All right. Let's go ahead and get started. I want to thank everyone for coming this afternoon. Thanks for joining us here in San Diego. I know it's the end of a long what's been a long week or multiple weeks for some of you.
And thank you to everyone joining us on the webcast as well. And we're looking forward to sharing the next couple of hours with you to share some more information about ResMed, specifically in some of our recent acquisitions and around our long term strategy. I think we've got a great lineup for you this afternoon, so looking forward to that. Just a couple of housekeeping items for you. As a reminder, forward looking statements subject to risks and uncertainties, actual results could differ.
Rod's going to cover the agenda, but before we get into that, just want to let everyone know after prepared remarks, we will host a Q and A session. For the folks in the room, just raise your hand and wait for us to bring a mic over. We would like to capture that for the transcript. We are recording this, and we'll post the transcript and the webcast replay after the event is over. For everyone listening online, we are using an application today called Slido.
The instructions and the link to the app are available on the webcast page. So you can submit questions, and then we will relay those to the panelists to answer as well. So with that, I'd like to go ahead and turn the meeting over to Rob Douglas, our President and Chief Operating Officer. Thanks.
Thank you, Amy. Welcome, everyone. It's great to have you here. We really appreciate you coming here on a fairly short notice that we organized this session, but we knew many of you were going to be in the region and it was a great opportunity to get together and talk about a few of the key issues that we've got going on. In fact because of that short notice, Mick Farrell, our CEO was on already a prearranged trip in South America.
So he's unable to be with us today. So now I'd also like to say welcome to everyone on the webcast, and thank you so much for joining us. Our purpose today really is to provide some more information based on some feedback that we had around people wanting to know more about some of the deals and some of the projects that we've been doing lately. So our aim really is to provide clarity on our joint venture with Verily and how that's going to help our sleep business, Our acquisition of Propeller and how that is going to support and enable a much broader respiratory care strategy and also our acquisition of MatrixCare and we're going to explain to you how that's actually we're building out a portfolio of really good cloud based software businesses that not only will grow in their own right but also provide strong support back to the existing ResMed businesses in our sleep and respiratory care businesses. All of these acquisitions support ResMed's 2025 strategy and position us for long term growth and value creation.
I want to be very clear that we're not presenting what we typically would do would be an overview of the full business and how all that's going. But be absolutely sure that gets an awful lot of focus in the company and we're really driving there and very pleased with the our rate of patient acquisition through the whole system and our shorter term mission of changing 20,000,000 lives by 2020 is still an important thing for us. Now however, we have updated our strategy lately, and we talked about we've been talking about this year, and we've developed a 2025 strategy. And like any strategy, it's not a one off, we write a book and that's it. This is sort of the direction where we're heading.
There's more development to go and we'll continue to clarify this for you as we develop where it is. We are going to really be driven in our strategy by really a number of macro and micro trends. And we're really in the right spot on these macro trends. There's a lot of change in healthcare and it's going to continue to change. And you know, the drivers of the change and we'll hear more on this from Raj, but the drivers of the change around the demographics, which is mainly aging population, you know, the impact of chronic diseases, where they're going, the issue of health care costs, which are massive, and the whole issue of skills in the health system, That is creating a big opportunity for us.
And in the very specific health systems that we're in now, they're all struggling with issues around cost trajectories, delivery and quality of care, getting those in the right place. And all of those provide responses and system responses that mean you need more documentation and more proof, more data, more role for analytics and more communication around that. So this is sort of setting the environment for our 2025 strategy. And our vision of our strategy is that we're going to empower people to live healthy lives in their homes and out of hospital. There's going to be an awful lot of development of healthcare in the hospital, and our focus really is in the out of hospital settings.
We're going to continue our focus on the major health epidemics that we've been working on and we know so well. So sleep apnea is really important to us and stays important to us. COPD is also really important and other chronic conditions. You'll hear us start to talk a little bit about asthma and a few others over the coming time. And the way patients are managed and the way these health systems are managed and these therapies are managed, we think we can have a big impact on with our software and cloud software strategy.
We've got a really strong advantage in this. It's our knowledge of these chronic conditions. We've been treating them for decades at this stage. And our understanding of the technology and the difference that software and cloud technology can make to the outcomes of how you manage these patients. And then we've got a very strong management framework and leadership framework in the company for the team of how we're operating.
We're really driving innovation and we're continuing to invest heavily in the digital health. As I said, the outcome of this strategy, I talked earlier we were at 20,000,000 lives. In 2025, we're talking about 250,000,000 lives. We're going to improve them through our out of hospital healthcare on therapies and on software and solutions that support them through those therapies. This is a growth strategy.
Now we're going to talk a little more about sleep. I'm going to ask Haynes to join me in a minute, but I just wanted to emphasize first sleep is our core business. It's a huge underpenetrated growth opportunity. There are over 900,000,000 patients, maybe 20,000,000 of them are treated today. It's a great opportunity.
As Mick Farrell said recently, we eat, breathe and dream about sleep. That really is what we focus on. It's just that that's not the bulk of what we're talking about today. But most of our R and D, most of our marketing investments are around opportunities in sleep. Jim Hollingshead, who's President of our sleep business, leads a really strong team.
He's got a great project pipeline, product pipeline, a great market roadmap, and there'll be a lot more to come in that. Our joint venture with Verily is just one of those key projects that we're engaged in looking at ways to expand the market and our position in the market for treating these sleep apnea patients. So I'd like to hand over to Hayman Thready, who is our Head of our Strategy Organization. He's our Chief Strategy Officer. He's been heavily involved in the development of the Verily JV and he's going to give us an update on
that. Thanks, Hayman. Can folks hear me okay? Great. So as many of you will know Verily is the Alphabet Life Sciences arm with a specific mission of collecting, organizing and activating health data around the world so as to improve the lives of people around the world, improve health.
They have a partnering business model. And so they've been partnering with a number of companies in various life science and healthcare sectors. And fundamentally, what they do is they bring deep technology, data science expertise and combine that with domain expertise of their partners to drive innovation in various healthcare sectors. We formed a joint venture with them focused on sleep apnea that kicked off in the last quarter. And I've been, as ResMed's Chief Strategy Officer deeply involved with its design and formation.
I currently sit on its the JV's Joint Steering Committee along with 2 other ResMed colleagues. And I'm also an observer on the Board of the joint venture. And so what I'd like to do is take you through what this joint venture is about and what we're trying to do with it. But before we go there, it's really important for us to set the context around the patients, the sleep apnea sufferers around the world who really motivated the formation of this joint venture. As we've shared with you previously, sleep apnea is a hugely prevalent chronic condition around the world.
The latest studies indicate that 936,000,000 people around the world suffer from sleep apnea, 54,000,000 people in the U. S. Alone suffer from sleep apnea. So what happens to these sleep apnea sufferers? And these are folks who are chronically deprived of healthy and restorative sleep.
As we've shared on various occasions in the past, these individuals suffocate for 10 seconds or more every few minutes for several hours as they're sleeping throughout the night. And there's a repetitive suffocation, the consequent oxygen desaturation, and the sequence of rescue responses that are triggered and cascade as a result of that create enormous stress and strain on these individuals' bodies while they're sleeping. Therefore, sleep apnea is associated with many of the major chronic conditions that folks are trying to address very deeply around the world, whether it's atrial fibrillation, heart failure, diabetes, hypertension, stroke, depression, the major cardiovascular conditions, the major metabolic conditions, the major urological conditions are all associated with sleep apnea. Unfortunately, most people who have sleep apnea don't know they have it. They're unaware of the fact that they have it.
They're unaware of the consequences of having sleep apnea untreated to their health. They're fundamentally unaware of the benefits of treating sleep apnea for themselves, for their loved ones, for their workplaces and for society overall. Even if folks suspect that they may have sleep apnea, they choose not to get diagnosed or treated because they have potentially dated views about what it takes to get diagnosed or what it takes to get treated. They don't know that they can get diagnosed in the comfort of their homes. They don't know that the therapy is quieter than the ambient noise in most rooms.
They don't know that it's much more comfortable now than it's been in previous years. And so the vast majority of individuals with sleep apnea remain untreated. We've had various initiatives at ResMed over the years to move the needle on diagnosis at rates and on therapy adoption. And we enjoy relatively healthy growth rates in our market relative to other healthcare segments. But the vast majority of sleep apnea patients remain untreated.
And that's fundamentally what we're trying to do with this JV, which is bring new solutions to this long existing opportunity we've had as a company. Our JV with Verily is fundamentally focused on innovating to support sleep apnea sufferers. And what it does is it'll leverage the capabilities and strengths that ResMed have in terms of deep scientific clinical and market knowledge around sleep apnea, combined with Verily's deep expertise given its heritage and its roots in advanced analytics, predictive modeling, machine learning and software techniques applied to healthcare. And collectively, what we want to do is we want to bring new approaches. We want to uncover new insights and bring new approaches to support sleep apnea sufferers from that pre awareness to awareness to guide them to ultimately get diagnosed and treated.
We're specifically focused on 3 major areas to be able to do that. Big data research, fundamentally focused on generating real world evidence to demonstrate the value and effectiveness of sleep apnea treatment. Secondly, identification and engagement solutions. What we want to do here is bring the best of technology to better identify folks who are at risk of sleep apnea, help educate and make them aware of their sleep apnea and guide them systematically lead through a process to get diagnosed and treated. And we want to do this in a way that's personalized, that's tailored, that's seamless, that reduces many of the frictions these individuals currently face, but also be able to do that at scale.
And the 3rd major opportunity for us is to collaborate with other potential Verily partners in addressing sleep apnea among their populations. So I'll cover a bit more about each of these three areas, but please know that we're in the very early stages of this JV formation. We've we're literally a few months in, and so there's plenty of details to still be worked through. But what I'll cover in the next little bit hopefully gives you a sense for the kinds of things that we're looking to achieve through this joint venture. So first, starting with big data research.
We've shared with you on numerous occasions the activity that we've been doing in this space. We are a leader in generating actionable insights from big data in sleep apnea. And we generate insights as it relates to efficiency, but fundamentally better patient outcomes as well. We've accumulated over 3,500,000,000 nights of sleep therapy data, and that number continues to grow on a daily basis in the millions. And we are constantly looking through that data as a way to generate even more insights to better treat individuals, to improve our therapies, but also improve the effectiveness of the care that they get.
And here are a couple of examples of studies that we've shared with you in the past, one that looks at data from over 200,000 central sleep apnea patients, another with over 128,000 patients. So you can appreciate the scale at which we're looking at these big data assets and trying to generate insights to help us improve sleep apnea therapy. But fundamentally, we're barely scratching the surface in terms of the insights that we can generate from this rich data set that we have. And we'll continue to make progress towards generating insights from the data that we have. However, the data that we have, one way to think about it is it's a really deep data well.
It's data about therapy usage of ResMed therapies. It's data about how one sleeps and breathes while they're on ResMed therapy, and therefore is constrained in terms of the range of things we can learn from it. In order to learn even richer insights about how one's health is
fundamentally benefited from sleep apnea therapy, how the cost
of care is fundamentally benefited from sleep apnea therapy, how the cost of care is fundamentally improved if one is on sleep apnea therapy, we need access to much broader multidimensional data, data about one's health, data about one's environmental context, social context, data about their healthcare utilization, how they're dealing with other conditions. And that's where the partnership with Verity becomes really interesting. As you may know, Verity is aggregating such multidimensional data lakes, trying to analyze them, organize them and unlock value and activate healthcare benefits while lowering costs for individuals. An example of such a project is Project Baseline. Project Baseline is a landmark longitudinal observational study that Verily is undertaking.
They're looking to recruit and have 10,000 participants in the study and track them over 4 years. The objectives of the study really is to establish a baseline for good health and to track with much earlier precision than we currently can the transition from good health to disease and the risk factors associated with that across a whole range of chronic conditions. They're doing this in a way that really is at the forefront of bringing technology to bear in healthcare. They are collecting a vast amount of data on any given individual, molecular data, imaging data, genomic data, biometric data, sleep data, and the list goes on. And they're doing this through a variety of means, whether it's sensors on the individuals, study watches, regular visits, blood samples, lab works.
And so it's really a tremendous repository of data that hasn't been collected at scale or with this richness thus far. And they're partnering with lower leading academic institutions as well such as Duke and Stanford on some of these initiatives. So it's a really interesting and impressive undertaking. And this is just one of many projects that they're undertaking. So you can imagine, as we look across this cohort and look at, in particular, individuals with sleep apnea who are treated, individuals with sleep apnea who are not treated and individuals who don't have sleep apnea, we can uncover much richer insights than we were otherwise previously able to do in terms of how these individuals are progressing, what the impact of sleep apnea is on their health, what the value of treating sleep apnea is for them and for the folks who pay for their healthcare.
The kinds of insights that we look to uncover through our collaboration with Verily include really rich understanding of various sleep apnea phenotypes and what these markers are for these phenotypes, a really rich understanding of what is the different levels of sleep apnea risk and how can one stratify sleep apnea risk by these phenotypes and what might the parameters be associated with that? What is the best way to diagnose and treat these individuals based on their phenotypes and based on their personas? What kinds of patient journeys might be most effective for them? And what is the corresponding impact for their overall all cost healthcare in treating their sleep apnea? I mean those are the kinds of things we're looking to really further our understanding on with great richness and granularity through our collaboration with Verity.
That in turn allows us to continue to develop the world's leading devices, masks and software solutions to manage sleep apnea patients. It allows us to develop new ways of getting folks diagnosed and treated and partnering with our customers and key stakeholders in the healthcare ecosystem to actually deliver these models of care. And so some really exciting possibilities as it relates to what we can do from a big data perspective, above and beyond what we've already pioneered in sleep apnea through big data. Secondly, and perhaps the more interesting and exciting aspects of our collaboration with Verity is what we're calling identification and engagement solutions. As we've previously as I've previously shared and Rob previously mentioned as well, driving therapy adoption and diagnostic rates for sleep apnea is perhaps the single biggest growth opportunity we have as a company and value creation opportunity we have for our shareholders.
And we have a number of different ways in which we're trying to do that, but the Verity joint venture is a really interesting one in that sort of set of opportunities. Fundamentally, what we're looking to do is take the learnings from the big data research that I just talked about to develop a holistic approach to patient identification and engagement. We're going to be applying the latest of technology along with ResMed's expertise to use a multipronged approach to identify individuals at risk, all the way from highly targeted multichannel outreach combined with screening. You're starting to see some of this being done for various conditions. And this is the kind of approach that Verity is using to recruit for baseline, the project that I just mentioned, including things like predictive modeling and risk stratification for payers among managed populations.
So we can look across their populations and better identify who may be at risk of sleep apnea and then proactively engage with them to see if we can guide them through a systematic process to get treated. We're also looking to signal processing and machine learning approaches. So imagine data off of wearables, data off of sleep monitors, data off of various home IoT devices, whether it's home assistants. And these are all sort of illustrative examples of the kinds of things we anticipate we ought to be able to do with this joint venture. And then using those signals as a way to say how is one sleeping and is one at risk of sleep apnea.
And then finally, the other example I'd like to share with you all is using data from related chronic conditions as it relates to diagnostics or remote monitoring. There's been some recent press about barely machine learning applications as it relates to the detection of diabetes related eye disorders by applying machine learning to retinal images. And they're rolling that out in India at a pretty large scale. Now it turns out if you look at retinal images, you may actually be able to identify sleep apnea as well. And so that's just one example of applying machine learning to other approaches to diagnostic data and monitoring data from other related chronic conditions.
So there is a vast array of ways in which we can identify these individuals, and we expect to be looking at many number of these and bringing the best of technology to see how we can identify individuals. And once these individuals are identified, then actually proactively engaging them as well with very tailored and relevant content based on their particular situation and their persona and their phenotype, as well as customized guidance and experience, information resources and proactive nudging is a way to encourage them to take that next step. These kinds of resources just don't exist today for sleep apnea patients as they try to make their way from becoming aware of their sleep apnea, trying to get diagnosed and ultimately trying to get acclimated to therapy. And so we think it will be hugely beneficial as folks become aware of their sleep apnea to ultimately get on to therapy. These are the kinds of approaches, by the way, that are currently being employed by some of Verity's existing partnerships.
So this is learning that they already have and that we expect to benefit from as we apply these learnings to sleep apnea, right? And so we're quite excited about the possibilities here, and we think that ultimately we can support individuals all the way from awareness through to diagnosis, through to treatment in a very personalized yet efficient and scalable manner. And do so by applying not only a sort of powerful digital platform, continuous machine learning so we can constantly learn and iterate and get even better at getting folks through this front end of getting on to sleep apnea therapy, such that once they're on a ResMed device, we can continue to provide the best possible care that we've been able to thus far. And so the 3rd opportunity to highlight here, and again, this is sort of very early days, so please consider this as some of the possibilities we have, is as I mentioned previously Verily has established a number of partnerships in a range of areas. Many of these are in related chronic conditions to sleep apnea, whether it's diabetes, cardiovascular conditions, neurological and mental health, inflammation.
And they've also been forming partnerships and have projects in areas that are cross cutting across multiple disease states and are also relevant to sleep apnea, such as precision medicine, population health and healthcare delivery. What's happening among these existing partners is they're now starting to get connected with each other. And there's been a series of announcements over the last little bit of some of the partners starting to work together. And we fully expect that we'll have similar opportunities. And in particular, be able to partner with some of these projects and these partnerships to help them better manage their chronic conditions.
So by treating sleep apnea among those populations, can we actually improve the outcomes in chronic conditions like diabetes, for example? Not only do we expect that we can further understand what the interaction is between these two conditions and what treating sleep apnea would be able to do in diabetes management, for example, but also then work with that partner to identify sleep apnea among their population and drive them through better care. And so yet another exciting possibility towards proactive identification and better management of patients. So tying it all together, we're in the early stages of our joint venture with Verily, but fundamentally, we think that we can significantly move the needle in terms of therapy adoption, diagnostics and therapy adoption as well as significantly move the needle in terms of one's awareness of sleep apnea. We've formed a JV.
We have a dedicated team of experts from Verity that we're really excited to be working with. We've complemented them with a team of experts from ResMed, who bring a lot of domain knowledge to the JV. We've kicked off some early stage research really understand patient pain points and expect to be kicking off some of the big data research shortly and that will be an ongoing effort for us. We'll start to take the learnings from those and start to develop modules towards identification and engagement solutions and start to pilot those in the marketplace over the next little bit and then launch them at scale over the mid to longer term. And as and when we're ready to do that, start to engage with some of our early partners as well.
So that's broadly how we're thinking about the timeline for how this evolves. So this is a ongoing effort of research as well as proactively identifying patients and developing the market. In terms of expenses, I think as previously shared on our earnings call, we expect to expense about $7,000,000 a quarter, approximately $7,000,000 a quarter for the remainder of FY 'nineteen and for the 4 quarters of FY 'twenty. And that's based on equity accounting method of investments. We fully expect to earn a really good return on that investment.
And we'll do everything we can to manage it. We've got some good governance structures in place and working very closely with the Verily team to really drive the outcomes that we're hoping to get from this joint venture. And so we're very confident in our ability to earn a return on this investment. And fundamentally, drive therapy adoption for sleep apnea and grow the sleep apnea market. So in summary, our joint venture with Verity will really allow us to reach and engage the millions and millions of untreated sleep apnea sufferers and really support them and diagnose them and get them treated in a way that we just haven't been able to thus far.
Do so in a way that's really guided, that's really personalized, that's really efficient, and therefore allow them to get the benefits of a healthier life and a higher quality of life. We expect to significantly accelerate our insights and learning and understanding of sleep apnea through collaborations of Verily, along the lines of what I've new approaches, new approaches for machine learning, advanced analytics, predictive modeling in sleep apnea to fundamentally drive market development, accelerate market growth, accelerate treatment adoption and therefore generate really compelling returns for our shareholders. Thank you.
Great. Thank you, Haymuth. That's a very exciting project for us. We're really encouraged by early progress in the joint venture with Verily. And for us, as Haynes was saying, it's an important part of our portfolio of investments that we have in developing the sleep apnea market and making sure that more of those 936,000,000 patients can get on to treatment.
Now the second area that we wanted to talk about was talking about our respiratory care led by Richie McHale and we've got a great team working on a number of areas for it. Most of our business to date has been around medical equipment, particularly ventilators used in long term care. Now those ventilators treating patients with a variety of chronic conditions. But the main one is COPD and we really focus on COPD. There are a lot of other patients that can do very well on the ventilators such as neuromuscular patients, scoliosis patients and they're getting treated well around the world.
But COPD is just really the thing that's got our focus in terms of what are the future major issues we should be looking at. It's a major cause of death around the world. We believe there are nearly 400,000,000 people around the world with it. Some of the causes of COPD are exposure to smoking, being a smoker, but it's also exposure to pollution and living in cities that have poor air quality. It's also the consequence of having poor air quality in the home, particularly with given methods of cooking and things like that.
This is a very important long term condition that is under treated at the moment. It's very expensive to treat. These patients need a lot of continuous treatment. It's a long term disease. Many patients will suffer from this disease for 20 years.
It's a leading cause of death. We really want to work on it. Now I want to talk a little bit about our respiratory care strategy and that's really informed by our by a point of view of a number of key points. We believe that patients with chronic respiratory conditions are not well served. COPD patients are not well served by the health care systems today.
The same is true for asthma patients as well. We believe that's an issue there. We believe that sort of technology and technology in the medical equipment that's used to treat these patients could add a lot of value, could change the game. We believe that many patients aren't getting onto the treatments they need until it's too late. They're not getting onto treatment until they're so ill they can barely breathe and they have to go to the emergency room.
And we believe that getting good engagement with patients before that can make a difference. We believe that digital end to end solutions and connectivity and managing the workflows around how the patients are managed, but more importantly, providing information to the patients and supporting the patients in their own journey through that disease progression can make a huge difference. So that leads us to a layout of our strategy, 3 phases. In the core, we're going to continue to compete and win in the core of our respiratory care business, which today is selling devices for treating respiratory conditions, ventilators, oxygen, increasingly with Propeller you'll hear more of inhalers. We believe that in the second phase of this we can innovate through those.
We'll not only innovate the products, we've got a great product roadmap, but we can also innovate the business models and really the care models for these patients and make a difference for that. And we've got numerous pilots and experiments going on. And then longer term we believe we can actually transform COPD treatment by taking a longitudinal approach to what is how are patients managed and how do we create value for the health system by looking after them through that. One of the ways of talking about this longitudinal thing is just to talk a little bit about sort of the progression of COPD. I'm going to come back to that.
The progression of COPD, it's an increasingly severe disease. You get it, you start off with a little bit of breathlessness, trouble walking up the stairs, and it just gets worse and worse until eventually you're not breathing. Medical interventions can slow the rate of that disease progression, and we can also improve the quality of life through that disease progression. And improving the quality of life, we can generally keep people out of hospital, make them have to present to hospital less, and that has a really good impact on costs to the health system as well. So that we're really helping it.
There's a program called GOLD, a global obstructive lung disease program that really lays out how to think about COPD, how to manage it, what the causes are and what the standards of care are through it. It's a very good website to have a look at. But they define a number of stages of COPD, stage 1 through to stage 4. And there are different interventions in these different stages. So in stage 1, it's stop smoking, manage yourself, get more exercise.
Stage 2, you'll be on to inhaled medications that really make a difference, both that maintain you improve your condition, but also rescue you when you're in trouble. Stage 3 and moving on through these treatments don't line up exactly with these stages, but it's a good model to look at it. You might be adding in oxygen therapy. Oxygen therapy improves how people feel. It can improve their quality of life.
Although being tethered to a tank and stuck inside is not the best quality of life that you could have, and that's one of the reasons why we believe that portable oxygen concentrators, which let people get out of the house and move around are really important as well. And then by the time you're more serious on stage 4 it's when the long term ventilation comes into play. And we have studies showing that going on to ventilation can really improve patient outcomes, can keep them out of hospital and improve their quality of life. Now in terms of the market, if you take a sort of a market viewing, our ventilators are really only talking about being able to support less than 1% of the COPD patients in the market. Oxygen is maybe about 20%.
So ResMed's business today, which is in ventilation and oxygen, really is looking at the more severe COPD patients, and there are less of the more severe COPD patients around the world. The inhaled medications, that's about 75% of the patients or even more. And so this is start to explain where Propeller comes into play because Propeller is actually giving ResMed a role in a much greater percentage of the population of patients with COPD. And these patients not only need their inhaled medication but with Propeller and David will explain this much better than I can, we start to engage these patients on a platform, giving them feedback and how they're being treated and what their conditions are and what they should be. Unfortunately, eventually many of those patients are going to need oxygen and ventilation therapy and so there's a strong link for Propeller actually giving ResMed the foundation for a longitudinal view of the COPD patients supporting all of our business.
And then for those more severe patients, we have a very strong product offering that is really a range of solutions there and we continue to focus on these solutions and a significant fraction also of our R and D investments go into developing these products. And these products are performing strongly in their respective markets. And call out the astral there with the ResMed Connectivity Module. We're really in the process of establishing the value for connected ventilation, which is allowing care providers to prioritize which patients they interact with based on how well the patients are being ventilated in terms of their longer term treatment. So that's a quick overview of our respiratory care strategy.
And I'd like now to introduce David Van Sickel, who's the Founder and CEO of Propeller Health. David is a passionate epidemiologist. He spent early part of his career working at the CDC. You can find him on video blogs explaining the consequences of asthma and COPD and what really is our obligation to getting better treatments for these patients. He's done a great job building Propeller from a startup to really one of the most recognized names in digital therapeutics and build a very strong management team.
And we're really excited to have David as part of our team now. David?
Thanks, Rob. I brought a device to share with you in a bit. Well, good afternoon, everyone, and thanks for the chance to be here to introduce myself, share a bit of an overview of Propeller's technology and business, and also hopefully talk for a few minutes about the exciting next chapter we get to write as one of the recent additions to the ResMed family. So as Rob mentioned, I started Propeller after a few years as an applied public health epidemiologist at CDC. I was working in the epidemic intelligence service doing disease detective work, outbreak investigations for the agency on respiratory, and then later moved up to the School of Medicine in Madison, Wisconsin, which is where I and the company are based today.
Throughout that career, I've really been puzzled and motivated, I guess, by this persistent challenge in respiratory, chronic respiratory disease that Rob described so well. This shortcoming or gap between what should have been accomplished by now and what we've so far achieved, very reminiscent to I think the way Hammond laid out the big opportunity that still lies ahead in sleep. So the great conundrum in respiratory is that despite the development of more effective medications and an increased understanding of asthma and COPD over the years, the majority of the people with these conditions aren't doing nearly as well as they could be. Put simply, I suppose, patients and physicians need a lot more help understanding when they're not doing as well as they could be and helping them get to that next phase. But without any kind of clinical test or biomarker, so to speak, of their status and their level of risk and impairment, important feedback loops in the care and treatment of these conditions have been left open.
And as a result, there are really big costs to this poor state of affairs. I mean, dollars 82,000,000,000 annually for asthma alone and another $50,000,000,000 in the US for COPD. So the core insight behind the innovation that grew up into Propeller was that understanding how people were using their medicines, the ones that are taken to prevent symptoms from occurring, and then the medicines that they take when they're having symptoms, when they're having an attack or an exacerbation, understanding those patterns and the frequency of use and the time of day of use would really teach us about important vital signs of the progression, response to treatment, risk and impairment, and so on. So remember, there are those 2 classes of medicines, ones that you're supposed to take all the time, and we're trying to encourage daily adherence with those, and then the others that happen to be used when you're coughing or wheezing or having an attack or whatever. We realized back then that people were carrying around and using these medicines and that the fact that you had a delivery device for these drugs that you could add electronics to would make them amenable to monitoring and to understanding their patterns of use and then putting that information to work.
And to do that passively without asking the patient to participate in any way in that process. So since then, we've gone on to build about 10 different devices that connect the majority of inhaled medicines on the market, like these metered dose inhalers with these simple add on attachments that effectively connect it to the network and allow us to monitor the data that comes off of the sensors that are embedded in those devices. We put all of these and then this common software solution, digital back end and so forth through regulatory review at FDA as 510 class 2 devices. We've now connected 10 different sensors and put them through medications and put them through that process. And as I mentioned, that encompasses the vast majority of medicines that are used today in practice.
So while we're best known for this hardware, what I want you to focus on about Propeller, the way we create value isn't actually through the hardware, but through the data and the software experiences and the digital companions that we build using that information to help people better understand their condition, learn to avoid and mitigate or reduce their exposure to triggers that cause symptoms, help them understand the different types of medicines and how they should be used in daily life, connect them and sharpen and strengthen their relationship with their physicians so they can actually have data driven conversations that are timely and objective about their level of risk and symptoms and so on. So we do this primarily through these digital experiences, these apps, these solutions that meet people on their phones or an email or an Alexa or what have you. But what's important and where we think the real opportunity is here is that digital, just like it brought about wholesale changes in the way you look for a job or buy a house or entertain yourself in music and movies, we think that those same kinds of changes are going to come to health care and to medication delivery.
And in ways that mirror and complement the benefits of those medicines, they make them easier to use, more convenient, more simple, more accessible, just like it reshaped those other parts of life. So we can encourage adherence through these methods. We can obviously help connect them with their physicians in new ways, we can help them refill medicines when that time is up, and many new things to explore together that we'll talk about at the end. With this data, we can also put it to work for physicians who, as I mentioned, really lack great tools to understand how their patients are doing when they're not in their office, when they're out in the community, which is where the majority of asthma and COPD is being managed. So as you can see here, that happens by essentially presenting physicians with information about how they're increasingly large panels of population patients are doing.
Who needs more attention and how do I quickly identify them and bring them in for an exam or prescribe additional therapy, essentially get them on the right dose of the right medicines as fast as possible. So that we're effectively controlling, excuse me, effectively controlling these conditions and allowing them to participate fully in the activities they choose. So I want to talk for a second about the clinical sorry, the commercial model at Propeller and how we create and capture value from our business. On the one side, we're creating and bundling the supply of digital medicines with respiratory pharma, folks like GSK, BI, Novartis and so on, essentially helping them develop, trial, commercialize digital solutions for their franchises that are all connected to the Propeller platform. On the other side of our business, we're working to aggregate demand to connect the patients and members of large payers, provider systems, PBMs, and really help distribute these digital solutions, these digital respiratory solutions into the daily lives of those patients in efficient ways.
This puts us in a really unique position at the center where we have unique opportunity to see the real world performance of these medicines, and to participate in new kinds of value based contracts and other arrangements that are emerging as pharma and PBMs and payers increasingly try to look to control growth and costs. We generally earn revenue on a per patient, per time period basis. So we're paid for every individual who enrolls in and participates in Propeller and in some cases, have performance incentives on top of that. For pharma, one of the most important things, remember that their medicines aren't nearly used as often as they should be, adherence rates in the 20% to 30%. And as a result, people aren't benefiting from them to the degree that they could.
One of the key ways Propeller creates value for pharma is helping to encourage the appropriate regular use of those anti inflammatory medicines that are so important in blunting the slope of decline in COPD and in preventing people from having asthma exacerbations. In a randomized controlled trial we ran with an IDN out here, you can see we provoke about a 58% lift in adherence across a population of intervention patients compared to their control peers. And in the case of pharma, that translates into better sales, higher sales of these branded medications that are underused and as a result, not delivering the value to patients and payers. And we're also supporting a number of R and D efforts around the world to help them augment, strengthen their clinical trial efforts and collect additional real world evidence about the performance of their medications and populations. When you use more of those anti inflammatory medications, this is what happens.
The as needed use of the rescue medication, the drugs you take to relieve symptoms, when they occur like an asthma attack, it goes way down. So this is a marker. This is a vital sign of asthma. When you see a lot of people enrolling in Propeller, they come in using albuterol, a rescue medication more than once a day. They're suffering from many more symptoms than they should be having given the medicines we have and what we know about the disease.
Very quickly, they experience a significant and sustained reduction in the use of that medicine. And that happens in days and at nights, which is an important marker of worsening or instability, and you can see it persists all the way out to 2 years in this cohort of patients at Propeller. This is what people care about. They don't care about adherence to the anti inflammatory medicines for its own sake. They care about symptom free days, they care about the ability to participate in activities they choose, to go to school, to go to work, not to have their life and their nights being disrupted by uncontrolled chronic respiratory disease.
And when you follow those patients who are appropriately treated as a result of digital solution. So we're going to be able to get a better response. So we're going to be able to get a in these conditions. This is data that we recently published from a long standing commercial program with Dignity Health here in California, showing the significant reduction in ER visits and hospitalizations. Most of these should never happen with the treatments we have today.
There's lots of opportunity for digital to help patients and their physicians and the organizations that take care of them put their treatments to much better use and effect and as a result, improve outcomes and really lower costs. So I want to turn to what's ahead for us now that we're a part of the ResMed family. I have a few points to share, one of which is, as a result of the data and the clinical results and commercial impact that we're having with our pharma partners, they're expanding our footprint to a number of their important franchise markets outside the U. S. So this year, we'll be in 15 plus countries in clinical trials, commercial pilots, mostly with our pharma partners.
And when we looked at the opportunity to join the ResMed family, as a founder and CEO, one of the things I'm keen to do is avoid unnecessary originality. The chance to take advantage of an infrastructure that the team at ResMed had already established and put to great use connecting devices around the world in 100 plus countries, is really going to accelerate and encourage the growth of our business in collaboration with pharma, and not to mention, help us avoid having to recreate or rebuild that all on our own. In addition, we think that the government affairs, the market access experience, the kind of the accumulated wisdom and history that the team here has in bringing these kinds of solutions into these settings. It's going to be very valuable again in helping us hasten the adoption and get the beneficial digital therapeutics that we can offer into patient hands in those settings. And as you saw and as Rob described, we think there's a really interesting opportunity to do a lot more with digital across this longitudinal patient journey.
So today, we're starting to think about and work on ways in which we can help inform and empower the patient across that journey from diagnosis through the introduction of inhaled medicines, through the advent of other adjuvant therapies like oxygen and ventilation as and when it's appropriate, and it can be put to use again to keep people as healthy as they can be and as active as they can be as long as we can. So we're really excited to join the family. It feels like a great home, very similar kind of corporate cultures, I think, although ours is much smaller, but a place that celebrates problem solving and innovation and couldn't be more happy than to be here and to be able to write the next chapter in collaboration with these guys. Thanks.
Thank you, David. As you can see, we're really excited about the opportunity with Propeller and how it's going to transform our respiratory care business by bringing us into involvement of patients a lot earlier and providing a digital platform that's going to underpin how we look at that business. Now the 3rd topic we want to talk a 3rd and final major topic we want to talk about was our SaaS strategy and our recent acquisitions. We had had a lot of comments of what does this mean, please explain more and we're very aware that we need to give you lots of information and explain our strategy and how these businesses are actually really good businesses with great growth opportunities in their own right. But also importantly, as they grow, they're going to support and enhance our existing sleep and COPD businesses as well.
I'd like to introduce Raj Sodhi, who's the President of our SaaS businesses. Raj was the Founder and CEO of Ambien, a company that ResMed acquired very early in our journey towards becoming a tech enabled company. And Raj and Ambien had sort of pioneered the use of these digital approaches to changing outcomes in long term therapy. And he's really made a difference to the company. Over to you, Raj.
Thanks, Rob. As Rob mentioned, we need to give some context to these businesses and also how they connect back to the core business. Before I start with that, we had a strategy around digital health with we had lots of conviction behind it around enabling better patient care, clinical decision support, interoperability. And you've seen us unravel that over the last few years and drive a difference in how we compete in the market and how we grow share in the market, how we enter new markets. And so we've got conviction behind a SaaS strategy now that we're executing on that we're sharing with you today.
I think the first thing is, 1, to give you an understanding of what are these care settings we talk about. We talk about private duty or skilled nursing. And so what do those mean? So I'll talk to you a little bit about that. Second thing is around what's happening in the market and why is it attractive to us and why do we have the right to win in those segments.
3rd is where does our portfolio fit in this out of hospital space? And the last one is how do we create value? And ultimately then I want to talk to you about what's the link to DME? What's the link to sleep and RC? I had a great opportunity to meet with David's team, and I agree the culture of commercial and technology innovation is a good fit.
But within 20 minutes, we had intersection points defined between the SaaS portfolio, which you'll see in some of the patient examples we give here that show that a neuromuscular patient or a COPD asthma patient is also in a home care setting, is also in a skilled nursing setting where we are running the electronic medical records. So the intersection point between both the sleep and RC Digital Technologies now including Propeller have a strong place inside the SaaS portfolio. So let's walk through so I covered that. Let's walk through the a little bit of context around the different care settings. Home health is what it sounds like.
It's health being delivered in the home. It could be physical therapy, but it could be even specific things like wound care or a COPD patient in the home that's having their ventilator checked and then updated for the program settings. So you have skilled nurses or physical therapists being coordinated on a schedule based typically on reimbursement or patient need to enter the home, deliver therapy, document the episode and then come back to the office or go to the next home visit. And so there's a coordination both of the point of care application software as well as the patient engagement and the documentation and ultimately the billing that's taking place in that setting. Hospice is different and that is it's terminally ill patients.
So you've got patients that are end stage of life, they're looking for comfort, but they're in a very different care setting with different needs, but they still need medication, they still need visits. Those can happen in a home, in a hospice facility or even in a skilled nursing facility where there's a hospice setting in there. So it happens in multiple care settings, but it's hospice care. So very it's slightly different than home care, but it's a different care context. Private duty is interesting.
That's things like personal hygiene, groceries, bathing. So why would ResMed be interested in being in that category? Because we're trying to keep patients out of hospital in the lower acuity settings. And the challenge is if you don't address the non clinical needs, you end up having a much more acute clinical need. So for example, you have people that don't have family support, if they're not eating, if they're not bathing, if their house isn't ready for them to be managed in the home, or if they're simply just lonely and need someone to come and sit with them, they end up in a higher acuity setting.
And so for us to be able to coordinate the clinical and non clinical work is important in the overall strategy of keeping more patients in a lower acuity setting. And so private duties and new care another care context. Skilled nursing is into long term care. This is where someone's in a step down from the hospital and needs medical care in a clinical setting. And so it's a step down from the hospital.
You're getting lots of care. It's regulated both from a billing and from a like many of these settings, billing and from a therapy standpoint. And but it does need kind of higher acuity care. Senior living is different, and that's kind of a setting where the you're choosing to go in, you're in a facility where there's rehab exercise and all of those types of things, but you do have access to alarms in the room and things like that with the skilled staff. And so you're getting that type of care.
A life plan community is an interesting evolution of a campus like environment where you've got from independent living all the way up to skilled nursing or hospice. And so you've got a community where your needs as you need them, whether it's kind of episodic or whether it's transition of life, you end up you choose to go into a life plan community, so you have a continuity of care. These are emerging at various levels, meaning you can buy in at a certain level and pay a certain amount per month, but it can be at a nominal level or at a very high level depending on what you can afford. What's interesting about these settings is people look at retirement differently now. It's like reinventing themselves going into one of these communities.
But their expectations of digital engagement both to see what is going on with their house so they can live in this new context is much higher. So their demand on on technologies like Propeller to be able to see how they're doing with medication because they want to stay as healthy as possible to go to exercise every day to take the shuttle to the movies. They want to live in this context as long as possible and slow down the progression to the higher acuity settings. But therefore, the demand from the patients is higher on digital tools. So let's talk about what's going on in the market.
So one is we all know there's an aging growing aging population and it's increasing the demand on long term care needs. What's also interesting is there's less providers to do it. There's less caregivers. The burnout rate is higher because of the demand on them. And so providers are looking to technology to help solve a scale issue that they're looking for, but also they're looking to transition care to lower acuity settings.
That's linked to this health care reduction of cost. The spend is out of control and all providers, hospital systems are being pressured to push patients to a lower acuity setting without the risk of a readmission penalty. So for certain discharges, so if you've got a patient who's recently had ablation and is being discharged to the home, there's a penalty if they come back early. So there's quality of care in the hospital, but discharging them to the appropriate provider out of the hospital is something the hospital is now trying to coordinate, which then lowers the cost of the patient in a lower acuity setting. So this transition of care dynamic is getting heavier.
And we'll talk about numbers later on in the presentation about the volume of patients being shifted from the hospital to out of the hospital. So we talked about rising health care costs and this value based care equation is now coming into place. And this is linked to readmission penalties, but it's also linked about providers trying to market themselves to say, I'm an outcomes oriented provider. I can deliver higher quality care, lower readmission rates as an out of hospital provider. And so value based care is an emerging dynamic.
What's enabling that is the ability to measure therapy quality through technology to be able to measure outcomes long term throughout the care settings that a patient exists and be able to demonstrate that to the health systems and the payers. And this is really interesting and this is both a curse and a blessing. There's lots of regulations whether it's quality of care delivery or it's how billing is metered and our therapy is metered and then billed. And this is good because it holds providers accountable. It also puts a huge burden on them from an audit perspective, from a technology perspective to meet constant regulatory change.
It's an opportunity for us because we build technology that accommodates that. But it's also a people management issue. When regulations change, it means their workflows change. And so you need to be able to scale your business to engage with the users to teach them about these regulatory changes, get them ahead of it, and it gives us the opportunity to monetize more software around it. So I'll talk about the portfolio.
We've got these are the main brands. Before I get into these, we've made a number of smaller acquisitions such as Appacheta, which is a logistics delivery solution that helps drivers deliver product to the home. We bought Conduit Technologies, which is a workflow document management tool that lets our customers protocolize forms online and manage workflows more efficiently. We acquired Go scripts that helps us manage intake from physicians for e prescribing. And then we bought AllCall, which is a live call center to help fuel and support our customers through resupply.
Those were capability investments that we made under Brightree and those we continue to operate today. And those help our HME customers. What I'm going to talk to you about today is more how do we how do these platforms Brightree, MatrixCare, Healthcare First fit into those care contexts that I just described. So we'll start with Brightree. And we acquired Brightree back in 2016.
It was a strong growing business. It enables HMEs to do everything they need from intake management to billing, inventory, help with revenue cycle management. So it's an end to end ERP and services solution for the HME. Brightree had, when we acquired them, a really interesting technology in an iPad point of care. So it's like the EMR on an iPad and it's what those skilled nurses take into the home with them.
And it was a really good clinical solution with a sophisticated back office kind of for scheduling and billing and things like that. What it was missing were a couple of key components. How do you survey how effective providers are in the market? How do you do analytics and how do you do revenue cycle management. And so we acquired Healthcare First in July of 2018 to fill the gap between what we had with Brightree in a point of care application in EMR and what we saw as a gap to go up market.
And so enterprise customers are looking for a holistic solution. This isn't an overlap. When we looked at Health Care First, there was very little overlap in the technology that we had with Brightree. What it did was complement the solution, give us a full offering to take upmarket to enterprise customers. And that's important.
As you look at what's happening in the market, our customers, the larger customers, the larger agencies are the ones that are doing the consolidation. And the consolidation is not as fast as we've seen in other markets, but the we want to be winning with the winners and having a full offering and Healthcare First gave us that gives us an opportunity to work with those providers as they're shifting to our product in the enterprise space. MatrixCare has private duty I'm sorry, I should have clicked. MatrixCare has private duty, skilled nursing, senior living and life plan community. They have recently launched MatrixCare 1, which is a unified platform for all of those products under one login.
Why that's important is that, again, enterprise customers, so these so you see kind of a skilled nursing, large regionalized agency saying, I want to manage the transitions of care between these care contexts. If someone's moving from skilled nursing into home health, I want to manage that through my own agency and through one platform. MatrixCare 1 brings a brand new architecture and a single platform that allows us to do the transitions of care between these contexts as well as we're joining Brightree's home health capabilities and hospice capabilities into MatrixCare. So one seamless application across all these care contexts. So if you think about an agency that's saying I've got 3 of these care contacts, 5 of these care contacts and 5 different EMR platforms, that's not an easy platform to integrate from an analytics perspective.
And we talk about value based care and showing what the total cost is to manage a patient inside of your ecosystem, very difficult to do when you have fragmented systems. So we have a very unique system, in fact, the only system that exists like this in the U. S. With all of these care contexts covered. And I'll talk at the end about the importance of HME here because where does HME fit with skilled nursing?
I'll get to that a little bit later in the presentation. Oh, I'm sorry, big it was a big gap to not mention the hospital. And this is important. Back in 20 16, we had spent a lot of time figuring out interoperability. On the ResMed side of the business, we've been doing that, hospital integrations, 3rd party integrations, so that when people want to live inside their systems and see our sleep and respiratory data, they can.
Brightree was one of those examples we had integrated with Brightree before we acquired Brightree. Hospitals are doing a lot of discharging. They're also intaking patients. So if you have a patient that ends up in a home circumstance, has an exacerbation and needs to go back in the hospital, the hospital is now intaking them back. They want to know what happened in the home, what was the medication, what was the therapy, what's the family support system look like, so that they know that they brought them in.
So if there's a new important. Back in 2016, we worked with Commonwealth Alliance and some major EMR players like Cerner and showed that we could manage a discharge from the hospital and a sharing of information back and forth. That was back in 2016. We've evolved our footprint of hospital integrations. We've evolved our understanding of the needs of the hospital when they're discharging, what data they will share and what data they want back.
And so we have a strong capability and interoperability between our out of hospital systems and the hospital systems themselves. That also puts us in a unique position to effectively manage interactions with the hospital. So in terms of why are we in a strong position, Brightree is a strong leader in the HME space. We've recently launched an infusion module, so we've diversified. We continue to invest in innovation.
Infusion was a gap for some of our HME customers. This will allow us to go take more share in HMEs that are doing infusion work. We've launched several different modules, including resupply analytics. We've launched an intake offering with ePrescribe. And we've launched a series of other analytics analytical tools that help our customers understand the true efficiency of running their business, all software that we're monetizing.
We have a very unique iPad point of care application combined with revenue cycle management, EMR scheduling tool and BI tools from Healthcare First. And on MatrixCare, we talked about the number of care contexts that they're in plus the fact that customers tell for 3 years in a row that through our class rating system, that's an independent rating system, that MatrixCare is their preferred choice for vendor. And so that's important, 1, from a reputational standpoint, but this is the voice of the customer saying that we appreciate it's not just the software, it's the customer service, it's the implementation, it's the innovation that they put into the platform. So that gives us an edge, but also the fact that MatrixCare has an architecture that allows us to transition care between care contexts that we can bolt Brightree into. In terms of the size of the market, you've got 38,000,000 providers across these three contexts and a rough spend of health care IT spend of $1,500,000,000 So in terms of white space, whether that's in the market growing at a healthy rate, in terms of white space, we feel really good about our opportunity, but more so the fact that we've assembled something unique that can go and position ourselves better than anyone else in this space.
So let's talk about value creation. So one, these businesses were all attractive on their own. So they were innovating independently, growing nicely independently. As a portfolio together, we see an opportunity to accelerate. We also see an opportunity to get synergies across the business.
So there's common software platforms, common implementation teams, common infrastructure teams. So we are working on ways to get leverage across the businesses. We're also working at how they innovate together. So how do they deliver unique propositions to the market as one. The other one is these were net margin accretive and on a standalone basis.
So again, strong businesses that we're looking to put together to accelerate. Given we know that everyone is looking to IT to solve some of those market pressures, health care IT, we're in a good spot to help them with that. And as the market shifts to value based care, everything we have here, including this treasure of data that we have across these care contexts. We've talked throughout this presentation about the power of being able to show the value of the care you're delivering. Now we can show longitudinally in our own systems with no partnerships in our own systems how well we can manage a patient.
The other one is regulatory. We have 2 significant regulatory changes that are coming in place, 1 in skilled nursing in October, 1 in home health in January. Our systems are well positioned. This is a scale issue. When you look at providers that have in house systems, providers that are using smaller offerings, this is a heavy lift from an R and D perspective and from an implementation perspective.
Imagine someone said you're billing this way today. Tomorrow, I want you to clock your work this way and bill it. You now need to retrain your whole staff. So it puts pressure on the software providers to do that while they're managing new bookings and new sales and driving new growth. If you're not on scale, that becomes difficult.
It's a really good opportunity because we're good at managing regulatory changes. ResMed has a pedigree in managing regulatory changes, so we bring that to portfolio. But we also have an opportunity to have providers that are who are using software companies that aren't ready for these changes to take that business and help them through these changes. The other interesting thing is we've seen a number of remote patient monitoring reimbursement opportunities come up around how to incentivize physicians to be part of the patient care. And there's an opportunity in SNF.
There's an opportunity in physicians to connect telemonitoring into these new care contexts. So whether that's sleep or propeller, we have an opportunity to intersect our connected care technologies into the workflow of the clinicians in our SaaS ecosystem and drive adoption of new telemonitoring rules and then therefore new reimbursement. Let's talk about a patient, for example, just to give you some real context. So we've got Jane, 74 years old, kids live away, living on her own. She has some there's some hygiene issues in the home.
She's stage 3 COPD, which so she's likely on oxygen, and if she's late in that stage is having flare ups where she's going in and out of the hospital. Her family is trying to figure out what to do with her. Is it okay for Jane to live in at home? When as she exacerbates and ends up in the hospital, should she go to skilled nursing? Should she go to home care?
What should they do? And this is the challenge we all face. And I'm sure someone in this room has faced it with their parents trying to figuring out who's even a quality provider to send their parent to. This is a real challenge and the problem comes is that when you shift so when Jane shifts from home health and has an acute episode, there's no transition of documentation. So you're starting over with Jane's medication.
You're starting over with the fact of explaining that no one lives near Jane when she has to come back home. So she is bouncing around to all of these care contacts trying to figure out on her own or through family what to do. This means that Jane likely ends up in an acute setting more often than she likes and more often than she can afford. So the Jane is just one of the 35,000,000 people that get discharged out of a hospital every year and has to figure this out. Now 22 percent of those, so 8,000,000 people have to figure out who to go to in the post acute care space.
This is where we see the opportunity. We're uniquely positioned to manage those 8,000,000 patients and the providers that are moving them from one care context to the other. So what have we built? Essentially, we've built something that centers around the patient, the caregivers and their loved ones. We've built something that has multiple out of hospital care contexts in terms of a portfolio offering to allow us to manage patients with multiple needs for their care.
We've also built a technology that allows us to give the patient and the loved ones a single view of their care. Imagine if you could we do this all day, right? We have Apple Health. We have tools from Google. We have spreadsheets.
We have our file folder with our medical records. And that's it gets more complicated as your needs become more difficult. Imagine one place where a patient can say, I get a single view of our patient. That's what we're that's the future of our portfolio is to give a patient and the loved ones one view of what their needs are, what their options are for care and how they're progressing with their management of their needs. The other one is this transitions of care, reducing the friction when you have to move someone from one care context to the other, making it simpler for the family from a transition perspective, billing perspective, there's a real opportunity for us to do that here.
The information that we're gathering on the patients and our ability to connect telemonitoring and improve their care in the care setting of their choice is a real opportunity. The data insights is exciting to me. We built a really we've had a really interesting opportunity to look at how to improve care on the sleep and RC side. The opportunity here is to how do you improve a clinician's ability to engage with a patient. And I had this light bulb go off when we took the iPad.
When you take a laptop between you and a patient and you remove the physical screen and you just put the iPad down, the natural conversation that happens, it's interesting. But the natural conversation that happens because there's no physical barrier between you and the patient is there. But it's also about giving the clinician time to spend on the patient. And if you're helping them through the automating documentation and dealing with the errors that happen in the documentation that they need to correct later, that's a real problem to solve. The other problem is clinicians burn out because of the amount of volume of data.
And with the volume of patients landing at a we have to stop the burnout and give them a way that they can excel at what they do and engage with patients better. Data gives us the ability to do that. We can see when there's missteps in how they're entering data. We can see when there's clinically insufficient outcomes and we can tune the software in a way that gives the clinician a better experience, the patient a better experience and the provider better outcomes. We've talked about all of that and now I'll answer the question about why HME and how does that fit in this.
And we started with HME, so there's that that should hopefully answer the why. It's connected to our core business. I have such a passion around connected health. I came into this business with a lot of technology and built a team. Bobby Gauchow, our CTO, sitting here, has now managing that team and taking us to newer places.
I really am passionate about the business. We continue to have Brightree work closely with our sleep and RC teams and soon Propeller on how we further integrate those offerings and better the opportunity for our sleep and RC patients and customers. HME has a place in all of these care contexts because many of our HME providers are providing services today into these care contexts. It's just happening by paper. So one example is 20% of CMS patients receive an HME benefit and they do that 3 times per year.
Those customers are in these contexts, many of them. So there's already business happening, so it's a matter of us intersecting HME into these. And I'll give you a good example. Hospital discharges a patient to home health. Home health is saying, I need to make sure there's a hospital bed, wound care and a ventilator in the home before the discharge can happen.
That coordination needs to happen with an HME. We have a really unique way to do that now through Brightree, not only from the billing perspective, the logistics to get the equipment there with the apachetta technology that we bought, but to confirm with the home health that the house is ready for the discharge. And so there's a really great opportunity and HMEs are having interactions with all of these providers today. The other thing that we'll we're we with all of these providers today. The other thing that we'll where we have the opportunity, we talk about a prevalence number and how do we get ourselves closer to patients.
There are sleep apnea and respiratory care patients all throughout this. So being able to diagnose, treat and manage patients more effectively in that are already in our EMR is a really great opportunity. So in terms of a summary, we've got a portfolio that we think individually these businesses are attractive on their own. Together they're powerful. Second thing is this ecosystem is ready to scale.
It is our competitive advantage. The fact that we are a unique ecosystem of an out of hospital care, different than anyone that's in a unique ecosystem of an out of hospital care, different than anyone that's in the market today. And last one is, we know that this will support the growth of our HME businesses, is giving HMEs the opportunity to contract in a new way with a skilled nursing facility or a home health agency is an opportunity for growth of our HMEs overall business, but also for a growth of our sleep and respiratory care devices. I'll finish with this. We've had we had conviction in our digital health strategy.
We've got conviction in this SaaS strategy. We've got the right assets. We've got the right team, and now we're executing.
Thank you, Raj.
I think we're
just I mean, so thanks Raj. That's very compelling. And we're very pleased with the way these investments are going. Early days with Matrix Care, but operationally, we're very happy with that too. Just like to close now and then we'll move to the Q and A.
You know, we believe we've got our strategy settings right. There's a lot of change coming up in the health system. And we are not being complacent and we're not taking our current market leadership position for granted at all. And hence we're investing in these strategic moves to make a change. We think in our sleep market, such an underpenetrated market, we need programs to drive penetration and to accelerate that, particularly as we get larger and larger in that market, but the opportunity stays large.
The Verily JV is one of our key investments in that as a way to accelerate potential growth in that market. Our respiratory care portfolio, we've got a great range of products there. We've been focused at the tip of the chronic condition. The Propeller investment lets us focus broader across that range and really start to make a difference with these digital platforms around that. And then our SaaS businesses, you've just heard from Raj, they're very good businesses in a fairly unique position at the moment as well.
But not only can we grow those businesses in their own right, but those businesses are supporting the providers of very of environments that have a lot of sleep apnea and a lot of COPD patients. And so we think that there's a very strong correlation for our business and support for our businesses there. So as I say, this has been a focused discussion on a few key strategy areas for ResMed. But overall, we continue to have a great opportunity in the sleep and COPD markets. These we're very lucky in our market dynamics.
We're in underpenetrated markets. We've got solutions. We've got solutions that we believe it's lower for health systems to find and treat patients with our solutions than it is for them to treat the consequences of not treating those patients. And we're building on data to prove those points. We're focused on patient outcomes, focused on creating using technology to create value.
Our recent experience of connecting our devices has been very powerful for our business, greatly improved our position in our markets and we're greatly able to show the hugely improved outcomes. And then the outcome changes that we've shown on the bits of data here today are actually very profound for the health system. We continue to invest in innovation and we'll keep doing that. And then we've got a strong financial background. We're relatively conservative financially.
You'll see our history of strong revenue growth, strong profit growth. We're building recurring revenue models. We've got a very powerful undergoing underlying operating excellence program that we're happy to talk to you about at other times. And we've got a strong track record of being disciplined with our finances. So with that, I'd like to say thank you for your attention.
And now we'll move to the Q and A section of the program. I'd like to ask the presenters to join me on stage and David Pendarvis, who we'll have for the really hard questions. And we'll actually then take questions from the audience. Just prior to that, I'd like to remind you on the webcast, we have a system that you can access and actually post questions online. And as we go through this Q and A, Amy Wakim will represent you and put up her hand with appropriate questions and we'll read them out and identify them.
As you in the audience, please as you ask the questions, could you use the microphone so our webcast colleagues can hear it? And also please identify yourself as a question. So I think Andrew had his hand up first, then David.
Thanks very much. It's Andrew Goodsell from MST Marquis. Just I guess a question around MatrixCare and I guess the way I understand it is provider and different. So just trying to understand the practicality there, just how you bring about the linkage between the 2 parties, whether it's HME and home care provider in a practical sense and are there sort of examples that exist to that or is it something where you think that the logical just it's just logical that they'll the 2 parties will come together by sort of seeing the mutual benefit.
Yes. So I think on the there's kind of 2 parts. We've heavily integrated the sleep side and the RC side. So there's 2 parts. 1 is how do we get providers collaborating together on broad HME services.
So that's one side of it. And that is happening by paper today. So they're pushing us to our customers are pushing us to solve the exchange and coordination of those 2 providers. So it could be a skilled nursing facility saying, I need supplies in from this network and I want to coordinate that electronically now. And so if they're on MatrixCare and they know that we own Brightree, they're asking us and most of our their surrounding HMEs are on Brightree, they're asking us to coordinate that interaction.
The second thing is we intersect sleep and RC technologies. And so as we diagnose patients with sleep apnea inside of the skilled nursing facility, there we can integrate air solutions, so directly to Air View and the other technologies. But there's a richer data set that exists, the sleep study, the monthly reporting, are they in a resupply program that exists in Brightree? So there's an opportunity to link all of that data as well to give the skilled nursing facility, the care coordinator an opportunity to see a broader view as long as the patient has consented to sharing that data.
Thank you. Next is David.
Thanks. I'm David Lowe from JPMorgan. What we've discussed today, it seems to me that we've seen there's an extraordinary complexity in what you've laid out in front of us. And I think sort of it sort of begs the question as to how we externally are going to measure that. So perhaps if I could get you to talk to disclosure as a starting point, how you're going to disclose Verily, Propeller, the software as a service businesses, so we can monitor how ResMed is doing in this space?
And then perhaps sort of as a bigger question, how would you define success across the three things we've talked about today?
Well, I'll start that question and probably hand some on to Dave and some on to Haymuth as well. In terms of the disclosure, we are planning to segment report the matrix sorry, the SaaS portfolio. And so we will have a top line and a bottom line disclosure of that on an ongoing basis. And I think we do have an appreciation for the issue of we are changing ResMed. We can't be complacent and ResMed is no longer a pure device company.
And we think it would be not prudent for us to just stay complacent doing what we're doing. So there will be changes as it particularly as things reach materiality thresholds. We'll disclose more about them. Competitively, we're always under pressure around competitively what we disclose given the fairly narrow nature of the competitive environment that we're in. And I think the as we get some experience with disclosing the SaaS business that should give everyone some view of where that's going.
Dave, I don't know if you wanted to add on to it.
Yes, I think it will be something that will develop, Dave. I mean, as it comes on, for just example, we disclosed our March quarter at Q3. That will be the 1st full quarter that we've had of MatrixCare results. So you'll see more heft in the overall software as a service. And so that will necessarily require us to talk about it more and measure it more.
We haven't landed on any specific sort of metrics to be consistently reporting on, but that's certainly something that we'll look at and be interested in your views on what you'd find helpful. Verily is the JV is a different animal to a certain extent because it's an independent entity. So we follow the accounting rules and obviously we'll be showing the financial applications there, but we've got a partner that we've got to make sure is comfortable with the level of disclosure that goes on with that group. And Propeller, we look forward to the day when Propeller is significantly material and can call it out. But certainly, from a commercial standpoint, there's moving towards commercialization milestones.
And those will likely be something that we'll flag as they move along. We're always focused on our obligations and that we really feel to penetrate these markets and to reach out to patients and those sorts of milestones in addition to the financial milestones. So I think it's a journey that we're on and you'll see us develop and give you more things over time. But then probably Haymuth can probably better address the what does success look like and
some of these
aspects? Sure.
Yes. So success across each of the 3. So starting with Verily, clearly to the extent we can accelerate market growth and treatment adoption, that would be the main thing to be looking for. And even the slightest uptick in getting the untreated onto therapy will more than offset the returns more than offset the cost and therefore generate strong returns associated with the investments we're making. So the way we think about that particular set of investments and returns is there's going to be value that's going to be created in the market place for providers, for payers, for patients themselves, and equally for us as therapy adoption continues to grow.
And there may well be interesting business models accrue from that for Verity as well and for the joint venture itself. And so we'll look across that entire set of value both that accrues in the JV as well as value that accrues to ResMed as a way to look for success and ensure that we're earning a strong return on that investment. As it relates to Propeller, I think it's largely about how can we expand the TAM that we can address, much like Rob and David addressed. And can we significantly start to serve the 100 of millions of COPD patients that start with tens and then sort of graduate up to 100 of millions of COPD patients, how do we make progress against that front, both in terms of coverage, but also how can we proactively get them on the therapies that they need earlier? So can we get them on a portable oxygen concentrator early as they currently come on because they could benefit from it?
Can they get on a ventilator earlier than they currently get on so they can benefit from it and enjoy the quality of life and the slowdown in the progression of the disease? And so those are the kinds of things we'll be looking for in addition to the financial performance of that business. Clearly, their partnerships will be a key indicator of traction in the marketplace as well. And so we'll continue to manage the progress on those and look to the progress on those. And finally, on SaaS, it's really about what is the collective impact that our portfolio has.
And as Raj indicated, each of those businesses is in a really strong position and growing in its own rate, and we'll continue to grow market and market share through the innovation we do in those markets. But collectively, we have a really interesting innovation opportunity. And it's about to what extent can we start to serve these enterprise customers, the customers who are in skilled nursing facilities as well as home health as well as hospice and serve them more fully across their needs to drive the transitions of care, create greater efficiencies, create better outcomes and continue to take the market to a new level. And so beyond financial performance and earning a return on the investments we've made for the acquisitions, it's about making sure that we progress the market as well in that direction.
Okay. If I could just have a follow-up there. So effectively, what we're going to see is a breakout of the software as a service business. We'll presumably looking for double digit growth, which is what Mick talked about as a measure of success. With the JV, presumably, we're just going to see the losses drop through the bottom line.
And frankly, we won't be able to see the success that would show up as growth in sleep sales. I'm just sort of trying to make sure I'm looking for the right things out of this.
I think you've summarized it reasonably well. We see good growth opportunity in the SaaS businesses. We've had talk earlier around what level of guidance we give and how specific we are. And we've got our current set of policies and we've heard a lot of input and we are considering those issues around that type of forward disclosure. But we've acquired these businesses because they're in growth markets and they should make hit those markets and grow better than actually the size of the market because we believe we're in share taking positions as well.
I don't know, Haymuth, did you want to comment on growth?
Yes. I mean, I think our expectation is that clearly we should expect to see growth in our sleep business and that will flow through the revenues and profitability of our Sleep business. There will be an investment associated with that. It will be captured as it relates to our investment in the Verity joint venture. But equally, we expect over time that the Verity joint venture will come up with its own business models to make sure that it's earning revenues to offset the investments that it's making too.
And it will be more than sort of breakeven, it will be profitable in its own right and it won't be sort of just an ongoing investment into perpetuity. And so that will be a longer term development, but near term, you should see a lift in our sleep revenues and profits and longer term growth in the Verity joint venture. Great.
Thanks very much.
Thanks, David. I think the next question was back over there in the corner there.
Hi, it's Craig Wood Penn from Deutsche Bank. Just first one on Verily. Do you need to wait for that sleep, that study, that 4 year study to finish first before most of the benefits will come through or can they come through before that?
Yes, the benefits can certainly come through before that. That's certainly what we're planning for and expecting as well because you don't need to complete the full 10,004 year study in order to then start to do the specific research around sleep apnea and the benefits of treating sleep apnea. So we can create cohorts and basically get the benefit of some of the types of data that's been collected through baseline for that specific cohort and accelerate our learning and understanding of the impact of treating sleep apnea and the value of treating sleep apnea among those patients. But that's just one form of how we're going to generate insights. We expect to do retrospective analysis of claims data, for example, and other types of data as well, to just look for different ways for how we can continue to strengthen the health economic case for treating sleep apnea and how do we better identify individuals through predictive models and the like.
And then second question on Propeller. Am I right in saying most of the benefits or the way to become profitable through volume and scale. Is there any other kind of expenditure or things that you're developing for that business?
I'll hand that to David. No, you're correct. The path to profitability leads through scaling of the solution across the U. S. And other markets.
That's where we're focused this year and next.
And just a general comment on the whole metrics and how much we're monitoring all of these acquired companies. We're closely watching the P and L and managing them and expecting them to contribute their own to their own P and L through that. Next, I think we had a question from the Slido from the webcast, and Amy is going to read out a question, I think.
Sure. So this question comes from Steve Win at Evans and Partners. And I think this one will go to Hamid. It's related following along the Verily line. And so I think it's continuing the line of questioning from David.
But Steve says, I understand the identification process of sleep apnea patients, which will benefit ResMed, but how does the JV monetize the opportunity? And Verily, as such a huge long term opportunity, what happens to ResMed's investment beyond fiscal 2020? Presumably, there will be several more years of investment required.
Yes. So I think it's along the lines of the response to David's question, which is, we think that the JV will create a host of value for a number of players in the marketplace. Clearly, as we drive efficiencies and diagnosis and get more patients onto therapy, treatment adoption is going to be a key source of value creation and ResMed will benefit from that. So that's sort of one part of the value creation. Secondly, we're still in the early stages of formalizing the business model for the JV itself, but we expect the JV to have its own revenue streams based on the value it creates in the marketplace.
Clearly, we want to do it in a way that allows us to fully capitalize on the opportunity of driving treatment adoption, and we don't want to hinder that in any way, but design the business models in a way where we can capture revenue within the JV itself and then use that to fund investments on an ongoing basis. And so we expect investments through to the FY 2020 fiscal year. And then beyond that, we're planning on the JV to basically start to cover its investments largely by itself. And so that's the current sort of planning that we have. Clearly early days and a lot to be figured out still, but that's the way we're thinking about it.
So both in terms of what is the monetization opportunity for the JV as well as the time frame around that, that's the current thinking around it. Anything you'd add to that, David or Rob?
No, I think that's right. And it is early days and it is an opportunity. That's one that we'll continue to watch and you should expect us to continue to update you on it as time goes on.
Right. I think our next question is from Gretel. Sorry.
Hi, it's Gretel Geni from Credit Suisse here. So firstly, just on R and D. So you increased your R and D guidance at the last quarter's result. Just wondering how much of that was for Propeller versus versus MatrixCare versus ResMed's business as usual? And then as we look forward, do we expect further investments in R and D and also a step up in your sales and marketing costs as you start to implement some of the strategies you've talked about today?
So again, I'll start and maybe Dave can clarify for me or maybe Hayman. But generally, we've had this rough view of R and D being in that range of 7% plus or minus 1% or so. Acquiring the software businesses are clearly more R and D intensive, and Propeller, given its early stage, is also R and D intensive. But we actually think we'll be able to longer term have a view that we can keep R and D investment at around about those levels and do that. We actually get a lot of scale benefit in our core business on the R and D because whether we're selling 1 or 10,000,000 models of versions of a mask, the costs are developed and don't change a lot.
So we do have an innate leverage in a lot of that. In fact, over the last few years, we've had to invest a lot in software in the overall transformation of the company. And we've been able to do that keeping those ratios roughly similar. And as a growth company, we're able to allocate our R and D portfolio investments and still support the core business very strongly. Dave, did you want to comment?
The only other thing I would say is, yes, that step up that Brett talked to was both for recognizing that Software as a Service businesses inherently require more R and D and Propeller's P and L. And we want to fund those things because we do think they'll drive long term returns. But we're continuing to invest heavily R and D in our core sleep business and our core respiratory care business. So we're not starving those, the R and D functions there to feed these new opportunities. So that is the reason why it's a step up on an overall basis, because we do intend to continue to fully staff.
And Rob alluded to it earlier, we're talking about the new things, but if Jim was here, he'd love to be talking about the great things that we're doing in the core sleep business and the core respiratory care business. So those projects will continue. You shouldn't be concerned at all that they're being starved to feed these new ventures.
And then in terms of the sales and marketing costs going forward, as you start to implement some of the strategies, should that start to step up?
I think you'll see that continue at pace. I mean, we're at the levels that we're at now. And frankly, we continue to have opportunities and a working discipline to try to drive operating leverage out of the core business. And so getting scale out of whether it's the SaaS business or putting the propeller business in with the respiratory care business, those efforts at scale are an effort to be able to drive operating leverage down. So we don't think you'll necessarily see quarter in and quarter out kind of a straight line leverage, but we do intend to continue to have good strong top line growth and be able to grow the bottom line even stronger.
So rather than it stepping up, we would hope that we would stay flat to down. Thanks.
You're welcome. Think the next question is from John.
Yes. It's John Deacobel from Citigroup. I just wanted to make sure I fully understood the revenue model in Propeller. So you mentioned earlier that it's revenue per patient per day. I'm assuming that's paid by the drug companies because you're increasing compliance,
is that the case?
We really earn money on revenue on both sides of that business, both from the connected pharma franchises, the medicines that people are using that are part of Propeller as a digital solution. And then also from the distribution side of our business, whether it's the payers, the provider systems or the PBMs that we work with who bring the digital solution that we've built, the platform to their patients and members.
And just so I'm clear, can you just remind us how the sales structure of that business is set up and what are the barriers to growing the volume at the pace you're trying to do?
Well, really it's I mean, for the most part, it's revenue on a per patient, per year basis.
Your sales team, how are you actually who's out in the field increasing the volume?
So a commercial sales team led by Chris Hog out of San Francisco that's focused on both sides of this business, really the business development piece with our upstream partners, our pharma franchises that we work with as well as the downstream business, which is across the U. S. And increasingly now outside the U. S. Focused on sales to those types of organizations that I mentioned like the leading payers, provider systems and so forth.
And are there barriers to growing the volume at a very rapid rate? I mean what are the key limiting factors?
We already have established relationships with some of the leading payers and provider systems and now we're at the point of growing those programs, converting them into enterprise programs across their business. Dignity is a great example where we've recently finished a clinical trial that demonstrated, as I showed today, improvements in outcomes, reductions in acute healthcare utilization for asthma. Now that program is being adopted across its enterprise as part of the Office of Digital and a digital transformation strategy they have there within Dignity. So today, it's really about demonstrating initially value to that organization and then helping them implement and scale that across their patients and members.
Thanks, John. Next question from Anna.
Hi, guys. This is Ada Nussbaum here for Margaret Kaczor for William Blair. And my first question for you guys, within SaaS and specific to MajorCare, as you are able to leverage platform across multiple verticals, are you primarily planning on expanding the market or taking share within the existing market today? And then how penetrated is ResMed within these verticals today as well?
The second question, we don't disclose. The first one, I think it's both. I think we there's really interesting opportunities to grow within and not just taking share, but increased share of wallet of the customers. So they may be spending on the current services we offer. We add a new module.
And with Brightree, for example, infusion is a good example. We had customers who use Brightree and a separate infusion platform, so we'll be adding that on top. And MatrixCare is very similar. We would add analytics and new offerings. It could even be as simple as an algorithm that predicts something that we monetize.
So we'll continue to grow share through but also grow share of wallet inside of an account. We are looking at adjacent markets, the ones that make sense. So and whether we build into those markets or look to partner or acquire down the road, we continue to look at that. But again, we talked about the transition of care. Strategically, it needs to make sense for us.
There needs to be a strong relationship between the providers and an existing interaction that we can stitch together.
Thank you.
Thank you. And then with Propeller, a quick second question. It sounds like a large market with benefits of higher utilization for patients, pharma and payers. Will the initial launch there be available for all inhaler patients or specific to high risk patients or those on a certain drug? Just trying to get a little more color.
Yes. One of the commercial challenges we face is demonstrating that membership in a high utilizing population next year is often visible in advance by looking at their patterns of medication use this year. And so we're trying to encourage and accumulate evidence and data that to demonstrate to our payer, provide our customers, folks who have risk around those outcomes, that it makes sense to monitor and include a much broader portion of the population than sort of a typical retrospective claims review might indicate. So trying to get it to make sense to them as much as we can by showing them now accumulated history and population data across the nearly 100,000 patients that have participated and their outcomes.
Thank you.
Thank you. Our next question, I think, is going to come off the webcast again, Amy.
Sure. So this question comes from Zara Lyons at Fidelity, and this is a follow-up for Propeller. And then it's, what is the current U. S. Penetration of Smart Inhalers now?
And where do we expect it to go over the next 5 years? And then a follow-up, I think, to Anna's question a little bit is what are the bottlenecks to adoption of Smart Inhalers? And then who does the value of the technology accrue to?
Yes, I'll take the last straight away. I think what I tried to demonstrate today is we see value accruing both to patients who are benefiting through fewer days with symptoms, hopefully a longer higher quality of life in COPD and a lot more security around their control and management through reduced risk and impairment and a better understanding of disease progression and response to treatment. Amy, would you share reshare the first part of that?
Yes. So what is the current U. S. Penetration of Smart inhalers now? And where do you expect it to get over the next 5 years?
It's really early days for Smart Inhalers. I think we've now accumulated enough clinical evidence that's compelling and credible that the payers and provider systems we work with in combination with the respiratory franchises that are now starting to invest in this, see real opportunity to bring the types of digital changes to the care and treatment of asthma and COPD that will benefit folks through higher adherence, through improved outcomes, but we're really just getting started at bringing that at a large scale across the population. So as I mentioned, we have about 25,000,000 in the U. S. With asthma, another 12 or so with diagnosed COPD.
We're nowhere near that and are just starting to establish a foothold in bringing scale to this population digital to this population in the U. S.
Thank you. Next question was Leanne.
Hi. It's Leanne Harrison here from Bank of America Merrill Lynch. I've got a question about the SaaS portfolio. And Raj, I think you've got a fair bit on there with Brightree, MatrixCare and Healthcare First. But do you feel that there are any gaps in the portfolio where you would like to be or areas where you would like to be that would help leverage your growth?
I mean, we always aspire to innovate beyond where the portfolio is. We're engineers by heart or many of us. So I would the engineers would say there's gaps because we should be doing this. I think our focus right now is let's integrate what we've described for you here. Let's get the leverage out of the portfolio together.
And then yes, there's I think what we're doing now is we've got a number of integrated partners today that end up being either acquired capabilities or kind of new segments and new EMR platform. So we'll continue to partner strongly and look at the segments. But I think it's a matter of understanding the interactions. But our focus today is, let's integrate and operate these today, and then we'll partner to fill any gaps.
Just one other comment on that. We're very focused on the integration and what we've got on our plate at the moment, but particularly the SaaS businesses are very U. S. Focused. Somewhere down the track, we might take a further view on opportunities outside of the U.
S. In that area. Yes, Rhett?
Rhett Kessler from Pangana. So if I add up all the investments you guys have recently made and had a big checkbook about $2,000,000,000 or thereabouts, what do you think a decent return on that is in 4 to 5 years? So what rate is would be success? Because when I calculate it's a really big number on the current base and I'd love you to get there, but it just seems like a very big number. Or have you got a much longer term horizon?
In terms of the strategy, we talked about these things all aligning to our 2025 strategy and we do have a long term horizon on these patient populations that we're talking about, there aren't going to be step changes in them. It's all going to be incremental changes on the way through. As we do these acquisitions, obviously we look at the ROIC and the time we're going to take to cross our WACC and we track those fairly carefully and our board asked us about that on the way through. But in terms of operating the companies, getting them to making a positive return on to the P and L at an appropriate time, we think we can track those very quickly. But Dave, did you want to comment on that as well?
No, I think you've got it right. And it's particularly difficult when you start looking at pull through revenue. I mean, you talk about something you're going to try to do with Verily that's going to drive incremental growth. That's very hard to measure. But otherwise, we would expect all of these businesses, certainly, you've got 6 years from now to 2025, probably 2 to 3 years in, you'd expect all these businesses to be ahead of our whack.
So we would be viewing strong double digit returns from the money that we've put to work. We're obviously having to pay interest carry to get from here to there. And as we pay some of that down, we can reduce that spend because we've got tiers to our interest that we're having to pay. So as that debt is reduced, the overall interest rate is reduced as well.
Good. Are there any other questions? Yes. This is probably the last question, by the way.
I'm sorry, I've got 3. My name is Arif Karim from Ensemble Capital. I'm new to the story, so forgive me if these are newbie questions that I should probably know. But just thinking about the SaaS business and the core sleep respiratory business, One question that comes to mind given the long growth runway, low penetration in the sleep business is that why would you split resources between a sort of home focused or non hospital focused practice care management software system, which just seems very different than ResMed's respiratory business. You've got a lot of investment opportunity in the core business.
Why would you divert both management and capital resources away from that? Which leads me to subsequently, is there a long term plan to potentially spin out the SaaS business as it scales? Would that make sense? Or is there something I'm missing in terms of kind of a connection between the 2? Secondly, Philips and ResMed are the 2 largest guys in the sleep apnea business from my understanding.
What will it but Philips hasn't lost material share to you guys necessarily. You both have been consolidating share. Going forward, what will it take for you to win share from Philips? How do the digital initiatives help you differentiate yourselves from Philips potentially in doing so? And then 3rd, I just want to understand, obviously, growing and we've talked about this with the JV with Verily a little bit.
But outside of the JV with Verily, just a summary of the initiatives you guys have taken to increase penetration and awareness of sleep apnea. And globally, the U. S. Obviously is the larger market for you, but there's a global issue. So what are just a brief summary of kind of the initiatives that are in place to grow that awareness and penetration of the market?
Thanks.
Sure. Thanks. Let me start and I'm sure I'll get contributions elsewhere. In terms of the issue of why would we get involved in these other businesses? I think as we've tried to explain today, actually all of these businesses are aligned or adjacent or support our core businesses, our existing businesses.
And we talk about the 936,000,000 sleep patients and the nearly 400,000,000 COPD patients. They're there, but they have been there for a while. And if we just continue to run the same way we are, we'll definitely would move up an S curve in terms of penetration, in terms of capacity of the health systems to service them or to fund them or in terms of reliability of the outcomes that we would get. So we believe it's extremely important for us not to be complacent in these businesses and to be investing in other ways of supporting and developing growth in them. And we're really, really committed to that.
You asked a question about a long term plan to spin out. We don't have plans around that at all. I think you could summarize that. In terms of the competitive environment, it is a competitive industry, but with only a few players. And part of that is because the importance of connectivity and the software means that we for a while now, we don't just sell products, we really sell solutions.
We sell ways of working in effect. And the interaction with our systems and our products means that for people to care for patients using our products, it's part of their workflow. And then for other competitors come in, they've got to introduce their workflow into the provider's environment. And so that does it really has changed the basis of what the industry is. And it's just how to put it, but we're not just a company manufacturing and selling an existing product.
We've changed beyond that and we think that's for the better and the most important part for the better is we can get better outcomes for patients and that's really underlying what creates value. We believe particularly in the sleep that we're the market share leader and that connectivity and the software solutions are really important about that. Did anyone else want to comment on those points?
I'd add one other point, which is that you talk almost like a diversion of resources. One of the aspects of building scale to the Software as a Service business in particular is so that it can resource and fund and drive its own needs. So that while we won't expect and get good collaboration between these businesses, it's not a distraction. It's a
mean, hopefully, one of the things you've seen today
is between Raj and Dave Van Sickle, I mean, hopefully, one of the things you've seen today is between Raj and Dave Van Sickle, in particular, the drivers of those two businesses are really, really, really strong. So we think we've got enough resources from a management perspective and from a financial perspective to be able to do these things simultaneously.
And sorry, go ahead.
One other comment to your question really is what we try to do is meet patients who can benefit from our sleep apnea therapy and COPD therapies in the context of their end, whether it's in their home, in the hospice, in skilled nursing facilities, in long term care facilities. What we're trying to do is drive efficiencies with how those individuals are identified and how they're managed for on our therapies through these software platforms. And we've shown that we can do that very effectively with Brightree in the HME setting, and the expectation is that we're going to do that in these other care settings as well. And so it's important for us to buy software businesses that have good profit profiles on their own so we can easily generate a compelling return on the investment we make from an acquisition perspective. But in addition to managing them for profitability and growth, we really do want to drive the intersection of sleep apnea and COPD identification and care management in these care settings as well through software platforms.
And we think these software platforms give us a unique way to do that, that to Rob's point that we couldn't do independent of having those software platforms. That's really the thesis.
And to your third point on what other sleep innovations do we have, that's really the subject of our R and D and our R and D roadmaps, which we don't disclose at all. But I would say, you know, in the last two quarters, we released 2 fantastic masks. We've got a very strong product pipeline and we continue to invest. And we're absolutely not done even in the core technology in the sleep space to keep going there. And again, many of our initiatives we're just not in a position to disclose, but it continues to be a focus of investment for us.
I think we've run out of time for that. I'd like to just summarize and say thank you very much. Thanks for the questions and the attention. Thanks so much for coming. I hope you get a feel for our enthusiasm and passion for both our core sleep businesses and the ways in which we're expanding that and building into new areas that are going to support and create value for everyone involved with ResMed.
Thanks again for everyone on the webcast. And with that we'll sign out. Thank you.