Market/Business Plan Outline - EDGE



PJ Solutions

Smart Container

For Automated Medication Dispensing

Business Plan

Draft v.1

February, 2005

Executive Summary 4

Product Description 4

Value Proposition 4

Market Opportunity 4

Competition 4

Market Plan 4

How we make money 4

Business Plan 5

Market Description 5

Key user problems/needs 5

Key market trends 6

Key market assumptions 6

Segmentation and size 6

Offering Description 6

What is the proposed offering 6

Overview of the service 8

Technology architecture, platform components 8

Value Proposition 8

What is the value proposition 8

How does it meet customer needs 8

How is it positioned versus competition 8

Competition 8

Major Competitors 8

Competitive structure of market, segmentation 10

Key competitors, offerings, strengths and weaknesses 10

Go to Market plan 10

Channel strategy & mix 10

MARCOM plan (e.g. advertising, public relations, promotion, branding) 10

Third-party partners 10

Business case 10

Key business plan assumptions, 10

Business model (i.e. revenue and cost components, component margins, mix) 10

Revenue & profit forecast (at least three years) 10

Activity forecast 10

Required investments 11

Key financial metrics (e.g. gross margin, NPV, time to breakeven) 11

Resource requirements 11

Management team 11

Investment 12

Key skills requirements, facilities, equipment, etc. 12

Risks and Countermeasures 12

Executive Summary

Product Description

Value Proposition

Market Opportunity

Competition

Market Plan

How we make money

Business Plan

Market Description

We have multiple actors, who participate in the medication system alone, thereby creating a very complex system and our approach to reducing error seems to center almost entirely on the concept of developing and enforcing a series of rules.

Doctors and nurses, and to some extent pharmacists, don't have the necessary information at hand when they are prescribing and distributing medicines and often depend on memory for dose/time and medication interactions. In addition, stylistic practices continue to be accepted in the medical profession that wouldn't be tolerated elsewhere. (Dr. Lucian Leape, Harvard School of Public Health, and Health Sciences Division, RAND)

Key user problems/needs

Pharmacist

The hospital pharmacist ensures delivery of safe, effective and economical drug treatment through:

1. Accurate dispensing and distribution of drugs

2. Ensuring the meds are in the correct form and dose

3. Liaising with physicians, nurses, and other health professionals

4. Overseeing quality checks to detect and prevent harmful drug interactions and potential mistakes

5. Monitoring every stage of medication therapy to improve all aspects of delivery

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Nurse

5 R’s:

1. Right patient

2. Right dose

3. Right drug

4. Right route

5. Right time

The most effective way to minimize errors is to redesign systems using these human factors principles:

1. Reduce reliance on memory,

2. Simplify to the extent possible,

3. Standardize (e.g., doses, preparations, times etc.),

4. Use constraints and forcing functions.

(Dr. Lucian Leape, Harvard School of Public Health, and Health Sciences Division, RAND)

Key market trends

1. Bar-coding (patient, drugs)

2. Automated dispensing carts

3. eMed

Key market assumptions

Segmentation and size

|AHA Data |# Hospitals |Total # of Beds |

|Small | 2,709 | 139,633 |

|Medium | 2,133 | 393,768 |

|Large | 922 | 417,573 |

| | 5,764 | 950,974 |

Offering Description

What is the proposed offering

The design objective is to produce an affordable, highly reliable, cassette based dispensing system that can be replenished on-site or remotely to improve the efficiency of the entire consumables supply chain.

The TDS model 1 is configured with a “T” shaped wall-mounted control unit and a pair of removable consumable containers, which dock onto the control arms. The control unit provides an electronic user interface for the operator / customer to enable dispensing of selected medicines contained within the containers. The control unit provides access instructions and authorization, security, transaction tracking and communication with the container modules. The containers are the most novel elements of this product, since they are designed to be removable to maximize replenishment efficiency while maintaining a continuous record of current inventory and dispensing transaction history. Use of advanced material (muscle wire) to enable the ejection mechanism eliminates the need for solenoids, motors and switches, and thereby greatly improves reliability, weight and production cost. SmartContainers will accommodate up to 120 items (medicines } Every SmartContainer incorporates a FlashRAM chip which tracks consumable inventory and communicates availability of requested pieces in response to operator input.

The system control unit is equipped with a PCMCIA memory card, which maintains a history of all transaction data. Each element of the system (both host and containers) has unique electronic serial numbers, which are recorded, in the transaction files contained within the SmartContainers and the host memory card. This allows containers to be replaced as needed (from one shift to another as an example), without losing usage information, and eases the task of the integrated supply chain of understanding current usage patterns. The host memory card is removable (from a locked access door) and can be plugged into a standard PC interface for transaction history downloads to popular applications such as Excel. A sample program is supplied to the user to activate their PC to accept the memory card data and display the information in Excel or Access databases

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Overview of the service

Technology architecture, platform components

Value Proposition

What is the value proposition

Reduction in medication errors through decreased reliance on human factors:

PJ Solutions dispensing system helps to automate the med passing process, helping to ensure that the patient obtains the right med, right dose, right time, etc.

Integration of information across the dispensing pathway:

PJ Solutions allows for tracking of medication dispensing before, during and after the med passing process, as well as integration with existing clinical medication and CPOE systems.

Increasing the efficiency of medication passing:

Nursing efficiency can be increased using the PJ solutions system by decreasing the hand-written record, decreasing the time involved with use of blister packs, and decreasing time associated with disposing of “wasted meds”.

Decreasing the waste factor associated with medication dispensing:

PJ Solutions deals directly with the waste issue through use of recyclable medication cassettes that allow return of unused meds to the pharmacy for future use.

How does it meet customer needs

How is it positioned versus competition

Competition

Growth in the automated medication dispensing market appears to be taking off. There is still relatively low penetration of decentralized/automated cart systems. The definition of “automated” has yet to be fully defined or worked through, however the number of companies merging cart technology with information technology is increasing. Much of the focus is on tracking and ensuring the proper dispensing of medication and providing “secure” dispensing. These companies are trying to help their clients increase productivity by allowing nurses to ‘take fewer steps’ and at the same time provide confidence that the medications are the right medications for the right person at the right time.

Below is a list of companies that provide medication carts. As we look closer at each of these we will provide in-depth analysis on those we find are providing cart systems we would consider to be in our space.

Major Competitors

AmerisourceBergen

AutoMed is their division for dispensing

Cardinal Health - Pyxis Medstation

Lionville



Lionville sells iCarts - Point of Care iCarts™ are designed to support mobile computing and bar code scanning. The iCart combines the security features of a medication cart with the timesaving efficiency and error reduction of bedside computing and medication administration.

S&S Medcarts



The Partner Cart Series Medication Carts provides controlled access and security by supporting multiple User-ID access codes, providing graphical at-a-glance drawer status, and automatically locking partially closed drawers. 

The electronic locking system supports up to 500 programmable User-IDs; this allows the SilentPartner Audit Trail™ feature to track when and who unlocks the cart and which drawers are opened by that user.  Because the cart knows which drawers are opened, a graphical indication of drawer status can be displayed on either the touch-screen display or within the Partner Display software, to help determine which drawers have not been captured by DrawerCatcher™. 

Artromick International

The Artromick Avalo IMC has a keyless lock system. A user pad allows for up to 5 different 4-digit access codes. They also promote a system called Pintrax access system where they zone the different drawers on a cart and allow for different access capability depending on the zone. Narcotic zone could open for 10 seconds and then automatically re-lock. All this is programmable.

MedDispense

Med-Dispense provides decentralized automated medication dispensing systems for health care facilities nationwide. Our systems are known for their low cost and high-capacity yet compact design.

The dispensing automation that most facilities desire is simply out of their price range. Med-Dispense delivers an affordable, robust system that even the smaller hospital can afford. Our systems use the latest interface technology, ensuring revenue capture as well as JCAHO compliance at a surprising low cost.

Compared to other vendors, our systems are undoubtedly the most affordable on the market today as well as the simplest to use.

• allow nursing access to medications with pharmacy control via centralized server

• reduce medication errors

• eliminate missing doses

• eliminate manual charge functions with interface functionality

• ensure accurate dispensing with profile interface

• enable freestanding functionality when network connectivity not feasible

Our software is the most intuitive dispensing system software available on the market today. Our systems were developed by healthcare professionals who preserved the objective of keeping training simple while preserving extensive functionality. Nurses can typically be trained on our systems in less than 7 minutes.

Full interface functionality is also available through the HL7 standard, including ADT, billing, profile, inventory, and formulary.

Because implementation issues that are involved with HL7 interface projects usually require custom development and extensive site analysis, MED-Dispense employs a team of analysts to serve as HL7 interface implementation specialists. These specialists will work with the medical facility and third party vendor developers on HL7 interface projects from the initial design phase until the interface is installed and in production

MacBick (United Health Supply)

Evercart

MMI Medcarts

Harloff

Baxter



Barcoding at the Bedside article of implementation in a MA hospital.

Competitive structure of market, segmentation

Key competitors, offerings, strengths and weaknesses

Go to Market plan

Channel strategy & mix

MARCOM plan (e.g. advertising, public relations, promotion, branding)

Third-party partners

Business case

Key business plan assumptions,

Business model (i.e. revenue and cost components, component margins, mix)

Revenue & profit forecast (at least three years)

$2,000 unit Cost

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$5,000 Unit Cost

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Activity forecast

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Required investments

Key financial metrics (e.g. gross margin, NPV, time to breakeven)

Resource requirements

Management team

Company ownership:

PJSolutions Inc is an S Corporation incorporated in the state of New York, the founding principals and co-CEOs are Pete Schneider and John Veenstra. The company’s business offices are at 51 Heatherwood Road in Fairport, NY, 14450. Telephone (585) 377-7889, and fax at (585) 388-7986. This office is temporary located in Peter Schneider’s home – business forecasts include provisions for a corporate office and prototype development facility.

Founding Principals:

John Veenstra and Pete Schneider were senior managers with Xerox Corporation for a combined 55+ years. During that period they held leadership positions in a diverse array of assignments including product development and testing, remanufacturing, retrofit engineering, reliability improvement programs, strategy development, program management, process engineering, statistical control / measurement systems development and customer / technical support center management. Both are certified Quality Facilitators, skilled in the use of Systems Thinking, Quality Improvement Process and Problem Solving. Educationally, John and Pete hold degrees in engineering and business administration.

Both were highly recognized within Xerox Corporation for their accomplishments; awards included the President’s award, Special Recognition and numerous high achiever awards. Beyond formal recognition, Pete and John were frequently invited to participate in high profile task forces and presidential reviews

Over the last decade, John and Pete were commissioned by corporate management to lead a global task force with worldwide representation from engineering, manufacturing, field service, supplies, finance and distribution charged with capturing a $200 million improvement in product improvement over 5 years. Systems Thinking approaches were successfully utilized to exceed the target objectives; the key success factor was the ability to transform concepts to production deliverables in months instead of years. These learnings have been transferred to PJSolutions – this is evident in the rapid development timeline for the TDS Model 1.

Investment

Partnership track

Grants

Other Investors

Key skills requirements, facilities, equipment, etc.

Risks and Countermeasures

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