CARETEQ (ASX:CTQ) announces partnership with StrongRoom AI

CARETEQ Limited (ASX:CTQ) Executive Chairman Mark Simari discusses the company's recent agreement with drug management platform StrongRoom AI and the transition from paper-based to digital record keeping within the aged care and assistive living sector.

Tim McGowen: We're talking to Mark Simari, who is the Executive Chairman of CARETEQ (ASX:CTQ). Now, CARETEQ, if you don't know, is an Australian company with a focus on delivering best-in-class technology solutions for health and aged care for a global audience. CARETEQ has developed a comprehensive SaaS-based solution, and is an early mover in the rapidly growing assisted living technology sector. It's got an ASX code of CTQ. It was only listed back in January this year, and has a market cap of $12 million. Mark, welcome back. Thanks for your time.

Mark Simari: Yeah. Thank you, Tim. Thank you for having me.

Tim McGowen: Now, Mark, just a first question — what problem will your exclusive partnership with StrongRoom AI solve, and how will it work?

Mark Simari: The world of aged care historically has been a paper-based operation, and the government has put some initiatives in place to help them transition to a digitalised environment, and so to get that productivity benefits, increased compliance regime. And so we're excited to be a partner to that model. We operate with a number of aged care facilities through medication management adherence. And so this is just a beautiful dovetail for that offering.

Tim McGowen: And who are StrongRoom AI, by the way?

Mark Simari: So, they're an Australian-based medical technology company backed by several local and overseas investors. And their focus is on pharmacy and medication management adherence using AI technology. They've been around for a few years, and now we're partnering with one component of their business. They have a number of components that supply pharmacy and hospital, pharmacies within hospitals and so forth.

Tim McGowen: And how big is this opportunity and how quickly are aged care facilities of moving away from paper-based to a digital system?

Mark Simari: Yeah, so there's approximately 200,000 in excess of facilities… Sorry, residential aged care places out there spread across just over 2,500 facilities across Australia. The government's provided about $30 million of funding between now and 2024 to roll out the initiative. And so we'll be working closely with not only our existing clients, but the wider market to help them transition and migrate across to the electronic medication management regime that the government's pushing. It makes a hell of a lot of sense that the funding model will fast track the integration and adoption for the sector. They're already doing it tough with tight labour markets and increased compliance. And so going from a paper based to a digital environment is going to create productivity benefits for them. And so, as I said, we're pretty excited to be partners, not only through StrongRoom, but to our existing clients and future clients to deliver a solution like this because that productivity's going to help them a lot during this climate.

Tim McGowen: Mark, and can you talk through the level of government support for these sort of initiatives?

Mark Simari: Yeah. So, the initial funding is approximately $30 million to incentivise them to go from paper-based to digital record-keeping. And then there's an additional work being done. There's a government discussion going through what's called an embedded pharmacy model. And so one of the key cornerstones of that, which is approximately they're talking about 350 to 400 million of government funding in addition to this 30 million initiative to help… So it's all to do with increasing the levels of care and using technology to deliver that within the sector. And so that embedded pharmacy model, although it's not fine tuned 100 per cent yet, where they're heading is having either through localised 24/7 or through telehealth platforms a pharmacy on call, and improving that whole medication management regime. And one of the key planks of getting access to that funding whenever that's formalised is they have to have the electronic medication management system in place to access that funding. And so that helps us from an access point to the market for the early adopters in the industry. We're one of probably four to five accredited platforms for this solution. And so, given the level of aged care facilities out there, there's plenty for everyone to eat.

Tim McGowen: Drug management is one service that available on the CARETEQ platform. What else does the platform offer?

Mark Simari: So, we've got some key verticals and offerings that we focus on. So, falls detection is very high priority for us, and that's both for aged care and the home care and disability markets. Medication management adherence, which we've already spoken about, activity monitoring and vital signs are the other two key planks. And, effectively, we continually look at additional solutions to bring into our platform that solves the problems of the industry. So, we look for best in class. If we can't find it, then we'll create it ourselves. So, we do have a partnership with RMIT where we're investigating different innovative solutions that we can help with the market to solve problems, but as it sits today, they're the key planks of our offering.

Tim McGowen: Is this sort of sector, the aged care and disability sector, is it ripe for tech disruption and what are some of the reasons for this?

Mark Simari: Historically, as a sector, there's been a massive underspend, mainly because they've been focusing on providing care, and hence the paper-based for medication management, and a lot of their other practices could use technology, such as falls detection technology rather than have a nurse go around, continually doing circles in a facility and visiting room by room. And most of this has been driven post the Royal Commission into aged care, which there was a host of recommendations and funding provided over a five-year journey to implement these technical or technology solutions. And so the landscape's never been better for a company such as ours and our competitors to provide those solutions to the marketplace.

Tim McGowen: And looking ahead, Mark, what can investors expect from CARETEQ over the next six to 12 months?

Mark Simari: One of our frustrations is every opportunity has its small hurdles. And so, because of the legislative change and the regime that's going through at the moment of funding models and structures within aged care, and COVID has added to this a little bit as well, is decision-making has been a little bit slower than historical. But we're highly enthused and excited by the levels of our pipeline. If you look at our FY22 results presentation, you'll see that there's some real meat on the bone from a pipeline point of view. And so, over the next six to 12 months, we're really excited to start delivering on that pipeline to what we'll call real revenues. Most of those are opportunities. We're living in the land of trials, demonstrations and discussions. And so, over the next six to 12 months, we're really looking forward to delivering on that. The one thing that keeps us enthused every day is everyone we talk to, we never get told, "Not interested, don't have time for you," and so forth. Everything we're offering to the marketplace is a hot topic that they're looking to solve. It's just their decision-making process is slowed down.

Tim McGowen: Mark, always good to talk to you. Thanks for the update.

Source: Finance News Network