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CHRISTOPHER T. FEY - U.S. PREVENTIVE MEDICINE
CEO Interview - published 10/02/2006
CHRISTOPHER T. FEY is the Founder, Chairman, and Chief Executive Officer of U.S.
Preventive Medicine, Inc. Mr. Fey has been involved in the healthcare industry
for more than three decades. As the Founder, President, and CEO of HealthCare
USA - launched as a startup, with $3.6 million in venture capital - Mr. Fey
assembled and led the team that built HealthCare USA into a profitable, multi-
state licensed HMO that was acquired within two years by publicly held Coventry
Health Care Corporation at a price of $45.3 million. Mr. Fey remained as
President and CEO of HealthCare USA, as well as a senior officer with Coventry
until he resigned to launch a direct to consumer diagnostic company,
HealthScreen International, Inc., and HealthScreen America. Small Business
Computing magazine ranked this company one of the most innovative technology
businesses in 2000. The company was also one of 12 runners-up in the prestigious
USA Today/Rochester Institute of Technology Quality Cup the following year.
Other runners up included Master Card and AT&T. Mr. Fey launched U.S. Preventive
Medicine, determined to create the leader in the growing field of prevention,
wellness, and healthy aging through the internal development and/or acquisition
of accretive business models in this space. Mr. Fey is a member of the American
College of Health Care Executives, American Hospital Association, Disease
Management Association of America, and the Society for Atherosclerosis Imaging.
Mr. Fey is a graduate of the University of Florida.
SECTOR HEALTH SERVICES
TWST: What is U.S. Preventive Medicine?
Mr. Fey: The business of U.S. Preventive Medicine is to provide our customers
with "More Good Years." We accomplish this by aggregating the best clinical
services available for preventive health care and individualized health
planning.
The backdrop in which U.S. Preventive Medicine operates is one in which nearly
50% - one out of two - of those who read this interview will likely have a
catastrophic event related to cardiovascular disease. In 2003 the American Heart
Association reported almost a million deaths from cardiovascular disease. The
likelihood of cancer or stroke are equally staggering. In a direct sense, the
monies spent on healthcare in 2005 were almost $2 trillion, without any
calculation of collateral expenses or losses. That annual healthcare bill is
projected to be $3.5 trillion within four years.
The US spends more than twice per capita on health care than any other country
in the world, but when analysis of the outcomes of health care and quality of
life are performed, surprisingly the US is literally just above Cuba in such
rankings.
The method of our healthcare system is the core issue that U.S. Preventive
Medicine addresses. Traditional medicine focuses on sick care - treating people
when they present with illness - at a time when the cost of treating them is the
highest and the outcomes are the lowest. This is the "market opportunity" that
U.S. Preventive Medicine has targeted. The need for preventive health care and
the benefits that it can bring to the healthcare industry shapes the business of
U.S. Preventive Medicine.
We've established a very clear mission that is to improve the quality of health
and longevity of the individual, and, most important, to achieve this by
partnering with physicians, hospitals and employers to organize and advance a
culture of prevention resulting in "more good years" for all.
Research indicates that this market already exists as individuals are spending
billions of dollars each year in pursuit of more good years - vitamins, exercise
equipment, and other means. Unfortunately, the health consumer has had to focus
on resources outside of hospitals, outside of physicians' offices, outside of
clinical medicine. They have turned to unproven strategies with largely no
clinical evidence to support approaches that proclaim to provide "more good
years." U.S. Preventive Medicine believes that the focus has to change; local
hospitals and physicians are in the best position to help consumer focus on
prevention and proactive healthcare. At U.S. Preventive Medicine, our objective
is to put physicians and hospitals at the core of delivering preventive medicine
to the US population.
We begin that process by providing the individual with a comprehensive baseline
diagnostic of their current health. Whether a senior citizen or a young adult,
the current state of health is one of the best predictors of how future health
and health issues will evolve. With a baseline diagnostic, every health consumer
can be viewed in one of three broad categories: first, fundamentally healthy
with minimal risk of health issues; second, some existing risk factors; or
third, they have an existing medical condition.
For the healthy with minimal risk, U.S. Preventive Medicine will provide
services to support their lifestyle choices. We want to encourage their health
choices to date, as well as provide them with a monitoring protocol that says as
they age, it is important to monitor certain aspects of their health relative to
their age and gender, and we will provide that protocol and those services.
Those who are healthy with some risk factors represent the group that should
receive very aggressive intervention - anything from behavior modification to
drug therapy, to surgery. Again, we would suggest a monitoring protocol that
follows them through the evolution of their life with appropriate monitoring and
testing procedures to ensure optimal health as they age.
And lastly, with existing conditions, we know that one of the biggest challenges
of the chronically ill is modifying their lifestyle and behaviors so that they
comply with their treatment and healthcare protocols. If they do those things,
they're likely to minimize the full impact of their existing disease. We're
looking at what types of services can be provided to help them adjust their
lifestyle, adhere to their treatment protocol and therefore minimize side
effects, or progression of their disease. Once again, we would suggest a
monitoring protocol to provide direction as they age so that we ensure optimal
health, and more good years..
At the broadest level, the business of U.S. Preventive Medicine is to address
this continuum for people who self-select, those who want to be proactive to do
more to ensure a higher quality of life and longer life. We will provide a
portfolio of services to them that provide "more good years." We will create and
deliver this portfolio of services through our hospital and physician partners.
Essentially, we are organizing and commercializing the prevention market by
bringing hospitals and physicians into this enormous market opportunity for
preventive services. At the end of the day, we are creating a national network -
the "US Prevention Network" - like minded hospitals and physicians across the
country that will be providing a common set of services, a common customer
experience, anywhere in the country.
Our beta site - where we constructed the business model and defined the customer
experience - is located at the St. Luke Hospital in Sioux City, Iowa, part of
the Iowa Health System. We are now rolling out the business model in markets
throughout the United States.
TWST: Do you only benefit those who "self-select"? Are you also focused on
groups and marketing tools to grow your market?
Mr. Fey: Our entire model is consumer focused. This is very important because,
from a consumer point of view, everyone fundamentally wants more good years.
They want more good years relative to their current condition regardless of what
it may be: healthy or some existing chronic condition.
The way we deliver prevention is diverse. So far our focus has largely been on
personal prevention services, where an individual self-selects. In other words,
they come into one of our Centers for Preventive Medicine and purchase a very
comprehensive suite of diagnostic assessment services.
What we've learned since we launched U.S. Preventive Medicine is that there is a
much larger opportunity to deliver services at the group level as well. Beyond
just focusing on the individual, we have become aware that there is also a wide
variety of services and benefits that we can bring to large organized groups of
individuals, for example, employer groups. So our business intent is to deliver
prevention services across this spectrum from individuals to groups and to do so
with our partners - hospitals and physician groups. In the end we will support
the needs of the individual as well as the community in markets across the
country.
TWST: Would you describe U.S. Preventive Medicine Group Prevention Services?
Mr. Fey: Group Prevention Services will ultimately be an extension of our local
Centers. Group Prevention Services will equip our Centers with tools and
services to take out to their business community, to take to their state and
local government employees, to their regional headquarters, regional offices of
national companies.
Where our physical centers provide services that address the needs of
individuals, Group Prevention Services will provide a portfolio of services that
allow organized groups of individuals to identify risk factors, and individuals
at risk for health issues. Once identified - through services such as health
risk assessments - intervention services will be provided that allow those at
risk with solutions that can minimize risk factors and maximize the opportunity
for "more good years." The services provided through Group Prevention Services
will include a mix of services provided locally by our hospital/physician
partners as well as other services that may be provided by various third
parties. The goal of U.S. Preventive Medicine is to never allow one of our
customers to wonder "what should I do next?" If someone finds a risk factor, we
want to provide the logical solution to their needs. We are simplifying consumer
interaction with health care services.
TWST: What is the business model and what are the benefits for the physicians
and hospitals?
Mr. Fey: U.S. Preventive Medicine provides a very comprehensive and organized
approach to the prevention market. There are two key dimensions to this. First,
from a national and even international perspective, we are creating a brand, a
brand that consumers will turn to for their prevention needs. Every one of our
partners becomes a part of that much larger network. It is a national ecosystem
that we're creating. We live in a Home Depot or Starbuck's society. People want
and expect large, visible brands that provide consistency of experience and
service. Health care has largely ignored this fundamental aspect of our society.
U.S. Preventive Medicine will address this shortcoming in health care. That's
one level of what we provide our partners.
The other level is, we organize the entire business. We provide a turnkey
operation; we create Centers for Preventive Medicine, a consistent suite of
services and a consistent customer experience regardless of where a customer may
be located. Historically, hospitals have not been the most adept at packaging
and creating customer experiences. Additionally, they have not excelled at
marketing and creating consumer demand for their services. U.S. Preventive
Medicine has created a methodology that allows us to come in to one of our
hospital partners and very quickly set up a functional Center for Preventive
Medicine.
So once we build a business model of "prevention" with our hospital and
physician partners, we then focus on the next challenge: consumer behaviors. If
you think about it, all of us have grown up with a preconceived view of health
care. Basically, if we get sick, we go to the doctor; if we get very sick, we go
to the hospital. Everything about the infrastructure is geared to that legacy,
from how services are paid for to how we're training physicians in medical
schools.
U.S. Preventive Medicine is prepared to help the healthcare industry redefine
prevention. As an example, while it is important what you eat and that you
exercise, equally important is understanding the current state of all of your
bodily systems and organs, and what your pre-dispositions to disease may be.
That combination will dictate both the quality and longevity of your life. So
the challenge here is to make consumers aware of this broader definition of
prevention, and then to provide a solution, a convenient place to obtain the
appropriate services.
So a business goal of U.S. Preventive Medicine is to communicate this message of
prevention. As we begin the education and "fulfillment" process, we believe that
health care will follow the track of every other industry in our economy. There
will be a segment of early adopters they will comprehend the message and have
the motivation to act. What we are creating in essence is a natural market
force: early adopters, leading to the second and third wave of consumers and
ultimately a new mainstream approach to health care. This is the same type of
market force that has driven revolutions in how we bank, how we communicate, how
we conduct business. We're building a national network of touch points that a
consumer can conveniently turn to within their community and participate -
purchase products and services that address their core desire for more good
years. U.S. Preventive Medicine will speak nationally for efficiency, and
deliver services locally for convenience and trust.
Underlying our entire business model are some very powerful market forces. One
clear example is the aging of the Baby Boom generation, probably the most
powerful and wealthy generation in US history. They are just now becoming health
aware; they have a passion for living, and they have been known to drive massive
change through every other aspect of our economy and our society. Research
indicates that they fully intend to direct a significant portion of their wealth
at extending both the quality and length of their remaining years. If anyone
thinks they're going to sit back and just wait for some catastrophic event to
shorten their passion for living, they have not been following demographic
trends for the last few decades. This is a generation that drives change; health
care is now in their crosshairs.
While our early goals focused on the creation of a national system of Centers
for Preventive Medicine - 150 to 200 Centers across the country, with each
Center seeing about 1,000 people per year - we recognized that while this
business was a very profitable and powerful model, it would only touch 200,000
or so people a year.
So we stepped back and defined an approach that would allow our core business of
providing "more good years" to reach a much broader population, specifically the
nearly 300 million health consumers out there who fundamentally have an interest
in more good years.
The first step we've addressed is to enhance the way we communicate, the way we
reach out with the broader message of prevention and more good years. To address
this, we decided to create something called the Prevention Channel. The
Prevention Channel will provide us with a platform to communicate broadly in the
market with a message that provides our prevention message. The Prevention
Channel will include various media: broadcast, broadband, and cellular to
communicate general information on prevention. As the early adopters begin to
understand the expanded definition of prevention, they'll then begin to look for
more information regarding how the general information may impact them
specifically. For this, we're launching www.preventionchannel.com. This will
provide a vehicle for an individual consumer to turn to on-line to personalize
stories and messages that they've heard through the Prevention Channel. At
www.preventionchannel.com, consumers will have access to tools that help them
conduct a personal health risk assessment to see what risk factors they may have
and what areas should concern them the most and that may pose a threat to their
health.
Based on the results of an online personal assessment, those who may have high
risk conditions may then be encouraged to visit a local Center of Preventive
Medicine, part of the U.S. Preventive Medicine Prevention Network. Those with
moderate levels of risk would be provided with intervention services such as
behavior modification or health management services to help them address risk
factors that may threaten their long-term health.
TWST: What do you envision for the "Prevention Plan"?
Mr. Fey: The Prevention Plan is a new and developing concept at U.S. Preventive
Medicine. It is built on the premise that "more good years" is a mass market
proposition. While our Centers for Preventive Medicine may be beyond the reach
of some consumers, the Prevention Plan is intended to provide a cross section of
moderately priced services that help an individual address both the assessment
and intervention elements of prevention. While still in the planning stages, the
Prevention Plan is intended to provide a suite of services in the $300 to $500
range that will be within reach of most Americans. Many people want to be
proactive and take more responsibility for their health, but they not sure what
to do. The Prevention Plan is intended to package a suite of services that will
allow the average consumer to take action, to identify risk factors, and act on
those risk factors. U.S. Preventive Medicine believes that one day, most
Americans will want to "carry the Prevention Plan with them at all times." In
the coming months we anticipate piloting this offer prior to a broad market
introduction. We believe that this will be a huge part of the impact that U.S.
Preventive Medicine will have on health care across the country.
TWST: What is the agenda for the company, the game plan?
Mr. Fey: We're now moving into a broad deployment across the country.
We currently have letters of intent with multiple, very well recognized health
systems and physician groups across the country - in California, Texas, Arizona,
Pennsylvania, and in Wisconsin. We have advanced discussions that are leading to
letters of intent that would add as many as 10 other states to that list.
The prevention message is powerful and timely. While we have not really done any
broad advertising or public relations, beyond the activities referenced, within
the last two months we've had 46 inquiries from hospitals and physician groups
interested in opening Centers in their respective markets. So we are already
seeing the momentum building as we begin to followup these letters of intent
with contract negotiations and begin making press announcements. The power of
what we are doing will really begin to impact the market because there is no one
else out there right now that is attempting the type of organization of this
industry that we are doing.
We believe that as press announcements go out announcing we have contracts in
place, the demand for our franchises will accelerate dramatically.
We're creating a very powerful national brand that, we believe, within two years
will be a household name.
TWST: What is the competitive landscape?
Mr. Fey: There really is no other entity that we have identified that is doing
what we are doing. The Mayo Clinic is providing executive health programs and
doing some of these things as are the Cooper Clinic in Dallas or Scripps in San
Diego. However, nobody has really taken this business process, all of these
components and put them into an ecosystem and focused on creating a single
nation consumer brand in health care. So to that extent, U.S. Preventive
Medicine stands alone.
U.S. Preventive Medicine is building two very powerful forces in health care:
first, a national consumer brand, a trusted name to turn to not just information
about prevention, but a source for solutions. Second, we are organizing what has
traditionally been a local, disconnected industry: healthcare. The combination
of these two elements will create enormous value, at one level, for society, for
the health of our country and its citizens, and, at another level, substantial
returns for our business. In the $2 trillion healthcare industry, with an aging
population interested in "more good years," the business opportunities for U.S.
Preventive Medicine are unprecedented.
TWST: Thank you. (DWA)
CHRISTOPHER T. FEY
Chairman & CEO
U.S. Preventive Medicine, Inc.
(214) 288-7544
www.uspreventivemedicine.com
The Wall Street Transcript (TWST) interviews are published verbatim, and TWST does not in any way endorse or guarantee the accuracy of any information or opinions expressed herein and all opinions are subject to change without notice. Nothing herein constitutes a solicitation to buy or sell any securities. TWST interviews with CEOs or other senior executives may include "forward-looking statements", which are based on factors that involve risks and uncertainties. Actual results may differ materially from those expressed or implied. TWST shall have no liability whatsoever for any trading losses arising out of use of this information. Copyright 2005 Wall Street Transcript Corporation. All Rights Reserved.
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