Casemix Solutions Casemix For Quality and Efficiency in Healthcare

Casemix Solutions Sdn. Bhd. (‘CASEMIX’ or the ‘Company’) began as a research project by Universiti Kebangsaan Malaysia (UKM) academics seeking to develop software for healthcare providers that would effectively classify all patients based on the resources required to treat them. Four (4) years after the first prototype was completed in 2002, the Indonesian government successfully utilized the CASEMIX system to collect data essential for launching a national health insurance scheme.

Following this collaboration with the Indonesian government, which provided strong proof of concept, UKM incorporated the Company in 2011 to further refine the system and promote it for commercial use, obtaining full intellectual property (IP) rights to the system in the process. Five years later, the Company was sold to members of the original research team (referred to as ‘founders’ in the ‘Team’ section), who have since worked hard to make the CASEMIX system the top choice of healthcare providers in Malaysia and abroad.

Inefficient Allocation of Limited Healthcare Resources Due to Insufficient Information

Worldwide, even the most financially secure healthcare systems suffer from inefficiencies and the misallocation of resources: without accurate data such as, among many others, operating costs, patient demographics, and returns on capital investment, decision-makers cannot direct funding to the appropriate departments that need it the most or identify cost-saving opportunities. Over time, staff morale and the quality of care deteriorate – negative effects that are magnified in poor and developing countries with underfunded healthcare systems where resources are limited. 

Specialized Classification Software Simplifying Data Collection and Analysis for Healthcare Decision Makers

CASEMIX, as per its name, develops software that helps healthcare providers group clinical cases into 1,000+ categories (known as ‘Diagnosis Related Groups’) based on four main criteria:

The primary purpose of this classification software is to categorize patients based on the resources required for their treatment: patients in the same Group will utilize similar resources and, by extension, incur similar treatment costs. In turn, these classifications make it much easier to analyze patient data during performance reviews: the CASEMIX system automatically classifies cases based on the information entered, sparing busy healthcare workers from having to spend long hours studying the specifics of each case to determine the level of resources required.

Having calculated the costs involved in procuring the necessary resources to treat each Group, healthcare decision-makers may make use of this information for:

Effective Financial Planning
The CASEMIX classification system can be integrated with other enterprise software to ensure all relevant data collected by the healthcare provider (e.g. sales records, inventory purchases) is categorized accordingly. With historical data showing resource usage trends by each Group throughout the financial year, healthcare providers can confidently plan budgets and stock up on inventory well ahead of time.

Setting Reimbursement Rates 
Particularly Useful to Government Health Ministries seeking to launch National Health Financing Schemes. 

Knowing the exact cost of treating patients from each Group enables private healthcare providers to set fair reimbursement rates for treating insured patients in negotiation with insurance providers. This information is even more valuable to national-level healthcare decision-makers with ambitions to implement a national health Financing Scheme (NHFS) for all citizens of their country, who can average treatment costs nationwide to calculate the reimbursement rates healthcare providers are entitled to receive from the government when treating patients under NHI. 

Accurate Performance Evaluation
Detailed information on treatment costs for each Group can be studied alongside data on patient outcomes and the results of patient satisfaction surveys to accurately assess whether staff in a particular department are underperforming or overperforming relative to the amount of funding received. This helps the decision-makers to take the appropriate measures to improve performance and optimize efficiency.

Benchmarking Against Peers
Apart from reviewing their past performance, there is another way healthcare providers can identify areas for improvement – namely, compare their performance statistics with peers to discern exactly where they stand in the industry, then adopt peers’ best practices to raise their standards. CASEMIX classifications make such benchmarking easy by providing a universally recognized set of terms and concepts all industry players can refer to when studying each other’s reports and publications.

CASEMIX is proud to have supported the Indonesian Ministry of Health (Kemenkes) with launching their very own NHFS, known as Jaminan Kesehatan Nasional or JKN, in 2014 (refer to the ‘Traction’ section for more information). The Company is now in discussions with the Malaysian Ministry of Health (MOH) to explore plans to set up a similar scheme in this country, to offer its consultancy services for this project. 

CASEMIX provides its B2B clients with three main services, which are:

System Installation
After confirming engagement, CASEMIX will customize its flagship software to the client’s needs (clients may, on occasion, request for existing Group definitions to be modified or create entirely new classifications) and integrate the system with other enterprise systems used by the client to facilitate the systematic collection and analysis of standardized patient data.

Training for Users
Healthcare staff must understand how to properly operate the CASEMIX system to unlock its full potential. The Company offers user training as a separate service – that is, clients must pay separately for training on top of monthly licensing fees that grant them the right to use the system for the duration of the contract. Spanning the contract duration, the standard training course is Human Resources Development Corporation (HRD Corp) claimable, making CASEMIX services even more affordable to most of the Company’s Malaysian clients.

Data Consultancy (Optional)
Even with training, healthcare staff may not be knowledgeable enough to conduct an in-depth analysis of data collected from the system to apply the insights gained to advance a particular objective. CASEMIX’s data analytics and public health experts can assist clients with exactly that, with consultancy fees being determined by the scope of the project. 

Instrumental to the Development of Indonesia’s JKN Scheme

The CASEMIX system was first implemented in Indonesia in 2006, long before it was introduced to healthcare providers in Malaysia. In response to a request for assistance from Kemenkes, which was starting preparations for launching the JKN, the original CASEMIX research team from UKM implemented the classification system at 15 Indonesian hospitals to collect data on treatment costs, which would then be used by Kemenkes to calculate reimbursement rates for healthcare providers under the JKN.

Now adopted by 2,500+ healthcare providers across Indonesia, the CASEMIX system provided Kemenkes with invaluable information for the development of the JKN that would have been extremely difficult to obtain otherwise. Referring to the ‘Solution’ section, MOH policymakers, impressed by the results achieved by their Indonesian counterparts, have expressed interest in engaging CASEMIX for a similar purpose, which could prove highly lucrative for the Company.

Serving hospitals in Malaysia, With Plans to Onboard Many More Here and Abroad

Many leading players in the Malaysian healthcare industry recognize the effectiveness of the CASEMIX system and gladly pay monthly licensing fees under annual contracts for access. In a sign that growth opportunities remain abundant worldwide, the Company is also fielding inquiries from sales prospects in 20 emerging markets across Europe, Asia, Africa, and South America, including a healthcare education provider from Saudi Arabia that has already signed a Memorandum of Cooperation to indicate their interest.

Won Multiple Industry Excellence Awards

Clients aside, CASEMIX’s capabilities have also been acknowledged by the business community in general in the form of multiple industry excellence awards.

Wide Range of Applications for Collected Data

CASEMIX’s B2B clientele currently consists of healthcare providers and government health ministries; however, the data collected by the system has many more useful applications for parties such as:

Insurance Providers
Referring to the ‘Solution’ section, reimbursement rates for healthcare providers treating insured patients must be jointly agreed upon by both the healthcare provider and the insurance provider. CASEMIX may consider aggregating, anonymizing, and selling data on treatment costs (with the permission of data owners) to insurance providers in need of updated actual information to base their rate calculations.

Firms Providing Support Services to the Healthcare Sector
There is an entire ecosystem of businesses that exist to provide support services to healthcare providers. Examples include consultancies that specialize in the healthcare industry and developers of enterprise software for healthcare providers. Access to CASEMIX data would be highly beneficial to these businesses, which require precise insights into the problems faced by their clients to tailor their services accordingly.

Healthcare Users / Patients
Healthcare users may compare CASEMIX data on treatment costs from various healthcare providers with publicly available prices and reviews from previous patients to determine which healthcare providers offer the best value for money. For instance, they may not consider it worthwhile to visit a healthcare provider that charges high prices after discovering it incurs relatively low costs. CASEMIX is developing a B2C mobile application to cater to this market segment, with more details available in the ‘Business Model’ section below.

Our current customers are the Ministry of Health, National Health Insurance Operators, hospitals, and other healthcare facilities. 

We also engaged with the above countries to introduce our solutions since 2005.

Asset-Light Business Model Minimises Operating Costs
As a provider of digital solutions as well as training and consultancy services, all of which require few capital assets, CASEMIX is able to save on both capital expenditure and routine maintenance costs, which in turn drives up profit margins. Comparatively low operating costs also enhance the Company’s resilience as it does not need to spend as much to continue operating during challenging economic conditions.

Highly Scalable Business Model Maximises Growth Potential
The CASEMIX classification system can be easily customized to meet the needs of healthcare providers worldwide, giving the Company ample room for expansion. At the same time, the relatively low capital expenditure requirements of this digital-forward business model mean the Company is able to enter new markets without incurring hefty upfront costs, thus minimizing the risk of severe business disruptions stemming from cash flow issues.

Launching a B2C Mobile Application for Product and Revenue Diversification Purposes
Referring to the ‘Services’ section, CASEMIX currently derives revenue from:

• Software Licensing Fees: paid monthly by clients for the duration of the contract
• Training Fees: calculated based on the number of training participants
• Consultancy Fees are calculated based on the scope of the project.

The Company now seeks to add to its revenue streams with the development of a new B2C mobile application that will empower healthcare users to make informed choices when selecting healthcare providers. On the mobile app, which is 90% complete and scheduled to be launched, users can compare treatment costs, treatment prices, and service quality reviews (from previous patients) for healthcare providers across Malaysia, then book an appointment with the provider that best suits their needs.

Once launched, the B2C mobile app will provide CASEMIX with income in the form of:

• User Subscriptions
  • Users must pay a minimal monthly fee to be able to access core functions, and
     
• Advertising revenue  
  • The Company will provide space on the mobile app for all healthcare-related businesses to advertise their products and services to consumers for a fee.

Our business model is to provide solutions for the CASEMIX system including the development of software, consultancy services, and training.

There are three revenue streams in our business model:

1. Subscription model for the software and mobile application.
2. The transaction of data is processed through the system.
3. Advertisement of health facilities and health products in our applications.

Increased Healthcare Expenditure to Drive Demand for Services

Healthcare expenditure in emerging markets – a category which includes Malaysia, Indonesia, and most of the 20 countries considered promising expansion targets by CASEMIX – is projected to rise steadily until it reaches levels seen in developed economies. 

At present, developing nations in Southeast Asia spend only 3 – 5% of GDP on healthcare, far behind the US (19%) and European countries (12% on average). As healthcare expenditure increases to double-digit percentages of GDP, so will the number of healthcare providers, generating more demand for the valuable services CASEMIX provides.

The potential market for the Case Mix System spans across various sectors within the healthcare industry:

1. Healthcare Providers and Hospitals:
   • Hospitals and healthcare facilities are primary users of the CASEMIX system. They utilize this system for managing patient care, resource allocation, and understanding the complexity and costs associated with different patient populations.
   • The system helps hospitals optimize staffing, allocate resources effectively, and analyze healthcare delivery patterns.
2. Health Insurance Companies:
   • Insurers use the CASEMIX system to assess risk, predict costs, and determine appropriate reimbursement rates for healthcare providers. It assists in establishing fair payment structures based on the complexity of patient cases.
3. Government Health Agencies:
   • Government health departments or agencies often use CASEMIX systems to monitor healthcare quality, assess healthcare outcomes, and make policy decisions related to resource allocation, funding, and healthcare regulation.
4. Medical Researchers and Academia:
   • Researchers and academic institutions use the CASEMIX System for analyzing healthcare data, conducting studies on healthcare outcomes, and evaluating the effectiveness of different treatments or interventions.
5. Healthcare Technology Companies:
   • Companies developing healthcare software, analytics tools, and electronic health record systems integrate CASEMIX system algorithms to enhance their products' capabilities for healthcare data analysis and management.
6. Consulting Firms:
   • Consulting firms specializing in healthcare strategy, management, and optimization use CASEMIX system data to provide advisory services to hospitals and healthcare organizations to improve efficiency, reduce costs, and enhance patient care.

The CASEMIX system's market potential is significant due to its role in enhancing healthcare management, improving resource allocation, optimizing reimbursement structures, and supporting evidence-based decision-making across various stakeholders within the healthcare ecosystem. As healthcare systems evolve, the need for efficient patient classification systems like CASEMIX continues to grow, indicating a promising market for its applications and services. Currently, we are active in the ASEAN Region and have captured around 30% of the market in the region.

CASEMIX is the sole developer of clinical case classification systems for healthcare providers in the developing world, giving it an excellent first-mover advantage. Even if prospective clients in emerging markets are approached by Company peers based in developed economies (e.g. the US and Australia), the Company is confident it will continue to be the preferred choice of its target clientele due to:

More Versatile Than Alternatives
As shown in the table above, the CASEMIX system is unique in that its classifications can be easily customized to suit clients’ exact needs, crucial in serving an international clientele (as different countries will have different healthcare systems). The Company’s peers in developed countries will have to invest considerable time and resources into adapting their systems accordingly, by which time it will already have established a strong foothold in the developing world.

Unrivalled Affordability and Value for Money
CASEMIX enjoys lower labor costs than its counterparts in developed economies as it chiefly employs Malaysian talent, allowing the Company to pass these savings on to budget-conscious clients always searching for a bargain. This is especially pertinent when it comes to data consultancy services, which are typically only offered by a select few classification system developers at a very high price. By contrast, CASEMIX is able to deliver the same service quality at a much more affordable cost. 

CASEMIX targets raising RM500,000 to RM1,500,000 in exchange for 9.84% of equity at a pre-money valuation of RM13.7 million from this ECF exercise. 

The proceeds will be spent on:

CASEMIX expects to achieve the following results within the next three years provided it meets its funding targets for this ECF exercise. The Company may initiate more funding rounds in the future to fuel continued growth leading up to a Bursa Malaysia IPO scheduled to take place from 2030 onwards. With the needed funds for this next phase of expansion, below is the projected financial performance following the completion of ECF fundraising:

To become the leading provider of clinical case classification systems for healthcare providers worldwide. 

We have 5 full-time staff and 7 part-time Advisors and Consultants. The Advisors and Consultants are a combination of IT Experts and Medical Doctors with vast experience in the development and implementation of the CASEMIX system.

The Company seeks to raise a minimum of Ringgit Malaysia Five Hundred Thousand Only (RM500,000) and a maximum of Ringgit Malaysia One Million and Five Hundred Thousand Only (RM1,500,000) by way of equity crowdfunding on the pitchIN platform. 

1. pitchIN and its officers and staff may also be investing in this campaign
2. Under ECF Guidelines, valuation is determined and set by the Issuer. Investors are advised to carefully peruse all investment offers and documents before making investment decisions.