Dive Brief:
- HealthSpot, a company that offered telemedicine kiosks for retail and workplace locations, has filed for Chapter 7 bankruptcy due to insufficient cash flow, company attorney David Whittaker told Columbia Business First.
- The company reported $1.1 million in revenue over the past three years, with $600,000 from 2015.
- The company board authorized CEO Steve Cashman to file either Chapter 7 bankruptcy liquidation, or a Chapter 11 to reorganize while repaying creditors in mid-December. Cashman and board members resigned shortly thereafter.
Dive Insight:
The bankruptcy filing showed it had $5.2 million in assets and $23.3 million in liabilities. The company had raised more than $23 million, plus an undisclosed investment from Xerox. The latest financing round was announced in November 2014.
HealthSpot had 190 booths built, with 54 operating at locations such as Rite Aid and Marc's pharmacies in northern Ohio, which have now been shut down.
"There were some positive events in the operation of the business, but the company simply did not have enough cash flow to continue to operate and continue to execute on those positive opportunities," David Whittaker, the company attorney for the bankruptcy filing told Columbia Business First.
An analysis by Towers Watson, a global benefits advisor, estimated 37% of employers surveyed in 2014 said by 2015 they expected to offer employees a telemedicine benefit; another 34% are considering telemedicine for 2016 or 2017. In addition, telemedicine could provide more than $6 billion a year in healthcare savings to U.S. companies, according to the analysis.
IHS, a global information company, estimates the U.S. healthcare kiosk market will jump from 10,000 in 2015 to more than 36,000 per year by 2020, as reported by HIT Consultant.