BioTelemetry, Inc. (NASDAQ:BEAT) Q1 2018 Earnings Conference Call - Preliminary Transcript
Apr 25, 2018 • 05:00 pm ET
Thank you. (Operator Instructions) Our first question comes from Bruce Nudell with SunTrust. Your line is now open.
Good afternoon, Joe and Heather. Thanks for taking our questions. We recently put together a schematic -- hey, we put together a schematic model describing the pricing method that Medicare may use to set a permanent reimbursement level through extended Holter based on what they did with traditional Holter, barring an improvement in outcomes such as stroke reduction it does seem there could be -- up to a hundred bucks or downside risk to the $300 technical fee.
That said no one seems to think anything will be done over the next three to four years. Hence the question is, whether BEAT's likely to get much more aggressive in that segment given that the profit margin for extended Holter even in lower price point is likely to be attractive relative to that of a traditional Holter?
Yes. So a couple of parts there. One you talked a little bit about the pricing plan or a process to get permanent pricing and coding for this new category as you know is still under a temporary code. We will participate in that process as much as we can. I think it's a good thing to get it permanently priced sooner rather than later. I don't want to speculate on where that will end up, but I do think it will be better than traditional Holter, right? So the second part of your question is given that, would we be more aggressive in going after that market? And the clear answer is yes, in the first quarter of this year, we started to put more emphasis on that.
Again in my comments, I said I was going to refrain from talking about what those specific metrics are in terms of volume and growth just because it's kind of early on and it would be candid, the growth numbers are obnoxious, right? Because we're working off of a relatively low base. But the important thing is, we have the entire sales organization now has access to the product and is responsible for selling it as you may recall LifeWatch did not have an extended wear Holter, so getting the rest of that sales team up to speed on the product was an important step.
Thank you so much. And my follow-up is, you guys are very interesting, you had a segment of the market you kind of put MCOT in the same sort of patient genres, event recorders and extended Holter in the same sort of patient genre as traditional Holter. And like when you do the math on that MCOT could grow sustainably for like 10% with event recorders kind of being flat in the whole thing, that whole sub-segment growing at the rate of elderly population growth. And you do the same thing for extended Holter except grow 20% with just minor declines in traditional Holter and still have very plausible aggregate growth.