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iVOW has the ability to
provide turnkey consultative and management services to hospitals, physicians, surgeons,
and payers and employers for addressing chronic and morbid obesity
Medical/Surgical Obesity Disease Management
2101 Faraday Avenue
Carlsbad, CA 92008
Dr. Michael H. Owens, MD, MPH, FACPE, CPE
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
February 9, 2005
Dr. Michael H. Owens, MD, MPH, FACPE, CPE
President and CEO
Dr. Owens is a physician executive with over 20 years of executive healthcare, managed
care, physician practice management, marketing and strategic planning experience, as well
as 15 years of clinical practice experience. Prior to joining iVOW, inc., Dr. Owens was
President of Imhotep Health Systems, Inc., a healthcare and managed care consulting firm
specializing in strategic business and clinical resource planning and implementation. His
previous experience includes senior management roles with CIGNA HealthCare, the Watts
Health Foundation and the U.S. Public Health Service. His professional certifications and
memberships include Fellow, American College of Physician Executives; Diplomat, American
College of Physician Executives; Diplomat, American Board of Quality Assurance and
Utilization Review; and, Diplomat, American Board of Internal Medicine. Dr. Owens is a
Certified Physician Executive who has published and has widely spoken on the subjects of
managed care, utilization review, clinical resource management and quality. He earned his
MD degree from Yale University School of Medicine, his MPH in Hospital Administration from
Yale University School of Public Health and his AB degree Cum Laude with a major in
Chemistry from Bowdoin College, Brunswick, ME. Dr. Owens completed his Hospital
Administration Residency at Montefiore Hospital in Bronx, NY, and his Internal Medicine
Residency at the University of Washington in Seattle.
About iVOW, inc.
Our business is focused exclusively on the disease state management of chronic and severe
obesity through our iVOW branded offerings. We provide program management, operational
consulting, clinical training services and lifestyle change support to physicians and
hospitals involved in the medical and surgical treatment of severely obese patients. We
also provide specialized vitamins to patients who have undergone obesity surgery.
Over the past 5 years, our industry-leading
consulting and management services have helped nearly 100 hospitals and over 150 surgeons
develop successful weight loss surgery programs and position for Centers of Excellence
designation. iVOWs rapidly expanding iVOW Centers operated under the expertise of
iVOW staff ensures safe & effective treatment for patients struggling with severe
obesity leading to happier, healthier and more active lives.
iVOW, inc., the new corporate name of Vista Medical
Technologies and its subsidiary VOW Solutions, Inc., is traded on the NASDAQ SmallCap
Market under the stock symbol IVOW. For additional information, we invite you to review
our Web site to learn more about our business or to obtain information important to
CEOCFO: Dr. Owens, will
you tell us about your background with iVOW and how it has changed under your leadership?
Dr. Owens: I came to this company back in
September of 2003. At the time iVOW was a technology company called Vista Medical
Technology, which was interested in transitioning into a consulting and management
services company, focused on chronic and severe obesity. I came in as the president, to
what was then a wholly owned subsidiary of the company, VOW Solutions, Inc., and I have
been with the company since that time. I have helped transition the company from its
technology background to having what I believe to be the best-of-class programs for the
addressing chronic and morbid obesity via medical and surgical interventions. We
sold the technology company in April of 2004 and became a pure-play in morbid obesity at
CEOCFO: What is it that you actually do?
Dr. Owens: We have the ability to provide turnkey and
ala cart consultative and management services to hospitals, physicians, surgeons, and
payers for addressing chronic and morbid obesity. We can go in and assess from the
beginning whether it makes sense to financially launch a program in a given market. We
have the ability to help surgeons train to do gastric bypass surgery, if they are already
laparoscopicly trained. We have the ability to assess current operating programs to see
how we can make them more efficient. We can also go in and manage a program so it can run
more efficiently as well as assist it to achieve the center of excellence designations
from both payers and the Surgical Review Corporation.
CEOCFO: Is this the
typical way that hospitals or doctors get involved in newer programs or is it something
more specific to this newer concept?
Dr. Owens: Typically, there are outsourcings of these
programs by hospitals. For instance, hospitals for many years have outsourced things like
wound-care management programs. Bare in mind, hospitals are very good at episodic care. If
a person comes in with a clinical need, the hospital and surgeon would take care of that
clinical need. Therefore, a program like ours offers the opportunity to allow hospitals,
physicians and surgeons particularly, to do what they do best. We can come in put in place
the systems to do the pre-operative assessment, pre-operative treatment to help get the
best scenario in the inpatient setting and then take care of the patient via
post-operative programs after they get out of the hospital, these components are what is
unique about this kind of therapy.
CEOCFO: Will you tell us
about your revenue model?
Dr. Owens: We have consulting services and management
services, so our revenue model involves going in and evaluating programs for a fee as well
and managing programs for which we are paid an administrative or management
CEOCFO: Will you tell us
about the market in obesity treatment and the surgical area?
Dr. Owens: The market has been growing very rapidly. We
test the by going to the trade shows and seeing what kind of volume and activity takes
place at them. We also directly solicit of hospital organizations, pay attention to
consumer demands as well as monitor what the payers are willing to pay for. The market was
growing at such a pace that in 2004 there seems to be an epiphany on the part of the
payers and the insurance companies. This thing is growing so fast and we have not
realistically priced it into our underwriting structures. There was a dramatic shift in
reimbursement payments and willingness to pay in different pockets and markets around the
company. The other thing was malpractice insurance cost had an impact that profoundly
impacted the growth of the market. Many more people were starting to do the surgery and
they were continuing the normal learning curve, so the aggregate performances got worse
and the rates from the malpractice insurance companies got worse. There seems to be some
leveling off of the malpractice insurance rate increases as well as more stabilization in
terms of the attitude of the payers toward reimbursement of the surgery. Those two
insurance factors have driven the demand for new or expanded programs and limited the
number of surgeons we wanted to train to do the work. Now that they have abated or
ameliorated, it is clear that there this is a robust market here. There is simply the
matter of going to where the individual stake holders actually receive their information
and using those venues to get the information to them and target where we want to
CEOCFO: How do you reach
Dr. Owens: Particularly the surgeons that are
interested in this work attend three or for conferences each year among them are the
American Society of Bariatric surgeons, the American College Surgeons, the Society of
American Gastroenterological Surgeons. There are surgical courses held every year in the
spring and another venue is the American Society of Bariatric Physicians. We are at those
annual national programs; we have mailing and marketing programs, and are also targeting
elite programs. We have helped train over 150 surgeons to do this kind of surgery. We
additionally have just recently in the last five months, hired a person who has had a
great deal of experience selling hospitals and their CEO on the benefits of outsourcing
certain hospital services to a disease management company .
CEOCFO: Is there much
competition for you?
Dr. Owens: There are some organizations trying to help
create this space; there are at least three or four organizations, which have been trying
to find the right business model to access it. It turns out that most of the competition
has morphed to the business model that we have. The competition historically is the
surgeons who fill up their own programs and have done well with building their programs
but have not had as much experience on the managerial side, the payer side and the
multi-program development side.
CEOCFO: Why should
hospitals and doctors choose iVOW?
Dr. Owens: We have what we view as a very impressive
array of talent. One or our AVPs built the largest program in the country and
another helped to build one of the true pioneering laparoscopic bariatric programs in the
country. Between the two of them is twenty-five plus years of bariatric surgical program
operation experience. We also have on our staff, people with very good managerial
experience. We acquired Sound Health Solutions, which is a company based out of the
greater Seattle area, which has the best multidisciplinary medically anchored model for
chronic and morbid obesity that has contracts with the national organizations. If you are
chronic or morbidly obese, we can take care of your obesity issue regardless of where you
fall on the spectrum. On top of that, we have a very significant healthcare, insurance
payer, and employer contracting experience, which we think helps differentiate us
significantly from the other individuals in the marketplace who at this point,
fundamentally have surgical experience. We can show the ROI to our customers, which makes
the value proposition understandable and credible.
CEOCFO: What is the
financial picture of the company?
Dr. Owens: The financial picture is that the company
has recently closed the acquisition of Sound Health Solutions in November (2005). It has
underpinned the platform to really address the market from a best positioning standpoint.
I believe that with that acquisition, we now have the medical and surgical models, which
allow us to be able to go and deal with whatever the current conundrums dictate is the
best clinically appropriate intervention. Some stakeholders want to buy medical, some want
to buy surgical; we are now in the position to present ourselves with a solution for all
of them. The medical climate in terms of medical malpractice insurance has improved
somewhat. The payor climate has rationalized that at least now you know who is going to
pay for coverage and in what market. We think those two things plus these acquisition,
position the company well to acquire business and make 2006 a definitive statement year
for us. The challenges that we see are the logical ones of adequate funding to expand the
company to achieve the opportunities that we perceive are out there. We are aware the
sales cycle for hospitals and payers it is not a short sales cycle but the revenue
opportunity is substantial. These things influence the rate of growth in the company. I
think that we are as well positioned as we have ever been and as well positioned as
anybody in this space to benefit.
CEOCFO: Is reaching
investors a focus for you?
Dr. Owens: It is an important focus for us; we are
doing an assessment of what we think is the best way to reach investors. It is an
important part of what we do. We have to better get the message out about we have done
over the past couple of years in building our market-leading platform. We have to have
investors understand the story and the size of the market opportunity. We need for them to
understand our ability to execute as reasons why it makes sense for them pay attention and
invest in us. Successfully doing so means we will have the capital to create significant
value and to flourish in the bariatric space
CEOCFO: What do
potential investors often miss about IVOW ?
Dr. Owens: I think the actual range of talent that we
have in the company. Secondly, that the climate has changed for the types of services that
we offer over the past six months. The so-called controllers of the business, which are
who is going to pay for it and whether there is an appetite to pay for the kind of service
that we offer. It appears that CMS-Medicare and the commercial payors are the payors and
the appetite is growing. We are poised for growth based on improving market
CEOCFO: In closing, why should potential investors show
interest in the company?
Dr. Owens: Investors should be showing interest because
iVOW has built a competency and taken the time over the years to change from a technology
company to be a health services company. It has acquired a competency of staffing, which
is second to none, to be able to seize the opportunity that has identified as the
burgeoning challenge of obesity to the country. They should look at the fact that the
market climate has changed because of what has happened with the payers that are now being
more rational since Medicare has given a favorable proposed National Coverage
Determination for coverage of bariatric surgery. They should look at the fact that there
will probably be three to five Centi- million dollar organizations in this space in three
to five years. I believe that iVOW is going to be one of those, and a leader. They should
look at the fact that even as we speak there are more people becoming morbidly obese every
year than we are actually able to operate on or are treating otherwise. Therefore, there
is ongoing supply and increasing demand for the kind of therapeutic intervention
programmatic platforms our company has the expertise to offer and is bringing to the
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