HealthSpot closes the doors, shuts kiosks in Rite Aid, Cleveland Clinic (updated)

As we reported last July, HealthSpot, the Dublin, Ohio, based telemedicine health kiosk business which was [grow_thumb image=”” thumb_width=”150″ /]carrying out a retail trial with Rite Aid since November 2014, started commercial operations in 25 locations in three Ohio areas.

In October reports emerged of a patent infringement claim that has been ongoing since April 2014 against HealthSpot by Nevada-based Computerized Screening. (More on this ongoing series of lawsuits in Ohio and Nevada is here.)

According to reports in Columbus Business First, HealthSpot has now informed Rite Aid that it would cease operations as of 31 December last year and its telemedicine kiosks are reported to have shut down in Rite Aid pharmacies. HealthSpot has also notified Cleveland Clinic that it has discontinued operations, which shuts its pilot with Cleveland Clinic in northeast Ohio.

HealthSpot’s website remains live but the last entry in the press releases section is from September 2015 and is on events at which HealthSpot was to participate in September and November. The blog page on its website is well out of date with the last update dated as far back as March 2015. (Links for locations and patient log in were inoperable–Ed. Donna)

One recent news report stated that attempts to contact CEO Steve Cashman went unanswered.

In November 2014, HealthSpot received a major investment from Xerox on top of a $18.3 million springtime round [TTA 13 Nov 14].

Updated 13 Jan (Editor Donna)

The Columbus Business First articles that Editor Chrys has linked to, as of this point, are the most informative. Neil Versel and Stephanie Baum also have related articles in MedCityNews. They also chewed it over with HealthcareScene network’s John Lynn last Friday on video (starts at 26:30) with a surprising revelation that Mr Cashman had been in touch with Mr Lynn, to be published in one of their blogs (but not yet as of this update.) Thus the mystery remains.

Xerox has issued a statement of their continued interest and support of the healthcare sector which is covered in MedCityNews above. We also noted their diverse interests in healthcare quality management, data and analytics through through their Midas+ division here last year.

According to CrunchBase, HealthSpot received $43.81 million in financing since 2011, not including the undisclosed support from Xerox, with the most recent raise debt financing of $11.56 million in January 2015. One year ago, HealthSpot looked so promising. Yet the model had a lot of drawbacks. Fixed kiosks are a lot more expensive than software. A user also had to wash, dress and travel to them–after making an appointment–intimidating or unneeded by users seeking a quick diagnosis. Apps or a video consult using a desktop and at-home tools like a POT (plain old thermometer, cost under $15 even for digital) and a digital camera do the same job in the comfort of home. This Editor also noted in previous articles that while we were impressed by the expansion of a remote video consult with health tools such as thermometers and otoscopes, maintaining the kiosks in good order and cleanliness was labor intensive.

Thus we see a quick burn on funding, a probable lack of consumer takeup, coupled with a persistent legal action by a three-decade old, seemingly inactive company (the last news on Computerized Screening’s website is dated 2013) providing a similar service. This last alone has undone more than one early-stage company.  (And returns us to the business necessity of protecting your patents and IP, and where necessary doing a ‘deal-deal’: acquiring a company with similar systems or licensing patents. This doesn’t include those pesky patent trolls.)

We note that HealthSpot had booked its usual sizeable front-of-room presence at ATA 2016 in Minneapolis, which will have to be unwound. (It’s now with a company, new to us, called Innovator Health.) The irony is of course that telemedicine is finally taking off, but without HealthSpot.

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  1. Lawrence Wasserman PhD

    I was not surprised at the demise of HealthSpot for I looked at number of kiosks for international market. The ROI was not promising having looked at their model and the investment and operation maintenance costs couldn’t justify its viability. It was incredible that investors poured money into this venture. Maybe their patent was the key to their receiving funding and they could license the patent for revenue. The kiosk and teleconferencing model looked great a few years ago but technology will find cost-effective models that will meet physician and user needs.

    • Chrys Meewella

      I agree Lawrence. The intellectual property may have had problems though, so may not necessarily have had much value. Did you see Donna’s update on the liquidation of the company?