TWST: Please begin with a brief historical sketch of the company and a picture of the things you are doing now.
Mr. Frist: HealthStream helps hospitals gain insight through research and improve their workforce through learning. We began in 1990 as a small multimedia company focused on using technology to improve learning. With a strong concentration in health care, we became known as "HealthStream" in 1997 and became a public company in April of 2000. At this time, approximately 2,200 hospitals utilize one or more of HealthStream's products, representing over 40% of the nation's acute-care hospitals. Within that group, over 1,700 hospitals use our learning services, representing over 1.7 million contracted subscribers.
TWST: What is the competitive landscape like and what are your competitive advantages?
Mr. Frist: Competition comes from two or three different directions. Large medical publishers like Reed Elsevier offer educational training services to acute-care hospitals, which may include learning platforms and content offerings. There are also general learning management system [LMS] providers that develop and maintain software offerings that organizations from any industry can purchase to manage their educational processes. We believe our exclusive focus on serving the training and education needs of acute-care hospitals provides a strong competitive advantage for HealthStream. As an ASP-based service, our learning platform is particularly well suited for healthcare organizations' 24/7 workforce schedule. Moreover, our customers benefit from HealthStream's clinical expertise — as provided by our numerous clinical personnel, including clinical educators, OSHA/JCAHO training specialists, a certified medical librarian and Registered Nurses.
TWST: What are the main items on your strategic agenda as you look out over the next two to three years?
Mr. Frist: There are several ways we can grow. The first way is to add additional capabilities to the platform and launch additional products that we can sell to existing and new customers. This year, for example, we are launching a new competency platform that allows hospitals to assess, profile and track the skills of their workforce. The second way we can grow is by launching additional content for our customers. We currently have 35 content partners and we continue to sign up additional partners to meet more of our customers' education and training needs.
TWST: What about challenges or problems? What might you be worrying about over the next few years?
Mr. Frist: Competition comes from all angles. There are a few application developers that build learning systems that are gaining expertise in the healthcare market. Also, in some cases, medical publishers sell directly to customers, choosing not to leverage our platform in our distribution networks. That said, it is important to remember that we have a unique model that can link insight gained from our research services to learning plans and activities to optimize employee development and, in turn, have greater potential impact for healthcare organizations.
TWST: What would be the two or three best reasons for the long-term investor to look very closely at HealthStream?
Mr. Frist: As the market leader with the most adopted learning platform in the healthcare industry, HealthStream is a very innovative company that is meeting unique and growing needs among healthcare organizations for research and learning. We believe training and education in hospitals will increasingly utilize online learning due to its 24-hour availability, its effectiveness in consistency of delivery, cost effectiveness, and learning effectiveness. With our network of approximately 2,200 hospital customers, we are well positioned to continue growing our customer base as well as increasing the value of our existing customer accounts.