Health Grades, Inc. Q4 2008 Earnings Call Transcript

| About: Health Grades (HGRD)

Health Grades, Inc. (HGRD) Q4 2008 Earnings Call February 19, 2009 11:00 AM ET


Kerry Hicks – Chairman, Chief Financial Officer

Allen Dodge – Chief Financial Officer


Tim Brown – Roth Capital

Jackson Spears – The Robins Group

Mitra Ramgopal – Sidoti & Company


Welcome to the fourth quarter 2009 Health Grades Inc. earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today's call, Mr. Don Barclay of [Lippert Hileshorn & Associates.]

Don Barclay

Good morning. This is Don Barclay with Lippert, Hileshorn & Associates. Thank you for participating in today's call with Health Grades. Before management begins prepared remarks, I would like to remind you that this conference call will include forward-looking comments. All statements other than statements of historical fact may constitute forward-looking statements.

Although the company believes the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the company's filings with the Securities and Exchange Commission which are available at All forward-looking statements are qualified in their entirety by these factors.

Furthermore, this conference call contains time sensitive information that is accurate only as of the date of the live broadcast, February 19, 2009. This call is being recorded on behalf of Health Grades and is copywrited material. It cannot be recorded or rebroadcast without the company's permission. Your participation in this call implies consent to our taping.

On today's call, Health Grades Chairman and CEO Kerry Hicks will provide a company update and discuss business highlights and then Chief Financial Officer Allen Dodge will review the financial results. Following their prepared remarks, we will open the call for questions.

With that said, I'd like to turn the call over to Kerry Hicks.

Kerry Hicks

I'd like to extend our welcome to everyone on the call today. I'm pleased to have the opportunity to discuss another successful year and quarter for Health Grades and talk about how and why we see continued growth and success going forward.

Allen will provide detail on the fourth quarter results, so I would like to take a step back and take a look at the year as a whole and review our accomplishments in the context of our strategic objectives.

In our conference calls in early 2008, we discussed our transformation from a hospital ratings company to a provider of health care information. This transformation was in keeping with the trend of consumers taking more control of their health care decisions. The key objective in making the transformation for Health Grades were expanding our content making our information more widely and easily available and monetizing our broader asset through sponsorship, advertising and partnership initiatives. I believe we executed well on those objectives during 2008.

From a content standpoint, we introduced a number of products in the last 12 months. In May of last year, we launched the prescription drug information ratings tool which allows patients for the first time ever to see drugs which physicians prescribe, most within a particular class of drugs and see whether that use of the drug is growing or waning.

In October, through the acquisition of we added specific information covering more than 13,000 treatments and conditions and over 7,000 symptoms. In December we began providing the Health Grades outstanding patient experience award based on a nation wide patient satisfaction survey. This award will recognize the top 15% of hospitals nationally and make that information available to consumers.

Last month we initiated two ratings for physicians; the Heath Grades five star doctors and the Heath Grades recognized doctors. The Health Grades recognized doctors include physicians who are Board Certified in their specialty, are free from malpractice judgments, State and Federal sanctions.

The five star group includes physicians which meet that same criteria but also are affiliated with hospitals that are five star rated by Health Grades in that physician's specialty. Specifically, there are about 55,000 doctors that quality for the five star award out of a universe of approximately 800,000 practicing physicians.

Those ratings are available on and we believe will be a tremendous asset for consumers who want to base their selection of a physician on objective data. This is an example of how we not only differentiate our content but our focus on continuing to expand our robust physician profile and give consumers as much actionable information as possible to assist them in making better health care decisions.

We have also significantly expanded our reach into the market. In 2008 we partnered with both Google and Yahoo to be the provider of hospital and physician information on their respective health sites. Through these partnerships as well as others, our hospital ratings and physician information are available to millions of consumers.

With respect to Yahoo, we will be the exclusive source of physician and hospital provider information in the re-launch of their health portal that is currently being expected to launch in the first half of this year. We are also packaged our page information into an 1,100 page desk reference book title "Health Grades Guide to American Hospitals and Doctors" which is available in book stores throughout the country.

These efforts to be more widely known and acceptable have been successful. Our brand name recognition is greater than ever and that is reflected in web traffic. With the ongoing growth of the site, plus the site, we are now ranked ninth in traffic for heath care sites a according to Com Score.

As a result of our internal growth along with our acquisition of our, we had approximately 14.5 million unique users to our site in January 2009, an increase of 10 million users compared to January 2008. According to Com Score, we are the ninth largest advertising supported health care property on the web.

Just as important, and really more importantly than the pure traffic number, is that our visitor is differentiated from people going to other high traffic health care sites. Specifically, our audience is more likely to be people looking to make an appointment with a physician and/or schedule a procedure in the very near term. The traffic to the other sites is generally just information gathering on a particular illness or therapy.

Based upon a recent survey of our users to the site, nearly 80% of our users will be seeing a physician within the next 30 days. That difference in a highly differentiated value again, by physician, is very important to our sponsors.

Our successful partnerships with Canon Health Care Systems and Fresenius Medical Care are samples of how our unique content and differentiated audience have created profitable business opportunities. Over the last several months, we have significantly refined our sponsorship message and tailored these message to a specific target market.

For example, our connecting point product is targeted to hospitals and single specialty providers such as Fresenius. The focus of this program is to connect patients with providers and turn sponsored physicians into relevant search paths and provide advertising and other brand building opportunities directly on the sponsored physician profile pages.

Our focal point product is targeted to Pharma and Med device companies. The focus of this program is to provide Pharma companies and Med with an opportunity to target messages to individual physicians. We believe the power of this opportunity is in the ability of Pharma companies and MedTech companies to send a completely different message to physicians that write their drugs than for instance, those that do not write their drugs by way of example.

This program is also more about assisting these companies and increasing the number of prescriptions written, patient education and medication compliance. Although we have not sold any of these contracts to pharmaceutical companies yet, we are gaining substantial traction in the form of more meaningful positive responses and requests for proposals.

Because of the economic environment, overall advertising spending has been soft. The one really strong area has been in search. Our search engine optimization efforts were very successful in 2008. Our growth of 10 million additional unique users per month from January 2008 to January 2009 includes an increase of 3 million unique users directly related to those efforts.

We believe that because of the increased web traffic and differentiated audience we discussed earlier, Heath Grades is very well position as ad spending recovers and as more companies appear to be shifting advertising expense from traditional off line or print campaigns for example, to on line initiatives.

I'd also like to give an update of our Infinity Credit card initiative. Following substantial due diligence in the face I would characterize severe financial turmoil, in seeking out financial services partner that is both capable and dedicated to serve the health care industry, an agreement with U.S. Bank has been signed in which this bank will serve as the financial service partner in support of a co-branded and direct consumer version of the Life Awards credit card program.

With the on boarding of a bank partner and additional focus on the business by an Executive Vice President Steve Wood over that area, business development efforts have accelerated. Discussions are well under way with several well regarded prospects. There's continued business development strategies of penetrating industries through leading organization in their respective segments.

Strategic discussions are with major trade organizations in the medical group area and the health plan industry segments. Initial revenue is expected from development fees during the first half of 2009 as program implementation activities accomplished with existing and new clienteles.

In summary, the activity I have described has greatly advanced our role as a critical health care information provider. We will continue to be a leader in helping empower consumers, sending transparency to the market and fostering accountability in the provider community.

Of course our core business of hospital marketing, quality improvement products remains very strong and we expect will show strong growth again this year. Like virtually every other business hospitals under pressure to control costs. However, the leading hospitals also recognize they need to promote their quality in a differentiated fashion as well as their services in order to maintain and indeed grow market share.

It's fair to say that the competition to acquire patients is becoming more competitive and we don't see that abating at all irrespective of the market conditions.

Our very high retention rate, which Allen will discuss in a moment, even in this difficult business environment are a clear indication of the importance and trust those hospitals place on our ratings information. Once again, we are pleased that we continue to achieve strong growth across all areas of our business. As always the entire Health Grades team is focused on enhancing our ability to perform and build value over the long term.

With that, I'd like to turn the call over to our Chief Financial Officer, Allen Dodge who will discuss our financial results as well as give an update on guidance.

Allen Dodge

As usual I will comment broadly on our results and then provide more detail on specific business areas. Total revenue in the fourth quarter was $11.2 million, an increase of 29% over total revenue of $8.7 million in the fourth quarter of last year.

Provider services contributed revenue of $7.8 million, up 15% over the fourth quarter 2007. Internet business group revenue reached $2.9 million, up 84% over the same period of 2007. This growth was fueled both by our connecting point program in the contract with Fresenius in particular as well as a substantial increase in our advertising revenue, principally due to our Adviware in October of 2008.

This smaller health solutions group grew revenue by 45% year over year to the quarter ended 2007 to the quarter ended 2008 and grew to approximately $2.5 million.

Once again, the key to the growth in provider services revenue in Q4 was continued high retention rates for our hospital marketing products. More specifically for the year ended December 31, 2008 and 2007 the company retained contracts or signed new contract representing 80% and 70% respectively of the annual contract value of hospitals who's contracts had first or second year anniversary dates.

We believe a number of items contributed to this increase in our retention rate in 2008. First and foremost, we continually review our processes and best practices regarding how we manage our clients and we work diligently to be viewed as a partner with them. We believe our efforts in this area early in 2008 contributed to our strong retention rates for the entire year.

In addition a small but growing number of our agreements are being signed at two year fixed agreements with again, a third year option to continue with their renewal.

We also had very strong performance in the clinical excellence research and consulting portion of provider services which grew by 48% in the fourth quarter of 2008 over the fourth quarter of 2007. This group provides analysis and consulting services to hospitals who are seeking to better understand their rating and how to improve performance.

Hospitals are increasingly becoming more concerned about their quality of care and searching for ways to improve. We believe we can add substantial value to these hospitals and our growing business in this area is indicative of this point.

In the unit business group two principal growth drivers for fourth quarter revenue were the sponsorship agreements, in particular with Fresenius Medical Care which we signed in the second quarter and the acquisition of WrongDiagosis. The Fresenius agreement itself represents nearly $2 million in revenue annually which is recognized on a monthly basis.

In the fourth quarter of 2008 we saw modest increase in revenue from our consumer reports business over the third quarter of 2008. Although direct sales of our consumer reports business saw a slight decline over this period, we saw meaningful sales from a new subscription service we launched over the last several months.

This service updates consumers periodically with what changes have occurred in their physician profiles that are relevant to them, including affiliated hospital ratings, changes in Board Certification, sanction information, etc.

We're encouraged by the early success of this product and will continue to expand the services being offered to consumers under this program in 2009 and beyond. That being said, we continue to believe that the sponsorship and advertising business represents a much larger opportunity, especially in light of our increased site traffic and additional targeted health care information through our acquisition of

Total operating expenses in the quarter increased by 29% to $7.6 million from $5.9 million in the fourth quarter of the prior year. Breaking this down a bit further, sales and marketing expense was up 33% to $3.4 million. Product development expense rose by 27% to $2.0 million and general and administrative expenses increased 27% to $2.2 million.

The increase in sales and marketing expense reflects higher activity in our sponsorship advertising initiatives including additional hires to support all of our sales efforts and activity related to our partnering initiatives.

The increase in product development expense was primarily the results of additional personnel costs related to new products as well as the expansion and improvement in physician data in several of the initiatives Kerry spoke to earlier.

The increase in general and administrative expenses was due mainly to increase in personnel costs, recruiting fees and rents due to the addition of a new incremental office lease in the later part of the year.

Our operating margin for the fourth quarter 2008 was 14% compared with an operating margin of 16% in the fourth quarter of 2007. The lower operating margin in the fourth quarter of 2008 compared to prior quarters of this year is principally due to additional commission cost from contracts sold in the fourth quarter.

As many of you know, as sales individuals get closer to their quotas for the year, our commission structure pays them a higher incremental commission rate for each deal that closes. That amount is accrued in the month the contract is sold although the revenue related to these contracts is recognized on a straight line basis over the next year of the contract term.

Our net income for the fourth quarter was $1.0 million or $0.03 per fully diluted share. This compares with net income of $1.2 million or $0.04 per diluted share in the fourth quarter of 2007.

Turning to the balance sheet, as of December 31, 2008 our cash and cash equivalents were $11.3 million compared with cash and cash equivalents of $23.4 million at the end of 2007. During the fourth quarter, we generated $2.9 million in cash flow from operations and for the year, generated cash flow from operations of $6.4 million.

As you know, the Adviware acquisition was an all cash transaction and we paid approximately $6.2 million in upset consideration in addition approximately another $0.5 million in capitalized acquisition costs for a total of $6.7 million.

In addition, during 2008 we repurchased more than 2.4 million shares of our common stock with an aggregate purchase price of $10.7 million. As of December 31, we've repurchased more than 4.2 million of the authorized 5 million shares for an aggregate purchase price of approximately $19.6 million.

Turning to our guidance, today we are reaffirming the financial guidance for 2009 provided back on December 17, 2008. Specifically, we are forecasting revenue to grow by approximately 20% to approximately $48 million with all of our business lines contributing to that growth.

Provider services is expected to grow by approximately 15% and contribute about 70% to 75% of total revenue for the year. Combined, the internet business group and strategic health care solutions are expected to achieve revenue growth of between 30% and 40%.

The forecast for the internet business group includes a full contribution of the Wrong Diagnosis site which had a revenue run rate of approximately $2 million when we acquired it in October of last year. We are maintaining our forecast for operating margins in 2008 of between 17% and 21%.

That concludes our prepared remarks. With that, we're ready to open the call to questions.

Question-and-Answer Session


(Operator Instructions) Your first call comes from Tim Brown – Roth Capital.

Tim Brown – Roth Capital

A couple of questions on the Adviware acquisition. Can you tell us how much it contributed in the quarter?

Allen Dodge

About $0.5 million of revenue in the fourth quarter.

Tim Brown – Roth Capital

And that was closed in October so it was a full quarter?

Allen Dodge

It was about two and a half months.

Tim Brown – Roth Capital

Of the unique visitors of 14.5 million in January, what's the break out between Adviware and

Allen Dodge

Roughly equivalent to just under 7.5 million each, so about 7.2 million each.

Tim Brown – Roth Capital

Maybe you could comment on the integration, if that's completely done now, and if you've been able to bring any of the advertisers over from to

Kerry Hicks

We've actually to some degree cross walked to the best advertisers we had on and we married those with the best advertisers on, so to some degree we'll get appreciation because we're essentially synthesizing the best advertisers of both entities and we see again, obviously in our advertising rates, as a function of that.

There are many things that we're doing from an integration standpoint. Technically they're both functioning. They're both operating. You can see that by virtue of the traffic and the traffic build. We believe this traffic growth by broad linking and by a very deep and comprehensive way between both the sites. That's on ongoing process.

And secondarily is the build out of micro channels. So it could be for instance. So all of those initiatives are well underway. Obviously the build out of the micro channels is going to take some time and we'll be doing that over years, because we like to have, you know what the numbers would take, 50. We think we can build those out fairly quickly, but there's a number of integration efforts that are well underway but there are a meaningful number that have already been accomplished as they're delivering the results consistent with our expectations.

Tim Brown – Roth Capital

So the micro channels, if you went to a specific doctor, you would then see a link, you get a heart doctor or something, you would see a link over to for heart issues?

Kerry Hicks

Let me frame it a little bit different and maybe it will make it a little more understandable. We expect all of these to be individual sites. Again, they're obviously integrated into the experience from a Health Grades user's standpoint, but again, individuals can track to them directly through search.

So if I'm interested in joint replacement, our goal is obviously in my example if someone searches joint replacement on Google that they link over to this That site will have content that is relevant to joint replacement. That is both specific content related to the joint replacement as well as for instant joint replacement surgeons and then the hospitals associated with joint replacement.

And then there's a lot of other things that we build in there; breaking medical news for instance, physical therapy. That build out is going to be comprehensive but they would be what amounts to stand alone sites that actually should increase the traffic build for Health Grades as an overall entity over time.

Tim Brown – Roth Capital

So each site will have both doctor ratings and content. On the consulting services, you mentioned it was up 48%, I was just curious what's the actual number in the quarter?

Allen Dodge

Are you looking for the absolute increase or are you just looking for the amount?

Tim Brown – Roth Capital

The amount in the provider services [inaudible]

Allen Dodge

The quality for the quarter is about $1.2 million. It's still as we said before, it's still relatively stable at a total of $7.8 million in provider for the quarter, but it is a growing portion and meaningful portion.

Tim Brown – Roth Capital

On the Affinity program, now that you have everything signed, what's the outlook there for '09 in terms of is there any meaningful revenue there? And also in terms of a profit?

Kerry Hicks

We expect to make some announcements with respect to clients both again, in the large multi-specialty clinic space and the regional health plan space as well as actually in the large hospital system space.

I think that we'll have achievement in all three of those areas in the year, and I think that we'll have some modest revenue contributions noting again, that model is certainly predicated on getting cards in force. So as you can imagine, there is a substantial amount of upfront work which we expect to get development fees to offset our ongoing expenses but where we really see the greatest return is obviously building an annuity with our stream, getting cards out in force.

So that's the best visibility we have right now. We're working on several major initiatives that could substantially ramp but we're not prepared to give any color or guidance with respect to specificity on those initiatives today.


Your next question comes from Jackson Spears – The Robins Group.

Jackson Spears – The Robins Group

Could you give us some color on the additions to your sales force from the fourth quarter, how large it is now and what you plans are for this year and where they are added for you?

Allen Dodge

If you look at our provider side of our business we have about eight dedicated sales team members of our marketing program side to those that sell the SKI products. We have another about four on the clinical excellence research and consulting and obviously, as you know our consulting staff which numbers about approximately 15 on the marketing side and then another 7 on the clinical excellence and research and consulting side, they're also responsible for the up sell portion of our business.

If you look at each and every year in terms of the new sales we sign, roughly 25% to 30% of those come from up sells. It is a broad sales force, so we've added over the last few months I would say about four new members that are encompassed in that group.

I think we're well positioned as we head into '09 now with the number that we'd like to see, so we feel like we're pretty fully staffed up in all of our areas. We had talked previously on other calls about the number of individuals we have on kind of the internet business group side on some of connecting points and focal points and that number remains at about five individuals that are selling those combined suite of products.

Jackson Spears – The Robins Group

What additions have you made in the R&D staff? It looks like you're making some significant investment spending for new product and your existing database.

Allen Dodge

If you look at our product development infrastructure, one of the things that we're really ensuring that we're preparing ourselves for success as it comes to growth. And with that comes a build out of web developers, application developers, folks on the technology side. Obviously it's very important for us to continue to be ahead of the curve on all of those technology efforts and integrating our products throughout all of our web site offerings.

Things like the recognized positions in the five star positions, that's a substantial process, but we also think that it does quite a bit to differentiate our data and our information from others out there that provide kind of just a base information. So a lot of those additions is a long winded way of saying a lot of those additions are really on the technology and infrastructure, and we're also at a high level moving more to an agile environment so we can react much more quickly and bring products to market in a better fashion.

Jackson Spears – The Robins Group

You had some dramatic progress on unique visitors. Could you give us some color on what your ability to translate that into monetization and is it longer in the current economy with everyone running scared?

Kerry Hicks

I think key to our traffic build and also to monetizing that traffic, we made a key hire about a month ago, Andrew Pearson, who is a former general manager of MapQuest, now runs our internet strategy. So let me describe a general rule in terms of three broad areas, which is; how our content will be distributed. That will be one of the responsibilities. The site experience for our users, and lastly how we're monetizing our inventory.

So how we're going to measure those is really against traffic on the distribution side, on paid use from the experience side as well as from a revenue perspective. Obviously, that's tied to inventory management. So we're very optimistic. We are seeing an uptick particularly over 2008 in our base ad rates.

Again, what we hesitated doing is giving any guidance on that because they are somewhat variable depending upon the advertiser, and as you know and what we've talked about, people who follow the company, ultimately our goal is to get up stream and sell directly to Pharma, MedTech as well as in the provider space, meaning the single specialty and hospital systems, because that's where you see the major multiple step up in effective CPM rates.

Jackson Spears – The Robins Group

The stimulus bill is really encouraging electronic contact with big bucks behind it. Does that change at all the portals strategy or might they accelerate their development strategy?

Kerry Hicks

There's a broad technical piece of that. There's roughly $1 billion for office visits, 72% of Americans had an office visit for decades, literally decades unless you find a way of introducing technology in the individual practice you're building out an electronic medical record is going to be challenging.

And even if you can do it, there's an adoption issue which I think is frankly generational. So it's a laudable goal. We're supportive of it obviously. The more information we get out in the market place, in particular if it it's translated into a personal health record, which again would be our calling on the patient side to help them better manage their health care.

We're widely supportive and enthusiastic about any of those efforts. I think from what we would see is any talk about health care reform inevitably has to include and be centered on the patient. And that's where we come in. So it's tangential obviously to the build out from an electronic medical record, but again the patient empowerment is clearly a role that we have and I would say that it's a substantive role with respect to bringing that to fruition.

Any of those initiatives again, I think are going to be positive for Health Grades.

Jackson Spears – The Robins Group

Could you give us a number for what CapEx is planned for '09?

Allen Dodge

In 2009, I would say it's going to be between $1.5 million and $2 million.

Jackson Spears – The Robins Group

Is that mostly in new hardware?

Allen Dodge

Its hardware, servers, computers, so yes, that's principally what it is.


Your next question comes from Mitra Ramgopal – Sidoti & Company.

Mitra Ramgopal – Sidoti & Company

If we have to look at the guidance for the operating margin in the 17% to 21%, are there any areas in particular on the cost side we should look for improvement? I think the biggest chunk right now we're seeing is product development. Do you expect that to continue?

Allen Dodge

I think what I always look for leverage in the G&A line. I think we expect to ramp sales and marketing and product development with sales, so I think what you should expect to see is us trying to maintain those costs in sales and marketing as well as product development as a percentage of sales.

So product development has been running in the range of 18% whereas sales and marketing does fluctuate throughout the year anywhere ranging from 25% to 30% as we ramp up for the year. But G&A is where my focus is, our focus as a company and I think we should continue to get leverage, especially throughout the year. And that's again, as our sales trend up that's where I expect to see the operating leverage.

Mitra Ramgopal – Sidoti & Company

Given the environment out there, how do you see the relationship, partnership with Google and Yahoo developing? Are you anticipating any significant slow down or is it pretty recession proof here?

Kerry Hicks

I think there's an area is that is recession proof. Again, given the broad macro characteristic from a traffic standpoint, it is nevertheless three years on a basis internet traffic as well as paid use is up about 5%, but in health care it's on a unique business up 100% and paid use is up nearly 400%.

I think that there's much greater understanding and acceptance on behalf of the general consumers and there's wide variability in care. I think that explains a lot of our traffic growth above and beyond what we do here every day from an execution standpoint.

Yahoo, we're in contact with every week. Google, we're in contact with almost on a daily basis. We're not seeing any substantial traffic out of Google health yet, although that's a long term investment. We've said that for years. But it's hard to argue that our investment at Google, although our traffic didn't come directly from Google health hasn't been successful insofar as we've been able to forge relationships within the Google team that has obviously produced the traffic growth that we're very pleased with.

Mitra Ramgopal – Sidoti & Company

DSO's did pick up a little year end. Was any of it really related to the acquisition or where there other issues?

Allen Dodge

In terms of DSO's, actually when you look at it particular from our Q3 to Q4, because we tend to have a lot of sales towards the end of the year, we sometimes see that kick up, but there's nothing that really gives me a lot of concerns in terms of those sales outstanding. Our collections have been good as we begin the year, and as you know, one of the things that we really benefit from is the fact that we bill upfront.

We have the ability if there is ever an issue with a particular client, we don't get too far into that cycle before we can really address those collection issues and really stop those services so to speak if we have to. But the fundamental point is that we are seeing strong collections and I'm not concerned by that build. We typically see that at year end.

Mitra Ramgopal – Sidoti & Company

Just coming back on the hospital side of the business, given what's going on out there, there are a lot of hospitals under pressure of cutting costs and facing some closures etc., do you see that having an impact on the provider business?

Kerry Hicks

Actually we're seeing to the contrary, at least in our existing core business, we're seeing an uptick on retentions which I think would actually be a leading indicator if we would see any degradation in that business. Certainly on the sales side we're seeing a lengthening of the sale cycle, I think just because of the general economic environment and the fear that's just out there, so it's maybe taking us 30 days longer to close a sale, but it certainly hasn't reduced either the demand, the number of sales or the number of closes as a function of our growth.

I think what hospitals understand and one key feature of this company and of the business and what we're beginning to appreciate is we track very high utilization that correlates with higher acuity. So if you think about it intuitively, no tracks this stuff to manage a cold or fever. But if you need by-pass surgery or if you need joint replacement, you're going to come to us.

A measurement of that, and one that we like to suggest by way of an example, if you take all the cardio thoracic surgeons searches in a year, and you correlate that with the number of by-pass surgeries, we account for 90% of the by-pass surgeries. It's a huge number so our impact on the in patient side, which is again, about 40% of this nation's health care spend, we have a tremendous impact and tremendous reach, and that makes us highly relevant.


You have no further questions. I would now like to turn the call back over to Mr. Kerry Hicks.

Kerry Hicks

Thank you very much everyone for your time. We look forward to speaking with you throughout the year.

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