there are a large number of developers, companies, and communities that implement and support other open source health IT solutions such as OpenEMR, OpenEHR, OpenMRS/LibreHealth, and many others. The developers of all these open source applications can facilitate the entry of WELL into the U.S. market in many ways. In addition these mostly small companies have developed a whole array of very capable applications and technologies that could become part of WELL's digital health marketplace.

One of the major factors that has held these innovative companies back is the lack of marketing. WELL excels at marketing and their digital health marketplace is specifically designed to work with companies that have the best applications and vet these apps before they join the marketplace. A key part of the apps.health marketplace is to enable physicians and clinics to pick applications and add ons that have been preselected and vetted and are fully integrated into OSCAR EMR. WELL does have future plans to port the apps.health marketplace applications to work on other EMRs.

The other element of the story is the security of these apps. Part of the reason for acquiring Cycura, the cybersecurity company, was to enable WELL to ensure that all apps coming into the digital health marketplace are secure. One of the key recurring themes from Shahbazi's public presentations has been his iron-clad commitment to protecting the operational integrity of clinics and physician offices, as well as the privacy of patient medical records. WELL's commitment to privacy and security is not just as part of the open source OSCAR EMR platform, but across all applications that connect to their OSCAR Pro core. 

It is almost as if the U.S. health IT market is primed for the arrival of a company with a disruptive business model that can leverage and absorb the capabilities of all these small, and innovative companies, into an open digital health marketplace.

How WELL enters the U.S. market remains to be seen. That said, as we outline in this article, the success of WELL has enormous implications for the potential of open source companies and solutions in the health care market. Open source communities, projects, and companies have been working hard on developing business models that allow them to scale their open health solutions. WELL has demonstrated that companies with open source solutions in health IT can lead to a very successful business while at the same time doing community work and providing quality medical care and wellness solutions.

Note: This article was updated on October 29 to include content from the articles in the Motley Fool and the Cantech Letter (see the final section).