How Dr Scott Gallagher Became CEO of the “Goliath of Telemedicine”
When SOC Telemed acquired Dallas-based Access Physicians in March 2021, Access founder Dr. Chris Gallagher assumed his new role as integration evangelist. He continued to sell Access and its model to SOC executives and communicated the benefits of the acquisition to Access staff. But months later, he would take on the role of CEO of the newly merged company. So how did he get there?
Gallagher founded Access while in the middle of a cardiac electrophysiology scholarship while moonlighting in rural West Texas and fell in love with rural healthcare. He later became the chief physician of a rural hospital in East Texas and eventually formed a telemedicine group to provide rural hospitals with access to specialists who may not have been available locally. Founded in 2013, Access connects specialists to hospitals across the country. The group received no outside funding for years but grew organically and quickly enough to become an acquisition target.
The company worked with 600 specialists and subspecialists and developed telemedicine carts to put patients in contact with the providers they needed to consult. It is endorsed by the Texas Hospital Association and the Texas Organization of Rural and Community Hospitals for their work in telemedicine and has established partnerships across the country. Gallagher wanted to remain independent to develop the model and prove its viability. âWe needed uninterrupted time without any external influence to develop models that we believed were clinically relevant and could improve patient care and outcomes,â explains Gallagher.
In 2019, Access accepted $ 9.3 million in Series A funding from Health Enterprise Partners, a healthcare-focused private equity firm with financial backing from some of the world’s largest healthcare systems and plans. health of the country. At this point, the time started to turn to create a return for investors. Gallagher thought a transaction would be in the works within three to five years. Then the pandemic struck.
Remote care and telemedicine became widely accepted during the pandemic to reduce the spread of COVID-19, and Access has seen its growth accelerate. Before the end of 2020, the company had received inquiries about an acquisition. âWe had a conversation with SOC towards the end of this year, which intrigued us,â said Gallagher. âSOC was, for me personally, a pioneer. They are the Goliath of inpatient telemedicine and have inspired me since our inception. This is the one we are chasing.
Unbeknownst to Gallagher, he will soon be CEO of Goliath.
The $ 194 million acquisition created the largest national provider of acute care telemedicine and was complementary. Although they were competitive in some ways, Access had superior hardware while SOC had the most robust software. Each of the companies had minimal territorial overlap, thus facilitating the path to integration. The combined company provides acute telemedicine to nearly 1,000 facilities, including more than 700 hospitals in 47 states, valued at $ 790 million.
After the acquisition closed, Gallagher became President of Access Physicians, a division of SOC Telemed, and a member of the board of directors of the new company. He helped businesses come together by selling side to side, explaining best practices from both. He had not considered leading the SOC, but was committed to making the transition a success.
Months earlier, SOC had gone public through a SPAC, but the stock price has plunged since its IPO. A stock price that was at the high of 9 in November 2020 has since fallen sharply, losing about 80% of its value in less than a year. As a result, the board had to make a change and a new management team was put in place as part of a corporate reorganization. After just five months, Gallagher assumed the role of CEO at SOC on September 1.
The share price rose slightly after his appointment, but has continued to decline since. Gallagher, however, is hopeful of jumping into his new role. âIn any new role, you dive in and try to learn as quickly as possible,â says Gallagher. You master all facets of the organization, exploring the financial infrastructure, customer relationship structure, sales structure, existing culture, strengths and weaknesses, and people.
Gallagher recognizes the new challenges of leading an open company, with unique pressures to stabilize and eventually grow the business. He founded Access without funding. It had to pay off from day one, and he hopes to bring that level of efficiency and discipline to SOC as well. He wants to build on the legacy of the 17-year-old company to expand its services.
Although there are more entrants into the telehealth market, demand from hospitals has also skyrocketed. The pandemic has reduced the stigma on providers by bringing in specialists through telehealth, and he is optimistic about the future of the business he now runs.
âTelemedicine enables care in every hospital, and we already face a shortage of doctors and providers,â Gallagher. Now every hospital wants all needs to be met, which dramatically increases the demand as well. All of these interactions continue to make this a really exciting market in the end. “