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HealthSpot Files for Bankruptcy Liquidation

The mHealth company had hoped to make its kiosks as prominent as ATMs. Now 190 kiosks sit unused, and industry leaders wonder where the market will go.

By Eric Wicklund

- Kiosk maker HealthSpot has filed for Chapter 7 bankruptcy liquidation, with officials saying the Ohio company doesn’t have the cash to continue.

Launched four years ago as an mHealth solution for everything from retail locations to health and community centers, the company raised some $48 million and built almost 190 eight-foot-by-five-foot kiosks, according to filings with the U.S. Bankruptcy Court. As many as 54 of the kiosks had been deployed, with 25 of them in Rite-Aid pharmacies in Ohio through a partnership announced last year.

"(T)elemedicine and telehealth has been evolving in the last several years. A number of companies throughout the United States are trying to develop online solutions, but HealthSpot, we thought was at a level above others," Robert Thompson, Rite-Aid’s executive vice president of pharmacy, told last July, as the kiosks were being deployed. "Once we reviewed their technology we thought this would fit appropriately.”

"No. 1, the design is elegant and it's private with technology inside the kiosk that has very high quality instruments to assist with a diagnosis,” he added. “That technology is integrated into the whole experience. Everything is recorded for physicians and patients.”

According to a story in Columbus Business First, HealthSpot’s board of directors voted in December to have CEO Steve Cashman file for either Chapter 7 or Chapter 11 bankruptcy reorganization; Cashman and the board then resigned, and the deployed kiosks were shut down.

The company recorded about $1.1 million in revenues over the past three years, forging relationships with the likes of Rite-Aid, Xerox, Kaiser Permanente, Rainbow Babies and Children’s Hospital, the Kettering Health Network, the Mayo Clinic and the Cleveland Clinic, among others. At one point, officials said they wanted the kiosks to be “as prominent as ATMs.”

Rainbow tested the kiosks in 2013 at its urgent care center outside Cleveland, then deployed two kiosks at inner-city locations, where they were used as an after-hours alternative to the ER.

“It’s keeping the care within the medical home,” Rainbow Primary Care Institute President Andrew Hertz said in an August 2015 Akron Beacon Journal interview, during which he also noted the kiosks had a 98 percent satisfaction rate among users. “Patients can go there and still receive care from a provider who has access to their medical records.”

In 2014, HealthSpot touted the success of a kiosk placed in a San Diego County office building as evidence that this type of mHealth platform could be of more use than online-based telehealth platforms.

"This is the bar. This is what we expect with HealthSpot," Cashman said then, adding that the company had planned to locate kiosks in several more California locations. "This offers the same standard of care as an in-person visit. … This is becoming an extension of the medical community. Doctors love it, and the only question we're getting from consumers is, 'Why aren't there more?"

The company had an eager partner in the Cleveland Clinic as well. Matt Stanton, the health system’s business director for telemedicine, said the kiosks had their fans, and he felt the company’s collapse wasn’t due to the form factor.

“It was not a failure of the concept,” he said.

Industry officials have said that while HealthSpot’s kiosks were well-equipped and functional, they were too big and complicated to be sustained in most retail locations. Companies like American Well and Vecna market kiosks as well, but they’re smaller and more suited to sites like health system waiting rooms and community health centers.

HealthSpot attorney David Whittaker, of Bricker & Eckler, LLP, said the company was seeing some success, but couldn’t find the financial resources to continue.

“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,” he told Columbus Business First.

And Stanton said the Cleveland Clinic saw success with the kiosks during the first year of their use, but once the health system launched an mHealth platform tied to mobile devices like smartphones one year later, the needle started to swing.

According to the court filing, HealthSpot listed assets of $5.2 million and liabilities of $23.3 million. 


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