OnPoint’s Big-Data Equals Big Opportunity

OnPoint Medical Diagnostics (OTCQB:ONMD) is pioneering a “big-data” platform for delivering measurable, objective and automated quality assurance (QA) solutions for magnetic resonance imaging (MRI), with plans to expand its framework to include other modalities such as computed tomography (CT), ultrasound and mammography.  The company was founded in 2010 to commercialize imaging QA technologies developed by Mayo Clinic, where testing began in 2006.

“We estimate there is a $6 billion global market opportunity for imaging QA and informatics,” president and CEO, William Cavanaugh, says in an interview with BioTuesdays. “Right now, with MRI, our competition is pencil and paper, three-ring binders and the fax machine, so we see this as a blue ocean opportunity.”

A big-data solution objectively measures each individual imaging scan and compares it against an internal standard or an industry benchmark.

Mr. Cavanaugh explains, “In the U.S. alone, there are over 12,000 hospitals and imaging centers performing approximately 600 million procedures and creating close to 1,000,000 terabytes of image data per year.  You can more than double those numbers globally.  Organizing, benchmarking and analyzing the volume of medical images quickly becomes what is known as a big-data problem.”  In addition, these devices come from a variety of manufacturers and have a very wide range of age, strength, capability and quality output.

“Objective measures of image quality do not exist today and even properly calibrated scanners can produce medically useless images,” he points out. “Bringing objective and automated quality measures to imaging devices and procedures will benefit healthcare providers, payors and, most importantly, the patients.”

Mr. Cavanagh says producing a good medical image requires coordination between a radiologist, a scanning device, and a scanning operator or technologist, as well as creating an appropriate set of imaging instructions, which are called protocols.

“Today, the leading medical institutions cannot detect when imaging protocols deviate from their internal radiology standards,” he contends.  “Not only does this jeopardize clinical results, but it also impacts scanner utilization as certain protocols have much longer scan times than others.”  In CT and nuclear medicine, for example, longer scan times can result in more radiation exposure, creating a significant health risk to patients.

Procedure quality is currently managed with three-ring binders, Word documents and spreadsheets, with no means of measuring adherence to the internal quality standards. “Benchmarking procedure quality from the exact same type of scanner, for the exact same type of exam − say a brain MRI, for example − among other imaging providers down the street, in another state or across the ocean is virtually impossible today, so there is a lot of inefficiency” he adds.

In January, consulting giant McKinsey & Co. released a study that suggests the estimated savings to the U.S. health care system would be more than $300 billion a year as a result of using big-data to drive efficiency and quality and more than 100 billion euros in Europe from operational efficiency improvements alone.

“Big-data initiates have the potential to transform health care, as they have revolutionized other industries,” according to the McKinsey study. “In addition to reducing costs, they could save millions of lives and improve patient outcomes.”

Mr. Cavanaugh notes that IBM, SAP, Oracle and Microsoft, among others, are developing big-data platforms for capturing health care information in order to make meaningful use of patient records, as well as for capturing population trends tied to medical claims and pharmaceutical data. “Our focus is on the medical imaging space,” he adds.

While imaging quality control had been voluntary previously, pursuant to federal legislation that became effective on January 1, 2012, freestanding outpatient facilities that bill for certain imaging procedures, including MRI and CT, are now required to obtain quality control accreditation in order to continue receiving Part B Medicare reimbursement

The company’s first product, OnPoint MRI Quality Assurance, is a “software as a service” (SaaS) solution that addresses the growing quality, regulatory and accreditation demands being placed on hospitals and imaging centers. Mr. Cavanaugh says a SaaS subscription model provides a recurring revenue stream and is highly scalable, leading to higher gross margins.

In a research report in January, Zachs Investment Research analyst, Brian Marckx, estimated the total annual domestic MRI quality control market opportunity to approach $250 million, assuming only moderate growth of about 3% over the next few years.

Mr. Cavanaugh says that OnPoint MRI Quality Assurance automates the weekly quality control measures required for accreditation by the American College of Radiology, with real-time dashboards, analytics and trending to ensure that imaging equipment is providing the best possible images for patients.

Launched in February 2012, the OnPoint product is already now being used by 50 hospitals and imaging centers in 20 states, with some 90 scanners sending images to the OnPoint cloud.

In addition to hospitals and imaging centers, insurance companies are now starting to demand performance against defined quality measures and are exposing quality scores to their members, according to Mr. Cavanaugh.  He says, “They want to direct patients to the highest quality, lowest cost providers as it will save health care plans and its members hundreds of millions of dollars.”

He adds that leading medical institutions are just starting to explore technologies to meet their medical imaging QA needs. “Existing solutions are coming up short – they simply were not built to deliver actionable information against internal standards and industry benchmarks.”

A survey conducted in early January 2013, in which more than 50% of OnPoint’s active users responded, found that:

100% of imaging managers agreed that OnPoint provides better information on the health of their scanners and helps them to anticipate potential problems;
100% of the respondents would recommend OnPoint to a colleague;
100% of the respondents found the product easy to use;
And over 96% of the respondents prefer OnPoint’s MRI QA product to their current process.

Mr. Cavanaugh points to a recent study by an independent physicist of more than 500 MRI performance evaluations conducted over 10 years that found that 78% of all MRI scanners have image quality problems and that 25% of all multichannel radiofrequency coils had at least one bad channel.

“The fact of the matter is there are MRIs out there being accredited and reimbursed that probably shouldn’t be scanning any patients,” he contends.

Mr. Cavanaugh says that in November, the company established a strategic partnership with West Physics Consulting, one of the largest medical imaging consulting groups in the country, to deliver OnPoint software to their 1,100 customers in nearly every state.

Under the accord, West Physics will offer OnPoint’s software to all of its current and future customer accreditation-related contracts. “Go-to-market strategies within their installed base are underway,” he adds.

Mr. Cavanaugh says that the medical imaging community will be forced to become more efficient as the macroeconomic forces drive down costs and reimbursements, while at the same time insurance companies and patients will be demanding demonstrable proof of quality.  “OnPoint’s big-data solutions are in the crosshairs of this movement, bringing measurable, objective,  quality control with continuous improvement for medical imaging,” he adds.