SCWORX: An Undervalued Investment Opportunity in Healthcare Tech SaaS Transforms the Business of Hospitals
UNITED STATE, January 16, 2023 /EINPresswire.com/ — SCWORX (Symbol $WORX) is transforming the way hospitals run their operations by providing SaaS solutions that directly impact operational efficiencies and costs. Its proprietary software allows hospitals to use existing systems to build a single source of truth for their data, enabling better decision-making and reductions in product costs. Hospitals are facing financial challenges for a variety of reasons, including rising operating costs, inefficient processes and outdated technology. SCWorx improves data accuracy considerably and provides integration and interoperability which is proven to help hospitals realize greater savings and recapture revenue lost. Over 1,300 hospitals are currently using SCWorx.
SCWORX empowers hospitals with evidence-based and data-driven best practices. Most hospitals don’t have accurate data which causes them to spend excessively. The company’s software improves data accuracy considerably and provides integration and interoperability, which is proven to help hospitals realize greater savings and recapture revenue lost.
SCWORX enables increased efficiency in hospital supply chain operations. Entering a new item into a hospital’s systems is cumbersome and fraught with errors The company’s maintains aMaster List of hospital items, with over 12,000,000 items and 250 attributes collected, which allows hospitals to simply enter the SKU and their systems populate with the information from SCWORX’s database. This automated process eliminates hospital administration redundancy, provides greater product visibility, and facilitates the easy sharing of information. This solution is far quicker than the current error prone manual entry while ensuring accurate data.
SCWORX delivers on the promises of the HITECH Act by making EPIC smart and interoperable. No trend has been more consequential to healthcare than its adoption of technology. In 2009, the HITECH Act set in motion the adoption of technology to collect and exchange data about patient care from every touchpoint. In short, it forced EMRs to become accessible to and used by providers and patients. The EPIC system is used by hospitals to access, organize, store and share EMR.
Epic holds information on a per patient basis. The problem is, they need to tie the patient to the utilization whether it’s a procedure or an office visit or whatever. There can be a hundred different locations within a hospital for utilization. Hospitals need to be able to tie all to one source. You can’t tie it back in one system to a person’s name, another system to the product, another to the insurance. EPIC creates a patient ID where everything ties back. The problem with that is it only ties back to a central point of utilization. It doesn’t tie back to supply and it doesn’t tie back to the general ledger. It doesn’t tie to reimbursements or rebates or anything else. When the Act came in to digitize health records, that was the main goal and till now it has failed horribly. SCWorx solves this problem.
There is a significant amount of slippage and inefficiencies from supply chain, over purchasing and lost charges. Each disparate hospital system has its own code. Supply has its code. The patient has their code and finance theirs as does the operating room and the cath lab because they’re separate as well. There is an overwhelming amount of actionable data that is being lost due to not being able to look at it in totality or with confidence that it is accurate. SCWorx improves the flow of information quickly and accurately between the existing systems allowing for supply chain cost reductions, decreased A/R aging, accelerated and more accurate billing. Individual clients of SCWorx have reported saving over $3 million dollars in annual cost savings and revenue capture.
Benchmarking hospital supply chain costs is achievable with SCWORX. Having the ability to perform spend comparisons is essential to reducing costs yet is very hard to perform without corresponding data. SCWorx Solution is uniquely positioned to provide benchmarking to compare a hospital’s spend to similar hospitals. As an example, a small hospital in New Hampshire might pay a different price for supplies than a major center in New York because the spend is that much larger. This ends up causing consolidation in the industry. There may be 15 rural hospitals in the New England area that on a consolidated basis buy through a larger Hospital for better pricing. The large hospital in an effort to take advantage of its new economies of scale may want to compare its spend to an even larger hospital in the Northeast. SCWorx solution allows the New England hospital the ability to compare the two entities and finds their costs to the comparable hospital are 20% higher on certain products. Once identified, the hospital can renegotiate its contract pricing. Contract renegotiation based on benchmarking can save a hospital upward of 20%.
SCWORX is potential undervalued investment opportunity with a scalable business model, no debt and one of the largest databases in the market that has few players and none that can solve the problems as effectively or at the price point.. The company has been developing SaaS solutions for the healthcare sector for over a decade and is currently trading at around 1X ARR. However, the customary valuation metric for healthcare SaaS companies is between 7X-14X ARR, which suggests that SCWORX is significantly undervalued.
Many Healthcare tech companies became household names in 2022 such as Teledoc and the post-pandemic prospects are still strong for health tech thanks to demand from individuals, hospitals and government looking to control healthcare costs.
The above analysis meets the criteria for portfolio inclusion in 2023. Microcap investing can involve significant risk due to low trading volume and lack of coverage however, there is the potential for outsized gains.
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Philip Beer
LIONSEEKER
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