Replies to post #3139 on Deaf-Talk Inc. (fka MGQG)

[TownScapes]

Yeah, it's been mentioned a few times but I don't think it's necessarily a concensus.

[mrholty]

I could actually expect revs to be between $6 and $12M annually but I am expecting it to be in the $6-9M range.

Here is how I got to $6M in revenue.

400 hospitals x 2 machines/hospital on average = 800 units.
800 units x $450/month fee for machine x 12 months = $4,320,000 in base revenue.

Based on a linked sheet from NH Medicare back in October/November they referenced a Deaf-talk rate of $3.00/minute per service and an average usage of 60-70 minutes per month of use.
800 units x 60 minutes x $3.00 x 12 months = $1,728,000.

That would put revs right about $6M annually. This assumes nothing for interpretive services and uses what I consider to be a conservative usage for minutes.

To spotcheck if these assumptions are correct go to their website. BTW, much of the website has been updated and is cleaner and easier to use. Here is what is says under FAQ:

Over half our customers initially start with two or more units. In general, this decision is driven by the amount the hospital currently spends on onsite ASL interpreters. Many of our customers spend in excess of $30,000/year.

Our customers find they need at least one unit for the emergency department. This is where their staff has the greatest problem in getting certified interpreters on a timely basis. This is where they find the greatest medical need. This is where they feel they must provide the same timely response to communicate properly with deaf patients as they do with hearing patients, in accordance with the directives of the ADA.

The second unit is most often dedicated to pre/post operative suites and to patient rooms. Hospitals tell us that they incur very high costs for very short periods of actual interpreting time in these areas.

and

What are the economics of Deaf-Talk/DT Interpreting?
Generally our customers tell us that DT/DTI is half to two thirds of the cost they currently spend for on-site interpreting for unexpected situations.

Many of our clients spend over $30,000/year on on-site ASL interpreters. They often pay rates in excess of $60/hour. They pay for travel time. The often are required to pay on-site interpreters a minimum session fee of two hours, making the total "call out fee" roughly $150. They also incur premium charges for sessions that are not scheduled well in advance -- and all sessions required for the emergency department are "unscheduled". The typical interpreting session is actually very short: the average session is about 15 minutes. Therefore the amount hospitals pay for the actual interpreting as a result of a two-hour minimum call out fee is very high.

My math shows that with two machines they would be paying $15-$16k/hospital annually. If you use the second quote that states hospital savings are between 50-66% then based on $30k you would exect to see costs in the $12-$15k range. This further puts my estimate of $6-9M in the sweet spot and shows how if they can grow revenues at 15-30%/annually how this can be a great business. The recent additions into local police forces is a natural addition along with the court system. There are a few other major kickers that are in part of the Federal Government which could be game changers if they added this service and Deaf-talk were selected but I am not expecting them.