Patient Infosystems Inc. (PATY-OTC: BB)
Interview with: Roger Louis Chaufournier,
Chairman and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their Care Team ConnectTM
(CTC) suite of services to employers, Taft-Hartley funds, government entities, and other
health benefit sponsors that includes proactive chronic condition management, case
management, utilization management, maternity management, smoking cessation, and 24/7
nurse help line services.
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Patient Infosystems is
providing the tools patients and physicians
need to manage chronic illness more effectively
Specialized Health Services
Patient Infosystems Inc.
46 Prince Street
Rochester, NY 14607
Roger Louis Chaufournier
Chairman and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
September 22, 2005
Roger Louis Chaufournier
Chairman and CEO
Mr. Chaufournier has served as President and Chief Executive Officer since April 1, 2000.
Prior to joining Patient Infosystems, Mr. Chaufournier was President of the STAR Advisory
Group, a health care consulting firm he founded in 1998. Mr. Chaufournier was previously
the Chief Operating Officer of the Managed Care Assistance Corporation (1996-1999), a
company which developed and operated Medicaid health plans. Mr. Chaufournier was a former
Assistant Dean for Strategic Planning for the Johns Hopkins University School of Medicine
(1993-96). In addition, Mr. Chaufournier spent twelve years in progressive leadership
positions with the George Washington University Medical Center (1981-1993). Mr.
Chaufournier was a three time Examiner with the Malcolm Baldrige National Quality Award
and has served as the national facilitator for the federal Bureau of Primary Health Care
chronic disease collaboratives. In 2005, Mr. Chaufournier was named by the Rochester
Business Journal as one of the top 50 CEOs.
Patient Infosystems Inc. is a leading health management solutions company based in
Rochester, NY with additional offices in Dallas, TX and Las Vegas, NV. Patient Infosystems
offers its Care Team ConnectTM (CTC) suite of services to employers,
Taft-Hartley funds, government entities, and other health benefit sponsors. CTC includes
proactive chronic condition management, case management, utilization management, maternity
management, smoking cessation, and 24/7 nurse help line services. The integrated model
assures that all the interventions of healthcare management come together in one seamless
system, producing efficiencies that drive improved health outcomes for members and reduce
overall healthcare spending for our clients. The company, through its wholly owned
subsidiary, American Caresource, is also a pioneer in ancillary benefits management. For
more information on Patient Infosystems please go to www.ptisys.com.
CEOCFO: Mr. Chaufournier, what was your vision when you
joined the company, and how has that transpired?
Mr. Chaufournier: When I first joined Patient
Infosystems, my vision was to help lead the transformation of health care delivery by
integrating population health management approaches with care delivery at the point of
CEOCFO: Has that growth
trend continued over the last few years?
Mr. Chaufournier: We have been blessed by significant
and sustained growth over the last five years. We were just named by the Rochester
Business Journal as the top company in sales growth of all Rochester public companies
CEOCFO: What is your
Mr. Chaufournier: The core offering includes three
products and services that are all focused on being able to manage the healthcare needs of
a population. Typically, our customers are self-insured employers or union benefit funds.
We are able to go in and identify patients and beneficiaries that are at risk for chronic
disease. We then stratify these patients by their disease and risk profile. We are
then able to provide programs and services that assist these patients with their
self-management needs. We also offer a pay for performance product for health plans and
physician networks that provide the tools and data systems to manage chronic disease at
the point of service. Finally, we also offer the market the first national ancillary
benefits management company that includes more than 20,000 providers nationally offered at
a significant discount to our customers. At the end of the day, our value proposition is
we help control health care costs while improving the health outcomes of those we serve.
CEOCFO: Tell us about
the need for your service and the industry.
Mr. Chaufournier: The healthcare sector is growing and
a booming industry; now representing 15% of the economy. Double-digit inflation rates for
health care benefits has been a major driver for the need for our services.
Employers and the government have typically assumed the burden of paying for the
rising cost of healthcare. They are continuing to look for ways to control costs. Our
products and services are an important resource aimed at controlling costs
CEOCFO: Who benefits the
most from your service?
Mr. Chaufournier: Clearly, the individual with chronic
disease benefits immensely from our services. However, it is the employer that has the
most at stake in terms of benefiting from our services. Our impact on healthcare
utilization helps control their costs, making them more manageable and predictable. There
is also a major impact on employee moral and we are also able to influence productivity
through reduced lost days of work.
CEOCFO: Do employees
know they need this or do you have to convince them?
Mr. Chaufournier: We do a lot of outreach. The
employees are looking for these services but are not quite sure where to go. Employers are
increasingly gaining control of the management of their health care benefits and looking
for ways to provide enhanced services to their employees while reducing costs
CEOCFO: Does it take
employees a long time to warm up to this kind of service?
Mr. Chaufournier: Typically, we find that once
employees are aware of our service, they take advantage of it and they are very excited.
We have been blessed by very strong loyalty from our customers. We have had some instances
where employees have continued to call us and ask if they could purchase our services on a
CEOCFO: Will you tell us
about American CareSource?
Mr. Chaufournier: We have an interesting situation; in
our journey over the years, we have made several acquisitions. We identified a special
company that was based in Dallas, Texas that we believed had huge growth potential.
American CareSource focuses on the ancillary benefits market. Ancillary providers are all
non-hospital, non-physician providers. That includes outpatient therapies, homecare,
acupuncture, durable medical equipment, and chiropractors and so on. They have developed a
network of 20,000-plus providers. They constantly service populations on a re-pricing
model so they are able to offer a discount to their customers. It will be spinning out
from our company as a new public company in the near future as a dividend yield to our
current investors. It offers our investors a new opportunity for additional value.
CEOCFO: Will you tell us
about the competitive landscape and what gives Patient Infosystems a competitive edge?
Mr. Chaufournier: We have a healthy market sector that
is growing. The market size is several hundred billion dollars up to 80% of the healthcare
spending depending how you look at it. If you add it up, all the revenues of the disease
management company may be slightly over a billion. That means there is significant
opportunity for growth across the landscape. There are a couple of factors that
differentiate us, one is we are able to manage the whole population, not just the sick,
through a comprehensive suite of services. Many of our competitors just focus on the
sickest 2 to 5% of the population and we handle the whole population. Secondly, we are a
nimble organization that has the ability to work with very small employers all the way up
to some of the largest employers in the country. Thirdly, we are one of the few population
management companies that actually works in physician practices to improve chronic
illness. One of the key beliefs that we have is that in order for disease management to be
successful, it has to be in-between relationship with the patient and the physician. Both
patients and physicians need the tools to be able to manage the chronic illness more
effectively. We have been working for the last five years with physician practices around
the country in implementing disease management at the point of service. We are honored by
being able to participate in one of the largest chronic illness programs initiatives in
the country focusing on driving improved chronic disease management in those providers
serving underserved populations. These are the safety net providers taking care of some of
the toughest populations and the most advantaged populations with some of the highest
morbidities in terms of chronic illness. The impact of this program has been staggering
CEOCFO: What is ahead
for the company?
Mr. Chaufournier: We see ourselves continuing our
growth potential. We are always looking for strategic partners and additional merger
acquisitions targets that will enable us add to add to our portfolio of products and
services and continue to grow. We see ourselves as being recognized in the near term as
one of the top population health management companies in the industry and one with a
ten-year history of working with populations to control costs and continue to bring value
to the customer.
CEOCFO: Will you tell us
more about the spin-off of American Care Sources?
Mr. Chaufournier: When we acquired American CareSource,
we were not quite sure which path we would take and whether the ancillary model would end
up being our dominant product. We did a financing and worked with investment bank
institutions around the country to raise capital. As we were raising capital, our
investors suggested that we had an interesting story but the story was complex due to our
two different business models. The American CareSource was on a re-pricing model where
they are taking in revenue and paying providers; our model on the disease side is much
more of a recurring revenue model. Investors encouraged us to consider spinning out
American CareSource and that would bring additional value to the investors while
clarifying our business model message for the external world. After receiving enough
feedback along those lines, we made a decision to do that. It will be spun out as a
dividend yield to the current shareholders. Once we announce the record date, shareholders
of record will be getting a dividend yield of one share in the new company for every two
shares of the current company.
CEOCFO: In closing, why
should investors be interested in Patient Infosystems?
Mr. Chaufournier: Investors should be interested
because the company has been continuing to grow and bring value to its shareholders. It
has enjoyed a strong growth in the stock for the last two years. The dividend yield
associated with the American CareSource spin-out offers gives the opportunity to hold
stocks in two different companies, both with significant growth opportunities in their
respective markets. What is not readily transparent from our public information, filings
and marketing material is the dedication, commitment and loyalty of the employees and
their commitment to the customers. We have developed a reputation of being a very
hands-on, flexible and nimble organization that goes out of its way to meet the clients
needs and ensure that we are delivering the value that our clients need. That is one of
the key factors that continue to come up as perspective clients do reference checks on us
and our investors due diligence on their investments. What they hear from clients is
profound commitment and support they get from the company. That is hard to capture in
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