Investment Notes: Consultmed

We are excited to announce our most recent investment in the Australian-based healthtech startup Consultmed. Founded by Dr Vikram Palit, paediatrician and senior lecturer in health systems, Consultmed has developed a platform that streamlines the generation, delivery, and tracking of electronic referrals for the Australian healthcare system and is already bringing incredible efficiencies to healthcare providers and patients alike.

Investible is proud to lead the ambitious company’s $1.2m seed funding round, alongside a collective of senior medical leaders and clinicians, some of whom are already users. As I’ll detail in the notes below, Vikram brings a unique lens to this problem, and we believe he (and his growing team) are visionaries who will transform the industry.

Axe the fax

Did you know that 80% of referrals are still sent via fax or post?

Vikram—from firsthand experience—knows this statistic shows a clear gap in the industry. Even before diving into the opportunity (and challenges!) of disrupting a technologically resistant industry, we could see that Consultmed's value proposition would have a rippling benefit on the whole hospital system.

If we simplified and collapsed the hospital value chain, then we see that just by increasing specialist efficiencies correspond to an increase of the number of patients being treated.

In addition, increasing efficiencies leads to an increase in hospital income, allowing hospitals to invest in practices that further benefit patient care. The current referral system can be archaically inefficient. Vikram and his colleagues are often required to travel to their hospitals and specialist clinics to pick up paper referrals, sitting idly on fax machines or in pigeon holes, despite care being provided remotely via telehealth. Many of these paper and hand-written referrals may be left unattended for weeks, despite requiring urgent attention.

The second benefit is traceability. With paper based referrals, the onus is on the health practitioner to fax or deliver the referral, on hospital administration to complete the booking, and then for patients to turn up to their appointment while the referral is valid. With the changing of hands, appointments are missed, hospital resources are wasted on “did not attends”, and patients fall through the cracks.

Did you know hospitals can miss 20% of its billable revenue because of poorly written referrals?

With Consultmed, digital referrals go direct from GPs and other primary healthcare providers (e.g. physiotherapists, nurse practitioners, dieticians), pre-loaded with patient information, direct to hospital administration where it integrates to a hospital’s booking system for it to be directed to the preferred specialist. [Side note: Consultmed works at both a private and public hospital setting, which is significant given the differences in how each of these organisations are structured.] There is full traceability at every level from the tracking of referrals on the cloud, to sending reminders to all parties, and capacity to notate treatment plans to ensure billing is appropriately captured.

You might be thinking, this sounds aspirational, but hospital networks are dinosaurs when it comes to innovation adoption.

A founder uniquely connected to healthcare

The Australian healthcare system is notoriously difficult to break into. It requires a founder with both (1) a deep understanding of the hospital processes and (2) direct access to senior executives in hospitals and their local health districts.

As a practising paediatric specialist, Vikram keeps himself relevant and current in the healthcare system. This doubles as a GTM advantage, as it enables him to maintain relationships and build connections with other specialists and hospital executives. It is also worth noting that he has practised in over a dozen private and public hospitals in both Australia and the UK.

While in the UK, Vikram had first hand experience transitioning from fax based systems to the electronic referral system under NHS England’s digital transformation process. In one hospital, Vikram was tasked with managing the quality improvement budget in which he deployed digital referrals within that local health district.

Still in the UK, Vikram worked in implementing and delivering Saas products within the hospital setting including patient engagement platforms like DrDoctor and digital health technologies such as Care Information Exchange, delivered by PatientsKnowBest. He believes that the Australian referral system is about 10 years behind NHS England. His entrepreneurial spirit was clearly noticeable both from our investment committee and also by other thought leaders in the healthcare sector.

Hospitals are already trying, and buying

With Consultmed having the advantage of being born from within the hospital system, the next difficult step is getting the product to the hospital executives. However, since launching in January 2021, Consultmed has leveraged their deep connections to get in front of hospital executives in NSW, Victoria and South Australia. These conversations have given the team an opportunity to demonstrate how a technology such as Consultmed could positively impact their bottom line. In one hospital network, it took Consultmed 3 months from product launch to PoC; the product is now live in more than 20 departments and on track to expand to all 50 departments across the network.

However, even more difficult is convincing hospital administrative staff to adopt new technology. According to a research article by the RACGP on eReferrals, 72% of clinicians captured in the survey said they would prefer an electronic referral solution. However, only 12% reported to be using eReferrals, the clear majority being fax and post. Ironically, the biggest hurdle was their peers not using the system.

By onboarding hospitals in a top-down approach through the hospital network in tandem with a bottom-up approach through smaller clinics (many doctors who work in smaller clinics also work in specialist hospitals), all peers within a department are brought onto the system, reducing barriers to entry.To give an indication of size, large hospitals have anywhere between 20-50 departments. Among these departments, it is quite common for all departments to be managed by only a few general managers. For Consultmed, this means they can get confidence in onboarding an entire hospital with 50 departments within a matter of months.

Armed with the initial validation of Consultmed’s go-to-market strategy, not only are the team continuing to have conversations with other hospitals and local health districts, but also they have experienced organic growth among hospitals and clinics in surrounding regions. We see this as a positive sign that this business could potentially thrive among this otherwise slow tech adoption industry.

All in all we are excited to back Consultmed as they strive to improve patient outcomes. Digital referrals have the potential to benefit everyone in the hospital value chain, generating wins for hospital executives at the highest level, saving time for hospital administrators, increasing efficiencies in communication between specialists and GPs, and most importantly ensuring that all patients requiring care are seen and treated.

We look forward to supporting Vikram and his team in their mission to axe the fax in hospitals around Australia and beyond.

‍