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CEOCFO CEOCFO Monthly Analyst |
"To print this page go to file and left click on print" Surecare - a distributed healthcare
company focused on diabetes and respiratory self-management poised for vertical and
horizontal growth Bio of CEO, Dr. Teague was
appointed Chief Executive Officer and Chairman of the Board of the Company in August,
2000. Dr. Teague served as the Chief Medical Officer and Chairman of the Medical Advisory Board since June 1999. He has
served as the Corporate Medical Director for Compaq
Computer Corporation since 1987. In the most recent years of this association
with Compaq, Dr. Teague has been consultant to the healthcare solutions team in marketing
as an advisor and spokesman and to various Human Resources groups. He participated
in the founding of and at executive management or Board levels of several privately held
healthcare services companies. He served as C.E.O. of Respiratory Consultants of Houston, President of Medical Ergonomics, Founder and Board for NPPA of America, Chairman of the Board of Creative Health Resources, and Business Manager for
Breathing Programs, Inc. Dr. Teague
practiced pulmonary, critical care, and occupational medicine for 20 years, leaving
practice in 2000. Dr. Teague is former Director of Occupational Health at Baylor College of Medicine. He continues to hold
academic appointments at Baylor and University of
Texas School of Public Health. Dr.
Teague has previous experience as a hospital medical director and serves on the Medical
Advisory Board of Kindred Healthcare. He
received a B.A. from West Virginia University
and a M.D. from University of Cincinnati. Acuity
Stratification & Risk Assessment offers: Dr. Teague: “SureCare was formed as MediQuik Services Inc.
four years ago, initially specializing in durable medical equipment sales. Over the last
two years, SureCare has evolved into what we refer to as a distributed healthcare company.
Distributed healthcare is the disease focused linkage of goods distribution, such as
testing supplies, pharmacy and over-the-counter products, with consumer education and
experience, while collecting and distributing important clinical outcomes information. It
is in this format that we see our greatest opportunities, and where we intend to move
forward aggressively.” CEOCFOinterviews: What would you say is your most recent and
exciting news? Dr. Teague: “I think the most exciting news is that we
executed a 5 million dollar funding agreement through Chapman, Spira & Carson, LLC.,
in New York, which will supply the basis for our ability to sustain rapid growth to reach
certain corporate milestones. After that, we had a number of exciting occurrences,
including the launching of our respiratory program, the signing of major contracts with
such third party players as Blue Cross Blue Shield of Texas, and also launching an
initiative with Pharmacy Benefits Managers which yielded a contract with Prescription
Solutions.” CEOCFOinterviews: How many programs do you have right now? Dr. Teague: “We are a disease focused company and we are
specializing right now in diabetes and respiratory. We intend to expand our disease focus
to a number of other areas, including those things that accompany diabetes or
complications to diabetes, such as hypertension and heart disease and other chronic
processes that are amenable to population based management such as depression and other
types of chronic conditions.” CEOCFOinterviews: When did you launch your respiratory program? CEOCFOinterviews: Where are your revenues coming from? Dr. Teague: “Our competitors fall into a few different
categories. On the one hand, we are sometimes confused with a type of competition which I
refer to as the pick and ship companies, who are organizations who just sell and
distribute medical equipment and supplies and do not add any dimension of healthcare to
that offering. On the other side, are companies that I refer to as traditional disease
management companies, who have a variety of different types of intervention models,
usually medical intervention models, which are very different from population intervention
models, which is what we do. They have a completely different business model and return on
investment proposition.” CEOCFOinterviews: What would you say is the most important aspect
of your company? Dr. Teague: “I would say that what makes us different and
successful with the population of people that we care for, is the importance of linking
certain supplies and goods that individuals with chronic conditions always need, with
education and support and the gathering of important clinical outcomes data. That program
assists them in removing barriers to accessing the care that they want and need. It also
assists individuals with self-management, but also meets the expectations of their care
providers, like their physicians.” CEOCFOinterviews: Can you talk about the relationships that you
have with your partners and your suppliers? Dr. Teague: “Our most important relationship is with Abbott
Laboratories (NYSE: ABT). Their diabetes-testing product, the Optium Meter, is our current
preferred mail-order product. We have a variety of relationships with other suppliers and
vendors but I would say that Abbott is our strongest one.” CEOCFOinterviews: What is your marketing strategy? Dr. Teague: “We see it as a three-layered process which
involves direct contracting, traditional referral channels of physician offices and
affinity referral channels including hospitals and support organizations. We seek
contracts with third-party players, which could include health plans, third-party
administrators; pharmacy benefits managers, self-insured employers, or anyone seeking a
more comprehensive approach to population management. However, once you have the
contracts, it doesn’t necessarily mean that you are going to get all of the people
that are in that contracted group to be a customer. Therefore, it still requires in any
geographic market, that we have a presence. That does include a presence in physician's
offices and other, what I refer to as ’affinity’ groups. That is to say that we
want to go where the people with the chronic conditions are, and that can mean when they
come out of the hospital and as they receive other types of homecare services, or as they
meet in certain types of support situations and places like the American Diabetes
Association. We like to be in all these places to give our support. We focus on consumer
advocacy, which is removing barriers that allow people to get the care that they
need.” CEOCFOinterviews: How large is your company, and how many reps do
you have to have to put your program forward? Dr. Teague: “Geographically, we are located mainly in Texas,
primarily in Houston and El Paso, with some business in Dallas, San Antonio and East
Texas. We also have a book of business in California. We have two or three people right
now that work full-time for the company, and we have handful more that do it on a
contractual basis, in different geographical areas.” CEOCFOinterviews: Would you need to expand your staffing to grow,
or can you continue to build out with what you have? Dr. Teague: “We can grow a considerable amount with the
staffing we have, but you have to deal with the truism that all healthcare is local.
Therefore, at some point when there is a critical mass of business in a given geographical
area, it does require someone that solidifies your presence in that market.” CEOCFOinterviews: Do you ever see expansion into other states? Dr. Teague: “Yes, our business is focused by leveraging
communication, and information technology, so obviously through the use of a call center
approach along with Internet applications, we are pretty much able to lay out the
infrastructure in the new geography very efficiently. Therefore, yes we pretty much could
go wherever we needed to go in the United States.” CEOCFOinterviews: So anyone can get your product in the United
States, it’s just that your focus is in Texas and California. Dr. Teague: “That is correct.” CEOCFOinterviews: Where are you positioned in the market? Dr. Teague: “There are 16 or 17 million diagnosed diabetics at
this time, with about an equal number that are in the pre-diabetic state. The total care
cost for the diabetes group, exceeds 100 billion dollars and the testing supplies and
management part of this is in the range of about $5 to $10 billion range. The largest
supplier of diabetes testing equipment is PolyMedica Corporation (PLMD), they hold less
that 5% of the total market share. It is a highly fragmented market; we are at the moment
part of the fragment but we do see an opportunity for the market to consolidate in
time.” CEOCFOinterviews: Can you describe your revenue model for us? Dr. Teague: “The revenue market derives from the concept of
the linkage goods and services with the collection of information; that pretty much sums
up the revenue model. In the case of Diabetes, what that means is our call center care
coordinators will contact an individual on a ninety-day cycle, for collecting orders for
diabetes testing supplies, as an example. There may be other things, such as pharmacy and
other products involved, depending on the contract. At the same time that the person is on
the phone, certain important clinical outcomes information can be collected from the
individual, should they choose to participate; we don’t have any programs that are
mandatory programs, but there is always a opt in and opt out opportunity for these
individuals. Once we get people on the phone, well over 90% will choose to
participate.” CEOCFOinterviews: Which generates the most revenue for you,
products or services? Dr. Teague: “At the moment it is product sales. We are seeing
a rapid increase in the desire for services either with or without products.” CEOCFOinterviews: Do you invest in research and development? Dr. Teague: “Yes, our R&D comes from a couple of different
places; we have an academic partner in Baylor College of Medicine, it is the department of
internal medicine. There, we utilize their experts to assist us in building the clinical
algorhythms that underlie our call center clinical status surveys. We can leverage that
resource to any chronic condition, thus expanding our offerings of chronic conditions. The
second piece of R&D has to do with the information and communication infrastructure of
the company in which we have developed our own application, which is a work flow process
application primarily, but also has aspects of customer relations, call center management,
and fulfillment management, integrated into it.” CEOCFOinterviews: Will your future growth come by the addition of
products and services such as the respiratory and hypertension programs, or will it be by
expanding the diabetes program? Dr. Teague: “The answer is yes and more, we have the ability
to scale the company both horizontally and vertically. What that means is we are able to
take on large numbers of people that are members of the chronic disease condition that we
already manage, diabetics for example, we call that horizontal integration. We also have
the opportunity, because of our IT infrastructure, to add new disease space very
efficiently. Therefore, we see a great opportunity in organic growth with the contracts we
already have, as well as new contracts. CEOCFOinterviews: What type of an acquisition would you be looking
at? Dr. Teague: “Initially, we are looking at targets in the
diabetic, respiratory and specialty pharmacy space.” CEOCFOinterviews: Where are you with regards to profitability? Dr. Teague: “We are standing on the threshold of
profitability, we expect to cross that threshold sometime this year.” CEOCFOinterviews: Have you been experiencing revenue growth over
the last year? Dr. Teague: “In the year of 2001, we spent the year doing a
few different things. We were able to sustain revenue growth despite the fact that we were
doing a number of things to accomplish a couple of other goals. We had to improve our
gross margin, which required restructuring a number of contracts. The second goal was to
reduce our overhead expenses; we did that in a fairly substantial way. CEOCFOinterviews: Do you have the cash and/or credit necessary to
build out your business? Dr. Teague: “We see a two-year opportunity with current
funding levels. We feel that this funding opportunity will lead to our ability to create a
more comprehensive and integrated capital structure for the company that will both support
the rate of organic growth as well as our entry into an acquisition strategy.” CEOCFOinterviews: In closing, what would you like to say to your
current shareholders as well as future investors? Dr. Teague: “Surecare’s main message is that we are at the very beginning stages of development of a new concept of population healthcare, called distributed healthcare. We see this as a large and exciting opportunity that will un-fold over the next two-and-a-half years.” disclaimers |
