May 3, 2004
STATag
SBIR Presentation
Daniel Tubbs Brian Easton
Jason Sadler Latricia Simon
Joseph Williams Francis Doligosa
1

 Hospitals need to reduce costs to increase profitability
 From 1997 to 2001, spending on hospital care increased by $83.6 Billion 3
 Hospital gross margins have declined annually every year since 1997 3
 Wages & Benefits for nurses account for 36% of Hospital costs ($166.4 Billion) 3
2 May 3, 2004

Percent of Total Hospital Costs by
Type of Expense
17%
Wages &
Benefits
Other Products
(excluding Rx drugs)
Capital
5%
8%
57%
13%
Prescription
Drugs
Other Services
Cost of Caring: Key Drivers of Growth in Spending on Hospital Care , PriceWaterhouseCoopers, February 19, 2003 (Appendix C)
May 3, 2004 3

 3560% of a nurse’s time is wasted on 5
 Searching for equipment
 Clarifying orders
 Entering redundant information
 Wasting $58 - $99 Billion annually 6
May 3, 2004 4

 More difficult for hospital to maintain profitability as Baby Boomers retire 5
 Severe shortage of nurses

Will cause further salary increases
 Increased patients

Hospitals will be more busy
 Decreased reimbursements

Medicare/Medicaid reimburses at only 45%

Private health insurance reimburses at 80-90%
May 3, 2004 5

The use of STATags will:
 Reduce man hours searching for needed equipment
 Lower operating costs
 Save a real $1 for every $4 of efficiency gained 7
(Reduction of overtime, increased turnaround, etc.)
 Increase staff efficiency

Increase a nurse’s efficiency at least 10% 5
May 3, 2004 6

Industry Opinion
“Brilliant Idea”
- Cindy Jimmerson, founder of reVIEW
(Realizing Exceptional Value in Everyday
Work), and National Lecturer on Hospital
Efficiency
May 3, 2004 7

•Default screen presents the user with a list of items that can be queried
•User selects item and selects ‘Query Nearest
Device’ to locate that closest particular item
An ‘Administrative Use’ button is also available for authorized personnel to make any necessary maintenance to the system
May 3, 2004 8

Following query execution, the next screen presents a map of the facility and the location of the nearest queried item
9 May 3, 2004

STATag
STATag
STATag
User
`
Web Browser
Network Coordinator DB Server
Internal Webserver
STATag
STATag
May 3, 2004
Database
10

Battery
802.15.4 Module
Microcontoller
Usage Module
(In use switch)
Movement Detection
Module
(Gyroscopes &
Accelrometers)
Flash RAM (1MB)
Tamper Detection Module
(Tag Removed Switch)
May 3, 2004 11

Software Interface
(STATag – Server)
 General Specifications
 All STATags have a unique ID
 STATags transmit their location periodically or when queried
 STATag location data is stored in the database by STATag ID
 Software interface updates the database using
SQL
12 May 3, 2004

 Allows for fast lookups
 User selects type equipment to locate
 Query is sent to web server
 Web server retrieves the locations of the closest pieces of equipment of the selected type
 Positions are displayed on a map for the user
13 May 3, 2004

Underlying Interface Abstraction
 Installation associates the equipment’s serial number and equipment type with the
STATag’s unique ID


Equipment type queries return all STATag IDs associated with the requested type
Each STATag’s location is compared to the requester’s location
 Location of the closest STATag not in use is returned
14 May 3, 2004

Create a Real-Time Equipment Tracking system using STATags that increases staff efficiency and allows hospitals to reduce operating costs
May 3, 2004 15

STATags will:
 Use “Dead Reckoning” to determine current location
 Use network security
 Self-discover & self-configure network
 Handle large quantities of equipment
May 3, 2004 16

STATags will (continued):
 Activate Alarms
 Store historical location and usage data
 Run without intervention for long periods
 Battery lasts 5-7 years
 Need calibration only when battery is changed
May 3, 2004 17

 Prevent theft
 Collect or transmit personally identifiable health information (covered under HIPAA)
 Communicate further than 100 feet between
STATags
May 3, 2004 18

 Interference with hospital monitoring equipment
 STATag transmits 1% the power of other safe wireless devices
 Most major Hospitals are implementing WiFi
 Conflicts with other 2.4 GHz networks
 802.15.4 has been designed for interoperability
 802.15.4 and ZigBee are new standards and therefore there maybe unknown issues
 Hardware issues are being resolved by manufactures
 Software issues will be correctable by patching
19 May 3, 2004

 The management plan encapsulates the following:
 Program management overview
 Management structure
 Project team
 Project planning
 Financial management
 Management reviews
May 3, 2004 20

Project Lead /
Computer
Engineer
Daniel Tubbs
Manufacturing
Director
Francis Doligosa
Personnel
Director
Joseph Williams
Marketing
& Web
Development
Jason Sadler
R&D / QA
Latricia Simon
Financial
Director
Brian Easton
Inventory
Manager
Installation
Engineers
Help Desk
Coordinator
Development
Staff
Technical
Writer
Sales
Manager
Graphics
Designer
Computer
Engineer
Drafter Office Manager
Support
Staff
Accounts
Manager
Accounts
Receivable
21 May 3, 2004
Salesmen

May 3, 2004 22

May 3, 2004 23

May 3, 2004 24

May 3, 2004 25

May 3, 2004 26

 Monitor milestones
 Track budget and schedule
 Monitor quality assurance
 Track customer impact and satisfaction
 Evaluate areas for improvements
May 3, 2004 27

 Target market: US Hospitals
 Installation cost: approximately $392,000
 The hospital will recover the installation cost in only 7.5 months
 The hospital will save $6.1 Million over 10 years
 Sold via direct sales
May 3, 2004 28

Our target market is US hospitals:
 Hospitals: 5,794 2
 Total Registered Beds: 975,962 2
 Estimated mobile medical equipment in US:
Approximately 10 Million 4
 Potential future market: International hospitals
29 May 3, 2004

 Hospital equipment is very expensive and highly mobile
 Equipment tracking is a large problem that causes:
 Time consuming equipment searches
 Unnecessary equipment purchases
 Locating equipment is one of the Top 10 most wasteful hospital activities 7
30 May 3, 2004

Cost of Tags:
Server Costs * :
Installation Engineer:
Travel Fees * :
Labor Cost * :
TOTAL
$336,800
$40,000
$4,000
$5,000
$6,300
$392,100
*Supplied by the hospital
May 3, 2004 31

Hospital Annual Cost and Savings
 Annual Cost: $60,600
 Estimated 1.5% growth and replacement per month
 First Year Savings: $263,300
 Annual Savings: $655,500
May 3, 2004 32

Total Savings
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
May 3, 2004
$2,885,524
1
$263,330
2
$918,878
3
$1,574,427
4
$2,229,975
5
Year
6
$3,541,072
7
$4,196,620
8
$4,852,169
9
$5,507,717
10
$6,163,266
Total Savings
33

 Phase 1 – $100,000 SBIR Phase 1 Grant
 Phase 2 – $750,000 SBIR Phase 2 Grant
 Phase 3 – $200,000 SBA Loan
 Break even point – August 15, 2006
 Net Profit as of December 31, 2007
$76.4 Million
May 3, 2004 34

Operating Expenses ($162,500)
Income from New STATag Sales $6,737,700
Income from Recurring STATag Sales $1,369,400
Income from Installation
Monthly Profit Margin
$80,000
$8,024,600


Market Share: 4.7%
Recurring Sales 8.4 times Operating Expenses
*Predicted for December, 2007
May 3, 2004 35

Balance
$700,000.00
$600,000.00
$500,000.00
$400,000.00
$300,000.00
$200,000.00
$100,000.00
$0.00
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May 3, 2004
Balance
36

Balance
$90,000,000.00
$80,000,000.00
$76,672,141.46
$70,000,000.00
$60,000,000.00
$50,000,000.00
$40,000,000.00
$30,000,000.00
$20,000,000.00
$10,000,000.00
$0.00
$70,331,538.42
$64,092,001.53
$57,953,530.78
$51,969,526.16
$46,033,187.68
$40,197,915.33
$34,463,709.13
$28,830,569.06
$23,351,895.12
$18,434,218.02
$14,120,831.12
$10,401,627.82
$7,319,901.50
$4,758,745.56
$2,761,453.36
Jul,
2006
Aug,
2006
Sep,
2006
Oct,
2006
Nov,
2006
Dec,
2006
Jan,
2007
Feb,
2007
Mar,
2007
Apr,
2007
May,
2007
Jun,
2007
Jul,
2007
Aug,
2007
Sep,
2007
Oct,
2007
Nov,
2007
Dec,
2007
Balance
May 3, 2004 37

 Rent
 Utilities
 Office Furniture
 Computers & Software
 Electrical Engineering Equipment
 Prototype Parts
May 3, 2004 38

 Rent
 Utilities
 Office Furniture
 Computers & Software
 Advertising
 Lab Servers & Workstations
 Production Costs
 FCC Approval
May 3, 2004 39

 Rent
 Utilities
 Office Furniture
 Computers & Software
 Advertising
 Production Costs
May 3, 2004 40

 Hires
 None
 Contractors
 Drafter
 Computer Engineer
May 3, 2004 41

 Hires
 Office Manager
 Software Engineer, Level 2
 Installation Engineer
 Network Engineer
 Contractors
 Lawyer
 Technical Writer
May 3, 2004 42



Hires
 Account Manager









Accounts Recievable
Lead Installation Engineer
Installation Engineers (5)
Help Desk Coordinator
Tech Support (3)
Sales Manager
Salesmen (6)
Software Engineers, Level 1 (3)
Inventory Manager
Contractors
 None
May 3, 2004 43

Phase 1
Phase 2
Phase 3
Total
$96,600
$836,000
$3,431,600
$4,364,200
May 3, 2004 44

2004 – $207,000 Phases 0 & 1
Complete
2005 – $505,500 Production Sample
Complete, FCC Testing
Complete
2006 – $1,599,100 Phase 2 Complete,
Full Production, Installed in 43 hospitals
2007 – $2,052,600 Installed in 271 hospitals
Total $4,364,200
45 May 3, 2004

Office Space 2600 Sq. Feet
Utilities
Telephone/Internet
Office Furniture
Electrical Eng. Equipment
Office Computers
Peachtree 2004
Network / Server
MS Visio / MS Project
Web Site Hosting
Prototype Parts
Total
$7,200
$2,000
$1,600
$6,000
$2,500
$8,000
$1,000
$3,500
$3,000
$200
$1,000
$36,000
May 3, 2004 46

Francis Deligosa - Manufacturing Director
Daniel Tubbs - Team Manager / Computer Engineer
Joseph Williams - Personnel Manager
Latricia Simon - R & D Manager / QA Manager
Brian Easton - Finance Officer
Jason Sadler - Marketing Director
Drafter (plastic parts)
Computer Engineer
Total
$9,000
$9,000
$9,000
$9,000
$9,000
$9,000
$600
$6,000
$60,600
May 3, 2004 47

Office Space 2600 Sq. Feet
Utilities
Office Furniture
Network / Server
Web Site Hosting
Trade Show Booth Rental
Airfare to Tradeshow
Entertainment
Test DB Server
Plastic Tooling
Test Run
FCC Approval Testing
Total
$30,600 Car Rental
$8,500 Telephone/Internet
$6,000 Office Computers
$6,000 Development Software
$850 Graphics Designer
$30,000 Trade Magazine Ad
$4,000 Hotel
$1,000 Test WWW Server
$2,500 Test Workstations
$40,000 Production Engineering
$5,000 Error Reporting Software
$20,000
$264,750
$400
$6,800
$12,000
$8,000
$1,600
$55,000
$1,000
$2,500
$3,000
$15,000
$5,000
May 3, 2004 48

Daniel Tubbs - Team Manager
Joseph Williams - Personnel manager
Brian Easton - Finance Manager
Latricia Simon - R&D Manager / QA Manager
Jason Sadler - Marketing Director
Francis Deligosa - Manufacturing Director
Office Manager
Lawyer
Software Engineer 2
Technical Writer
Installation Engineer
Network Engineer
Total
May 3, 2004
$68,000
$59,500
$59,500
$59,500
$59,500
$59,500
$42,500
$8,750
$54,000
$76,500
$12,000
$12,000
$571,250
49

Office Space 6000 Sq. Feet
Utilities
Telephone/Internet
Office Furniture
Office Computers
Network / Server
Development Software
Web Site Hosting
Trade Show Booth Rental
Trade Magazine Ad
Airfare to Tradeshow
Car Rental
Hotel
Entertainment
Ticket Tracking Software
Retool Plastic Mold
Total
$80,000
$20,000
$12,000
$10,000
$20,000
$10,000
$10,000
$1,000
$120,000
$44,000
$32,000
$1,600
$8,000
$8,000
$5,000
$320,000
$701,600
May 3, 2004 50

Daniel Tubbs - Team Manager
Joseph Williams - Personnel manager
Latricia Simon - R&D Manager / QA Manager
Brian Easton - Finance Manager
Jason Sadler - Marketing Director
Francis Delegosa - Manufacturing Director
Office Manager
Accounts Manager
Accounts Receivable
Lead Installation Engineer
Installation Engineers (6)
Help Desk Coordinator
Tech Support (3)
Sales Manager
Salesmen (6)
Software Engineers 1 (3)
Inventory Manager
Total
$100,000
$80,000
$80,000
$80,000
$80,000
$80,000
$70,000
$80,000
$70,000
$100,000
$540,000
$60,000
$150,000
$140,000
$720,000
$240,000
$60,000
$2,730,000
May 3, 2004 51

1 $462,221,560,000 2 x 57% 3 (all wages & Benefits) x
63% 3 (nurses wages & benefits)
2 Hospital Statistics, 2004 edition, American Hospital
Association, as reported by the American Hospital
Association website (Appendix B)
3 Cost of Caring: Key Drivers of Growth in Spending on
Hospital Care , PriceWaterhouseCoopers, February
19, 2003 (Appendix C)
4 975,962 2 Beds x 10 Mobile Medical Devices per bed =
9.76 Million Mobile Medical Devices
52 May 3, 2004

5 Cindy Jimmerson, April 7, 2004
6 $166 Billion (Nurse’s Salary and Benefits) 1 x
35% = $58 Billion
$166 Billion (Nurse’s Salary and Benefits) 1 x
60% = $99 Billion
7 Murphy, Mark: Eliminating Wasteful Work in
Hospitals Improves Margin, Quality, and
Culture (Appendix D)
May 3, 2004 53

May 3, 2004 54