M*MODAL COMMENTS IN TN PAPER - FORUM USER

M*Modal participates in the market where pricing has dropped by 35% below what M*Modal needs to sustain. M*Modal has heavy cost structure with debt load and G&A which will prevent it from being cost effective in Transcription Out-sourcing market.

M*Modal has also pursued a technology solution model similar to Nuance where clinical documentation review/edit/accuracy function is being transitioned to physicians using Fluency by M*Modal and Dragon 360 by Nuance. The ineffectiveness of this approach lies with the fact physician time is well spent treating patients rather than correcting clinical documentation. The old cliché of only pharmacists can read physicians writing applies here.

M*Modal purchased Spheris out of Chapter 11 and uses Franklin TN office of Spheris but quickly forgot the lessons of why Spheris failed. This is evident when your debt grows from less than 50% of the gross revenue to 166% of the gross revenue with 3,600 customers.

The fundamental change in strategy is needed so that cost of service is lowered by 20% - 30% else in next few years this scenario will repeat. M*Modal is living off CHS, CHI and IMH but these clients are struggling with their own bottom lines. If M*Modal can lower its cost of service to them the long term captive revenue will materialize.

M*Modal beyond all financial expert needs a transcription out-sourcing restructuring expert to FIX THEM for a long haul.

Hope this helps.