UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: March 6, 2000
Medix Resources, Inc.
(Exact name of registrant as specified in its charter)
Colorado 0-24768 84-1123311
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7100 E. Belleview Avenue, Englewood, CO 80111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 741-2045
None
(Former name or former address, if changes since last report)
Item 5. Other Events. Interview of John Prufeta, President and CEO, published in
The Wall Street Transcript, Volume CXLVII, Number 10 (March 6, 2000)
Exhibits
Exhibit 99.1 - Copy of the above interview
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDIX RESOURCES, INC.
Date: March 16, 2000 By: /s/ David Kinsella
Secretary and Controller
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THE WALL STREET TRANSCRIPT
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100 Wall Street, New York, NY 10005
Voice: (212) 952-7400 Fax: (212) 668-9842; (212) 668-9858
Copyright1999WALL STREET TRANSCRIPT CORPORATION-ALL Rights Reserved
TWST: Let's start out with a brief overview and a quick history of the company
to set the stage for our readers.
Mr. Prufeta: First, let me say that as a public company, I must note that
the following information contains forward-looking statements that are subject
to risks and uncertainties that could cause actual results to differ materially
from those indicated in the forward-looking statements. Such risks and
uncertainties include whether financing is obtained in timely manner, whether
our software performs as expected, whether we are able to put an efficient
management team together and whether we can provide services that complete
effectively in the marketplace. I call your attention to our filings with the
SEC for a more complete statement of our risk factors. Medix was founded in 1988
as a temporary healthcare staffing company. In 1997, we made the decision to
enter the budding iHealth industry. In early 1998, we purchased Cymedix Lynx
Corporation, an early stage iHealth company.
TWST: As opposed to the original business?
Mr. Prufeta: Exactly. We've recently divested ourselves of the balance of the
staffing business. It requires great discipline and focus to succeed in the
iHealth marketspace.
TWST: What is it that you're doing on the Internet?
Mr. Prufeta: We are a pure-play business-to-business, transaction-based Internet
healthcare company. Medix has developed and patented a proprietary technology
that facilitates virtually every type of healthcare transaction through the
Internet. We market our iHealth capability -- a suite of fully-secure
communication, data integration, and transaction software -- under the name
Cymedix.com. The technology was developed over the last two years and we
received a U.S. patent for it on November 30, 1999.
Healthcare is a cottage industry composed of a large collection of proprietary
systems that are unable to connect with one another. Healthcare needs to move in
the same direction as the financial services industry, where data is easily
communicated across multiple platforms. Billions of dollars and years of effort
were dedicated to accomplishing this goal. The Internet provides the healthcare
industry with an unprecedented opportunity to reduce costs and enhance service
delivery. The missing link is a cost-effective, standardized interface tool that
can unite disparate information platforms. That "missing link" is the essence of
our patented technology. Our technology enables these many entities --
physicians, payors, health systems, intermediaries, labs, pharmacies, etc. -- to
transact business via the Internet seamlessly, without having to re-key
information or interrupt normal workflow. This is a real boon to physicians and
health systems because it decreases the cost of processing transactions, and
eliminates re-keying which decreases the potential for errors.
TWST: What is it that makes your technology unique?
Mr. Prufeta: Many of our competitors don't possess the broad functionality
provided by our product base and Universal Interface. One important distinction
is that when physicians are using our software, they don't need to interrupt
their normal workflow. We also eliminate the need to re-key data into an
Internet portal. This is critical to the physician and their administrative
staff who work in a very fast paced, unforgiving environment. They have the
advantage of continuing to use the practice management system they're
comfortable with. Medix provides physicians with a leading edge technology they
can easily embrace.
TWST: Where is it being used in the marketplace now?
Mr. Prufeta: Medix is just beginning to provide our software to doctors. We
currently have four customers in the initial testing phase. We recently
announced an important strategic relationship with WellPoint Health Networks,
which is a very large, national, managed care company based in California.
WellPoint was recognized by Fortune magazine as one of the country's finest
healthcare companies. We also work with Loyola University Medical Center in
Chicago, Advance Paradigm, which is one of the leading pharmacy benefit
management companies, and with Advica Health Resources, a well known and
respected physician intermediary company. In addition, we've now developed a
deep pipeline of prospective clients. We're excited about marketplace response
to our products.
TWST: How big is the marketplace?
Mr. Prufeta: The size of this market is expressed in a number of ways. I accept
the conventional wisdom that iHealth can affect about 25% of the $1.3 trillion
annual U.S. healthcare expenditure. There are also some very dramatic savings
that can be attained in the drug-to-drug interaction arena. We understand that
figure to be about $100 billion at this point. It's a huge and very exciting
opportunity, and one in which we sincerely believe Medix has a real competitive
advantage.
TWST: That is rather substantial.
Mr. Prufeta: Healthcare is, if not the largest vertical market in the U.S.,
certainly one of the top two. I think iHealth will prove to be a primary mover
in price sector-driven efforts to enhance the quality of healthcare and reduce
costs. I also believe that Medix will be a major player in this movement.
TWST: Who are you competing with in this space?
Mr. Prufeta: We view the competitive landscape as divided into two
categories. The first consists of organizations, like Medix, that address a full
host of administrative functions. This category includes Healtheon and
Abaton.com. In addition to these full service players, there are a number of
companies that address a single administrative function. For example, Allscripts
handles pharmacy transactions and ClaimsNet is involved primarily with claims.
We made a decision to carry a full array of iHealth functions because we believe
this is the best way to capture physicians' hearts and minds. We want to be the
universal standard such that whenever physicians are doing an Internet
transaction, they're using the Cymedix.com Universal Interface.
TWST: What do you have to do to get there?
Mr. Prufeta: Last year, we added three new board members, all of whom are
industry luminaries. We recruited Sam Havens. Sam ran Prudential Healthcare and
is a nationally recognized managed care executive. We brought in David Skinner,
M.D. David is the former vice chairman and chief executive officer of New York
Presbyterian Hospital. In addition to being an acclaimed health system
executive, David is one of the world's foremost physicians. Last, but not least,
we brought in John Lane. A former senior executive at J.P. Morgan, John brings a
much-needed Wall Street presence to our organization. Medix is fortunate to have
a board with such significant functional and general management expertise.
During the last quarter of 1999, we focused on organizing the technology,
building our product, enhancing governance, and building our management team.
We need to raise significant funds to build this company, satisfy existing
customers, and win new customers. We are currently in recruitment mode to
strengthen our management team and build a national network of specialists who
will place our technology with physicians. Additionally, one of our goals is to
have the most effective account management capacity in the industry.
We also need to build a stronger corporate image and build the Cymedix.com
brand. The Cymedix.com brand has tremendous potential. It is the only patented
iHealth product line available today. We need to capitalize on this and
establish Medix as a reliable, effective partner to our customer base.
TWST: As we look down the road, what kind of growth should investors expect from
the company?
Mr. Prufeta: We've been working on our business model and feel comfortable
tracking our growth well into 2002. We are not currently in a position to
release number as we're in the process of doing a financing.
TWST: What are analysts expecting?
Mr. Prufeta: We have not been accorded a whole lot of interest by Wall
Street. There is always a lag in awareness when a business is in a
transformation mode. Something is resonating out there because over the last two
months Medix has traded more than a million shares a day on average. In December
1999, this company was trading in the $0.38 to $0.50 range. Now, at the end of
February, we're at $5.75. So we really have delighted a lot of new investors in
the company, as well as investors who've been with us for awhile.
TWST: This move to the Internet is enough to keep you busy for awhile; you won't
have to go looking for other things to do I assume?
Mr. Prufeta: Let me give you some numbers to illustrate the absolutely
phenomenal market opportunity that exists in the iHealth marketspace. Let's
agree that the opportunity is in the $300 to $350 billion range in total, as I
stated earlier. It is our challenge to position ourselves to take advantage of
that opportunity. At this point, iHealth companies have captured, on a Internet
transaction basis, only a small fraction of the potential traffic. While there
are various reports on how many physicians are performing iHealth transactions
at this point, the fact is that there are 684,000 practicing physicians
nationally. Less than 20,000 physicians are connected at this point. This market
is wide open and I believe, absolutely, that Medix has the best products in the
industry. We have an extraordinary opportunity in a virtually untapped
marketplace.
The value of the Universal Interface does extend past the healthcare industry.
We can separate the Cymedix.com healthcare products from the core Universal
Interface technology platform and monetize the Universal Interface across many
industries; a technology that extracts data from any legacy system is of value
to many markets nationally and internationally. We will very selectively build
applications for our technology outside of our core healthcare offering.
TWST: Where else can you go with this?
Mr. Prufeta The likely places to explore are the financial services, and the
insurance and retail markets. We see our technology as solving a universal
problem: how to communicate with and transfer information between disparate
legacy systems. This problem is possibly more pronounced in the healthcare
industry, but it exists in every industry in the U.S.
TWST: Do you have a management team in place to do what you want to do?
Mr. Prufeta: We have a great management team in place and we are working to
build greater depth. Our team includes David Pfeil who is President and Chief
Operating Officer of the Cymedix subsidiary and Dave Kinsella, our Chief
Financial Officer.
TWST: As CEO where are you spending your time right now?
Mr. Prufeta: I'm focused on several key areas. First and foremost, I'm
committed to bringing in the right talent in all areas of the company. We need
an absolutely first rate team to take advantage of the tremendous opportunity
before us. I'm also working on securing a relationship with a top-flight
investment banking firm and closing a financing transaction that will bring in
the necessary financial fuel we need to grow rapidly. Additionally, I'm directly
a good deal of my effort on clarifying our value proposition to customers and
strategic partners. Last, but not least, I'm focused on creating a culture and
structure that will absolutely delight our customers, partners, and
shareholders.
TWST: How would you describe the culture that you are trying to develop?
Mr. Prufeta: A culture of cooperation is necessary to build an industry-wide
platform. We have a culture of great cooperation and teamwork. We want to be
recognized as a reliable partner that embraces our customers' problems and helps
them with opportunities. The reason we place so much emphasis on partnership is
because, together with our partners, we are essentially creating a new industry.
We want to build a strong industry with a strong value proposition for all
involved: physicians, hospitals, payors and Medix.
Speed is also essential. Speed to build relationships, anticipate needs, provide
solutions, and build a national presence.
In summary, the type of culture we're aiming for is one that engenders
cooperation, knowledge sharing, and problem solving.
TWST: Where do you stand with regard to your balance sheet? What do you have in
the way of cash and what is your burn rate?
Mr. Prufeta: We have adequate cash for the near term and our burn rate is
increasing as we build our team. We're also raising additional funds. We
estimate these conversions to yield about $6 million more. As I mentioned
earlier, we are also anticipating a financing and looking forward to raising
significantly more capital in the very near future.
We will invest heavily to quickly establish our "footprint" in the iHealth
marketplace.
TWST: For investors looking at the company what should they worry about? Where
is the risk in the story at this point?
Mr. Prufeta: We have all the risks of a new venture in e-commerce, some of which
I have alluded to above. However, we are unique. The market is $350 billion in
size and basically wide open. I think iHealth is an eminently investable
business segment; there's no question in my mind.
TWST: How do you feel about the value the market is currently putting on your
stock?
Mr. Prufeta: No CEO is ever happy with their company's valuation. So let me
respond by saying that we are not overly concerned with our stock price on a
moment to moment basis these days. We are focusing solely on building our team,
creating customer relationships and technology initiatives, enhancing our
product, and establishing our footprint. As we get our story out, institutional
investors as well as individuals will realize that we have an exciting,
investable opportunity at Medix Resources.
TWST: If you were sitting down with some potential investors, what two or three
reasons would you give them to go out and buy your stock today?
Mr. Prufeta: I would point emphatically to the huge market opportunity that
exists. Companies in this marketspace that excel have a fantastic opportunity to
build a very significant shareholder value. I would point to a unique and
compelling product; no one else has it and it's an absolutely perfect solution
for today in the Internet healthcare marketplace. I would also point to the
experience and the excellence of our management team, as well as the wisdom and
independence of our Board of Directors. Finally, Medix has an opportunity to
build an industry wide platform through our patented Universal Interface
Technology. We have built an internal culture that recognizes this opportunity
and is actively soliciting the partnership necessary to build the industry wide
platform.
TWST: It sounds like you're bringing something to the market that the market is
sorely in need of.
Mr. Prufeta: I have spent the last 14 years in the managed care industry and
much of the work I did was in turnarounds or on development projects in
technology and transaction processing. Medix provides a technology that
addresses the need for cost reduction, quality information, and connectivity
among key healthcare stakeholders.
TWST: Is there anything else we should have touched on and didn't?
Mr. Prufeta: I think we've had a very comprehensive discussion. Healthcare
is currently experiencing pivotal change. This change is brimming with
opportunity for Medix. The Medix products and technologies are certainly
positioned to meet healthcare's growing need for a common technology interface
platform to reduce costs, share information, and create opportunities to improve
patients' lives. One meaningful Medix product feature is the ability to provide
physicians with real-time drug interaction information. This will save lives! We
can replace an antiquated, inefficient system with an extremely efficient,
Internet-based methodology and move critical data across disparate legacy
systems. It's transformational. The entire U.S. economy has benefited greatly
from the technology revolution. Healthcare has been slow to adapt and adopt.
It's a large cottage industry with many historical impediments to providing
uniform information that is readily available to all participants. Medix offers
a common information platform and technology products with a compelling,
powerful value proposition.
TWST: Thank you.
