1. Issue:
October 15, 2012
All rights reserved!
ceocfointerviews.com
CEOCFO Magazine - The Most Powerful Name In Corporate News and Information
Net Medical Xpress is focused on the High Profile, Fast Moving and Fast Growing
“Telemedicine” Segment of the Health Care Industry and Providing Picture
Archiving Communication Systems (PACS) designed to be used by
Doctors and Radiologists when Evaluating Patients
Healthcare including Kodak, Apple Computer, patients. The system allows the dis-
Technology Services and Sun Microsystems. Govatski also play of medical views of images such
(OTCBB:NMXC) spent several years in systems devel- as x-rays, CT’s, MRI’s, ultrasounds
opment as President of Media Pub- and other modalities, so that we can
New Mexico Software lishing Group and built graphic appli- get better information to clinicians for
d/b/a Net Medical Xpress cations for companies including Fer- the critical health care segments.
5021 Indian School Road NE rari Color, Time Magazine, New York
Suite 100 Albuquerque, NM 87110 Daily News, and Getty Images. After CEOCFO: Would you tell us about
505-255-1999 creating the enterprise applications the state of telemedicine today and
www.nmxs.com or and e-commerce strategy at New where Net Medical fits and will con-
www.netmedical.com Mexico Software, Govatski took the tinue to fit in?
company public in August 1999. Mr. Govatski: Modern telemedicine
Govatski holds a Bachelor's of Sci- really started about ten years ago.
ence Degree in Communications from Earlier, there was the concept of the
Butler University, Indianapolis, Indi- AT&T Video Phone going back to the
ana, and is an active private pilot. sixties and seventies. Technologists
were working on ways that people
Company Profile: could think about developing tele-
Net Medical Xpress, a trade name of medicine from the standpoint of hav-
New Mexico Software, Inc. (OTC Bul- ing a doctor in one location and a pa-
letin Board NMXC), is a medical ser- tient and their local doctor in another
vices company that provides clinical location. This was initially facilitated
and diagnostic programs using ad- by that “video phone” concept.
vanced telemedicine solutions for ru-
ral hospitals. The company also de- Technology has progressed much
velops FDA 510(k) cleared all- faster in the last decade; in the sense
inclusive PACS products for the that we see it as more than just a vid-
Dick Govatski
medical market. eophone. Net Medical views tele-
CEO medicine as a way data needing to be
BIO: Interview conducted by: sent from a patient’s medical health
Lynn Fosse, Senior Editor record (required by a specialist) can
+Richard F. Govatski, CEO and
CEOCFO Magazine be done with a combination of digital
President
systems beginning with a “PACS Sys-
Govatski founded New Mexico Soft-
CEOCFO: Mr. Govatski, what is the tem”. A PACS is a Picture Archiving
ware (NMS) in 1995 after identifying
basic idea at Net Medical Xpress? Communications System.
market inefficiencies in how intellec-
tual property owners managed their Mr. Govatski: Net Medical is focused
on the high profile, fast moving, and A “PACS” is something that allows
image assets. Prior to NMS, Govatski
fast growing “Telemedicine” segment you to be able to exchange informa-
spent 18 years in systems integration tion from one hospital system to an-
and publishing, both in sales man- of the health care industry. The com-
pany provides FDA 510(k cleared other medical system, so that both
agement and software development. doctors at each end will be able to
Govatski led the sales teams for PACS (Picture Archiving Communica-
tion Systems) designed to be used by see the specific information about the
Popular Electronics, Computer Shop- patient and to determine what is hap-
per, Shutterbug, and MacWeek. He doctors, radiologists and other medi-
cal personnel to view, and evaluate pening to the patient. At the same
sold numerous solutions for vendors, time, we still have the videophone
1

2. concept in terms of cameras that are ioral medicine, the psychological Mr. Govatski: I think that many times
located at each end so that the patient kinds of emergency issues. executives and doctors in rural hospi-
can see the doctor and the doctor can tals are not as familiar with how the
see the patient. CEOCFO: What is the role that Net new technology works. It’s not some-
Medical is playing in the emergency thing that is widely used so the admin-
Today we go beyond a single point room setting? istrators and medical personnel are
connection to one that includes hun- Mr. Govatski: In the emergency room not going to understand the telemedi-
dreds or even several hundreds of setting we are dealing with a complete cine concepts as easily as they would
connections for many different hospi- clinical medicine management solu- be in working with PCs, for example.
tals and many doctors. We have an tion. We have our own physicians. Furthermore, they need to think about
intelligent switching system that is We have our own technology. We the ramifications of how to implement
able to manage the connections in- have our own operations center to this kind of system. It’s one of the
cluding user permissions so that a handle specific medical issues. The reasons why we developed our tele-
psychologist does not get to see what call center allows us to be able to an- medicine management solutions,
a cardiologist is doing at a hospital swer calls from our hospitals and we where we help hospitals to understand
that he isn’t even credentialed with, are setting up the required procedures the concepts much better. It’s one of
for example. for dealing with emergency ER and the things that has helped us market
ICU cases. to the ER directors and the adminis-
Once we have a video/audio connec- trators of these hospitals. We are
tion between a specialist and a pa- CEOCFO: How long has Net Medical helping them understand how this
tient, the patient is diagnosed and been providing these kinds of ser- technology can help and assist them
information about that patient is si- vices? in terms of providing better patient
multaneously put into a report. The Mr. Govatski: Net Medical has been care for their local communities and
report has to go back into the medical providing teleradiology services for most important having them keep
record and that happens through a eight years, after we developed our their patients in the rural hospital in-
number of different interfaces stead of transferring them to
that are all digitally intercon- We can deal with thousands of patients at a large urban hospital at great
nected. It’s all quite different hundreds of hospitals at the same time. In expense to the hospital, the
as to how telemedicine’s con- addition, we think we’ll be able to expand to patient and the patient’s fam-
cept was thirty or forty years other countries to provide the U.S. quality of ily.
ago when all you started with
care, which is still the best in the world.
was a “video phone” and a CEOCFO: It would seem, to
yellow pad. That is the differ- - Dick Govatski me, intuitively that if you can
ence between what is happen- XR-XPress medical PACS. We are have access to experts quickly, why
ing in terms of telemedicine today. building our specialist program, which wouldn’t you? It seems like a simple
is patterned after our diagnostic radi- concept. Why not?
Another concept to consider is that ology service, for which we now do Mr. Govatski: I think the answer to
there are a variety of telemedicine approximately 1,500 to 2,000 cases a your question is that some of this new
definitions that are used. One defini- day in 48 states. The specialist pro- technology; the smart phones, the
tion is in a clinical setting, and an- gram is the clinical part of our busi- video cameras, are associated in the
other definition is how telemedicine is ness. We only launched it on Febru- past with very expensive costs. It was
used in an emergency situation. ary first of this year. But we have ac- only in the past few years that a cam-
These are two different kinds of tele- tually been working on the develop- era system was a $50,000 expense.
medicine concepts; one that requires ment of this process for nearly two Today we can find high-resolution
emergency room use for the ER or years. We had our first pilot at Alta Internet cameras for as little as $300.
the ICU. This is the kind of telemedi- Vista Regional Hospital in Las Vegas, It has not been translated in terms of,
cine that is happening immediately, New Mexico. The program went ex- “Yes, we can afford this, we can do
within five or ten minutes, and the tremely well. We continue to service this, and we do not have to send the
other example is telemedicine in this rural hospital. Now we are begin- patient out to a trauma center two
which you are scheduling a physician ning to market our specialist program, hundred miles away in a helicopter
for appointments next Tuesday be- not only throughout New Mexico, but that is going to cost $40,000.” I think
tween 2 pm-5 pm for diabetes man- we are going into California, Texas, administrators and doctors will begin
agement. At Net Medical we are ex- Arizona, Missouri, Utah, Wyoming to make this happen in many of the
pressly interested in dealing with the and several other states. rural areas as more and more people
emergency type of telemedicine. We start to look at telemedicine scenar-
look at what I think of as the “three CEOCFO: When you approach a ios. It almost reminds me of when the
scary modalities”. I use that term be- hospital do they understand the con- Internet started. If you remember
cause it has to do with how you deal cept easily? What is the biggest ob- back 15 years ago, people said “why
with the heart, how you deal with the jection that you face and what is the would you ever use the Internet? It is
brain and how you deal with behav- most compelling selling point? never going to last.” However, tele-
2

3. medicine is going to be here to stay. days and to have a follow up from the Mr. Govatski: Word of mouth. That
It’ll be growing very quickly. same specialist a few days later, it seems to work from the standpoint of
was a tremendous relief to her parent reaching the hospitals that we are in
CEOCFO: Has the medical commu- to be able to know “everything is look- at the present time. People from other
nity, overall, started to embrace tele- ing good, your daughter is safe, she’s hospitals visit; people then learn
medicine in general? Has it just not going to be okay.” That’s the impor- about Net Medical from our existing
filtered down to the smaller hospitals tant thing that we have to look at in customers and the customers talk to
or is it still a concept that is not quite how our service helped in this one them and say “you have to go get in
mainstream? example. touch with this company because they
Mr. Govatski: I don’t think it’s main- have a pretty good approach when it
stream thinking yet, but it is getting CEOCFO: How do you attract doctors comes to telemedicine.” Secondarily,
closer every day. to work with you? and of course I do not want to mini-
Mr. Govatski: We have a medical mize this, is the fact that we have de-
CEOCFO: What, more specifically, staff headed up by Dr. John Tanner, veloped our own sales staff that is
are you providing to hospitals now? M.D., our chief medical officer, and able to deal with contractual issues
Mr. Govatski: Let’s take an example Dr. David McCraney, M.D., our chief and questions in the field. We’ve got
of this past weekend. We had a case neurologist, who help us to talk to two different approaches; word of
in one of the hospitals where a seven- their colleagues and their friends in mouth and our sales department that
year-old girl fell off a horse in a rural the medical area and have them sign talks to customers and prospects on a
community. She hit her head on a up with us to provide these types of regular basis.
fence. To make matters worse, the specialty examinations from a remote
horse was a bit nervous and kicked location. We train them on the tech- CEOCFO: What is the financial pic-
her in the head. When this young girl nology; how to use it, how to figure ture like for Net Medical Xpress to-
was brought into the hospital with her out the complexity of going from one day?
parents we were able to provide a camera to another camera, to be able Mr. Govatski: The financial picture is
consultation from a doctor located to do the reports and work with our really doing better. We have had an
250 miles away from where she had PACS and EMR systems. Our physi- interesting time over the last 14 years
her accident. The result of the exami- cians can do this from their office or as an OTCBB publicly traded com-
nation by the emergency room doctor from their home. We have even had a pany, as well as the last 17 years
was not enough, because in most patient examined while the doctor was since we have been in business. It
cases ER doctors only have about two traveling in his car. The doctor pulled has not always been that way, but it is
weeks of medical training on signifi- over to the side of the road and with getting better every day. We are fo-
cant neurological issues during their today’s smart tablet technology, he cused on our products, we’ve got a
entire medical training. They are was able to sign on and be able to terrific staff, we understand how it
trained in a different area of medicine. view the patient in the remote hospital works to provide service 24/7/365. I
However, the ER doctors can call up and do the diagnosis while stopped on like to say to our investors, “let’s not
our specialists, a neurologist in this the side of the road. look in the rear view mirror at what
case. The neurologist had a chance to has happened in the past. Focus on
talk to the little girl, her parents and CEOCFO: What is the competitive what is happening now and take a
the ER doctors and be able to satisfy landscape for you? Are there many look at a growing and fast moving
them that she was going to be okay, companies that have ventured into market place. It’s best to look forward
that the girl had a concussion in- this field with the amount of time and as to what this company is now able
volved but that there was no bleeding experience of Net Medical Xpress? to do.” This is a pretty exciting area
in the brain after examining the Cat Mr. Govatski: There are many com- for us. We are less than eight months
Scan (CT image). There were no se- panies beginning to get involved in into the specialist program, which we
rious ramifications, but it was certainly this market. There are companies like think is the biggest area of growth that
a relief and scary episode for that the Mayo Clinic, Banner Institute, uni- the company will see over the next
family. The family did not have to versities and other companies that several years.
transport their daughter to a level one provide these types of services. They
trauma center 250 miles away and to have their own approach. The meth- CEOCFO: Why should investors and
go through the expense of uprooting ods that Net Medical has developed people in the business community
the child to arrange transportation to are more scalable. We can deal with look at Net Medical Xpress? What
the trauma center, locate remote thousands of patients at hundreds of should people realize that is often
housing and find a way to deal with hospitals at the same time. In addi- overlooked?
the medical emergency outside of tion, we think we’ll be able to expand Mr. Govatski: What I would say to an
their immediate local area. This to other countries to provide the U.S. investor is that it is most important to
helped the community hospital pro- quality of care, which is still the best look beyond our current balance
vide better patient care. Armed with in the world. sheet. Look at several other areas.
the information that allowed that child Look at the fact that the telemedicine
to be able to stay at the rural facility CEOCFO: How do you reach poten- business is going to be a very, very
and mend over the next couple of tial customers? big growth area in the future, from
3

4. what we have seen happening with can provide that to investors, so they better patient care at a lower cost es-
the new customers signing on to our can begin to see why we are so ex- pecially with the reduction in reim-
service. Second, do an analysis of our cited with this emergency telemedi- bursements for Medicare and Medi-
product, call and ask for a demonstra- cine concept. The affordable health caid. Telemedicine is the recipe for a
tion of what the product looks like. We care act is going to affect hospitals. phenomenal growth area for Net
can do demos on a “net meeting.” We They are going to have to provide Medical.
New Mexico Software
d/b/a Net Medical Xpress
5021 Indian School Road NE
Suite 100 Albuquerque, NM 87110
505-255-1999
www.nmxs.com or www.netmedical.com
4