FREDERIC S. GOLDSTEIN - U.S. CARE MANAGEMENT
CEO Interview - published 12/03/2007

FREDERIC S. GOLDSTEIN, MS President & CEO U.S. Care Management has spent his 
career in the health care industry.  After earning a Master of Science degree in 
Health Care Administration from Trinity University in San Antonio, TX in 1984, 
Mr. Goldstein worked as a hospital administrator in both general medical and 
psychiatric facilities. In 1994 he joined HealthCare USA as Vice President and 
General Manager where he contributed to the company's rapid growth from a small 
start-up to an institution with over 28,000 members in Northeast Florida. 
HealthCare USA received the highest quality rating from the Florida Agency for 
Health Care Administration in its review of Florida Medicaid HMOs and was 
eventually purchased by Coventry Health Care.  Mr. Goldstein left HealthCare USA 
in 1996 to form Specialty Disease Management Services (SDM) with the mission of 
applying the same principles of quality care and personalized service he 
delivered to Medicaid populations through HealthCare USA, to various client 
populations across the country. Mr. Goldstein is an expert in the field of 
disease management, and is often called upon by professional organizations, 
academic institutions and government officials to speak on the topic.  Through 
his leadership, the company is effectively directing the government and private 
businesses toward a more compassionate and cost effective way of addressing 
health care issues. The company's innovative primary nurse model and 360° care 
approach has resulted in marked improvements in compliance, utilization, patient 
and provider satisfaction, and health outcomes among government and employer 
groups. SDM was acquired by U.S. Preventive Medicine in 2007 and renamed U.S. 
Care Management to reflect its expanded focus on the entire continuum of 
preventive care from prevention and early detection to personalized care and 
disease management. 

SECTOR - SPECIALIZED HEALTH SERVICES


TWST: We would like to begin with a description of the recent events that have 
taken place in the company. Then would you explain what U.S. Care Management is 
and what it does?


Mr. Goldstein: U.S. Preventive Medicine, which is a company building a national 
brand in the preventive medicine area, recently acquired what was originally 
Specialty Disease Management Services, a company that I founded about 10 years 
ago to provide chronic care management services to private and government 
payers. We are now U.S. Care Management, a wholly owned subsidiary of U.S. 
Preventive Medicine.

TWST: What did Specialty Disease Management Services do in the past? What will 
be the change in focus?


Mr. Goldstein: In the past, we have typically contracted with state Medicaid 
programs as well as some commercial programs to manage individuals with chronic 
illnesses. These are the people who consume the vast majority of health care 
expenditures within any health plan. Whether it is a government payer or private 
payer, it is the 20% who consume 70% or 80% of the medical resources and 
dollars. We manage those individuals through a very intensive program we 
developed that includes a primary nurse model. Through the acquisition, we are 
now in a position to expand the breadth of our services because really it's 
about prevention along the entire continuum of care. We have been focusing on 
those who already had an identified illness or disease, seeking to prevent them 
from progressing further. Under U.S. Preventive Medicine, we will expand our 
offerings to include prevention for those who are either earlier in the 
condition, unidentified or at risk for developing a condition if their behavior 
does not change or their lifestyle issues do not change.

TWST: What was the rationale for this?


Mr. Goldstein: The rationale is that, as I said earlier, if you look at health 
care and recognize 20% consume 80% of the cost, you can understand why the 
health care system in the United States is struggling with this ongoing increase 
in cost. Everybody is looking for solutions, but, if we implemented a model that 
includes prevention as well as managing those with chronic illnesses as the 
Milken Institute study showed, by 2023 we would be saving a trillion dollars a 
year in health care costs. We see this as an expanding market. Obviously, health 
care is the single largest area of expenditure in the United States. We see it 
as a great opportunity to cover that entire spectrum of prevention.

TWST: What will U.S. Care Management be doing and how is it different from other 
companies?


Mr. Goldstein: The main premise of our company is that diseases respond to 
medicine, while people respond to care. We have always focused on a very high 
touch personal approach, working individually with each client. We mobilize 
registered nurses who work with our clients throughout all of the areas they 
need to manage to improve their health status, helping them better understand 
their disease and navigate their way through this complicated health care 
system. Our nurses work with clients, providing education around their disease, 
making sure they follow through with appointments and receive medication, and 
helping them overcome lifestyle barriers that may hinder a client's ability to 
manage their disease. We use a primary nurse model, which means that the nurses 
work with individual clients and establish a relationship with them. We believe 
it is that one-on-one relationship that allows the individual to become focused 
and begin to change their behavior. We know that change in behavior is very 
difficult, so it requires a more intensive approach than has typically been seen 
within the industry in the past.

TWST: Where will the company be going over the next few years?


Mr. Goldstein: We see a growing opportunity within the chronic care management 
area where we focus on various disease states, but we also see that as a 
continuum. With the resources of U.S. Preventive Medicine and their focus on 
prevention for everyone, we will apply our proven method of one-on-one 
personalized care and health coaching to help people make positive behavior and 
lifestyle changes that will help prevent the development or delay the onset of 
disease. We will work the entire continuum from helping people who are at risk 
for obesity become fit and prevent diabetes or hypertension, to helping clients 
with advanced disease manage their illness to prevent secondary conditions and 
improve their quality of life. We will also provide the clinical support 
services for U.S. Preventive Medicine's various prevention products. We'll work 
with employers and government payers to help them achieve better results from 
their health care expenditures, from a cost perspective, but, more important, 
from a quality perspective. When individuals are accessing our fragmented health 
care system today, they are not necessarily receiving the appropriate care or 
receiving the right services at the right time. We want to ensure that not only 
are the costs appropriate but also that the care is delivered correctly and 
efficiently.

TWST: What is the relationship now between U.S. Care Management to U.S. 
Preventive Medicine?


Mr. Goldstein: U.S. Care Management is a wholly owned subsidiary of U.S. 
Preventive Medicine. We will provide clinical support, health coaching, care 
management services and outcomes measurement for the various products offered by 
U.S. Preventive Medicine, from The Centers for Preventive Medicine to The 
Prevention Plan all the way to health plans that incorporate prevention on the 
front-end, as health plans were initially supposed to do.

TWST: Would you tell us more about the value of the proposition for consumers, 
employers, providers and payers?


Mr. Goldstein: What we hope to do and what we believe this model does is provide 
the consumers with better health and a better quality of life. In other words, 
it ties back to more good years. Everybody wants to live out their life as 
healthfully and productively as possible, so the value proposition to the 
consumers is more good years. In terms of employers, obviously they are looking 
at their health care expenditures and saying, "We see this ever increasing cost 
and we want to maximize those dollars." Employers see prevention and chronic 
care management as a way to bend the trend, so they don't see their medical 
costs increase at a rate greater than the national inflation rate. 
For providers, we work very closely with physicians and are an adjunct to 
providers in the community. We help providers more efficiently and effectively 
manage their patients' care by serving as patient advocates, providing 
assistance, support and coaching during the times those individuals are not in 
the providers' offices. 
For employers, they want to have healthy workers. We help employees better 
manage their health so they not only show up (prevent absenteeism), but when 
they show up they are healthier, more effective and more productive during the 
day (decrease presenteeism).

TWST: What challenges could lie ahead for the company? What problems might you 
worry about?


Mr. Goldstein: Obviously, in any industry you have the question of competition. 
We look at that and seek to determine where the industry is going and how we can 
more effectively position ourselves and provide services to meet the needs of 
employers and other payers. There are issues around health care reform, but the 
majority of the current reform initiatives admit that we need more prevention, 
more care management and more disease management, so those may actually create 
greater opportunities. Our biggest challenge is making sure payers and providers 
understand that U.S. Care Management is truly different. We don't mail a 
quarterly newsletter about diabetes control and call that disease management. We 
are interacting with clients every day on the telephone and in their homes, 
helping them change behavior, comply with their treatment plan and improve their 
health. We don't just claim to improve outcomes; we have objective data that 
substantiates our model. 

TWST: What about opportunities for consolidation? 


Mr. Goldstein: Obviously, U.S. Preventive Medicine believes this is a fragmented 
industry and that there is room for consolidation and bringing these various 
pieces together. That is one of the things we will explore as we begin to 
integrate within the company: "Are there opportunities to acquire or bring in 
other pieces of business that will allow us to further the mission?"

TWST: What would you reasonably expect the company to look like in about three 
years?


Mr. Goldstein: In three years, we'll have a much larger national presence in 
both the commercial and government sectors, providing services from wellness all 
the way through chronic care management. Employers and payers throughout the 
country will be able to select which pieces of that product line they believe 
will most impact their employees or their Medicaid or Medicare recipients. We 
expect to see rather rapid expansion of our business.

TWST: Is there anything more you can tell us about the company's strategies as 
you look out over the next few years?


Mr. Goldstein: The healthcare industry in the United States is in a difficult 
position because the industry itself has not been able to demonstrate that the 
increasing costs are producing any better outcomes. We've shown through our 
model that outcomes can be improved and inappropriate utilization can be 
reduced. Strategically, that's our focus and we're going to move that type of 
approach through the entire continuum of care from prevention all the way to 
chronic care management.

TWST: Would you tell us about the backgrounds and the expertise of yourself and 
a couple of your colleagues?


Mr. Goldstein: I received a Master's degree in Health Care Administration from 
Trinity University. I spent almost 10 years as a hospital administrator in both 
general medical facilities and psychiatric facilities. I was on the for-profit 
side of that industry. Then I managed a Medicaid HMO in northeast Florida that 
was originally founded by Chris Fey, called Healthcare USA. That Medicaid HMO 
received a commercial license, had the highest quality rating of any Medicaid 
plan operating in Florida, was awarded a Medicare demonstration project, became 
NCQA accredited very early on and ultimately was sold to Coventry Health Care. 
When I left that company in 1996, I founded Specialty Disease Management in 
early 1997 and have been doing that ever since. 
Charles Smithers is a CPA by training and has extensive background in physician 
practice management, health care finance and operations, international 
consulting work around health and development and health care management. He has 
been with us since 2002. 
Judy White is a registered nurse who has extensive experience in managed care, 
having worked with some of the major health plans in the State of Florida in 
health services management, provider relations and program development. She 
really brings a wealth of expertise in patient management from a high level all 
the way down to the detail of how we work with an individual patient to help him 
or her better manage their care.

TWST: As CEO, what occupies your own attention most on a day-by-day basis?


Mr. Goldstein: At this point, there are a couple of things. One is obviously the 
continuing effort to grow the business, determine what the market is looking for 
and provide appropriate solutions that clearly differentiate us from the other 
players. The other is adapting and integrating our care management model into 
U.S. Preventive Medicine so that we are able to deliver effective care across 
the entire continuum from prevention to chronic care management, while we scale 
it nationally. 

TWST: Would you tell us about the company's relations with its investors? Would 
investors buy USPM or U.S. Care Management?


Mr. Goldstein: USPM is a privately held company; they would buy shares in USPM.

TWST: How many employees does U.S. Care Management have?


Mr. Smithers: As we sit here today, 40.

TWST: Is there anything that you would like to add, especially regarding the 
company's strategies and long-term objectives?


Mr. Goldstein: The long-term objective is to be the brand player in a fragmented 
health care market. USPM has been diligently working to establish that position 
both nationally and internationally. We plan to serve as the engine to provide 
the clinical and client care services to meet that objective.

TWST: You have 40 employees. I understand that you expect to increase that 
number by quite a bit.


Mr. Goldstein: Right, we are anticipating substantial growth. As a matter of 
fact, we are already working on new space. Given what we know is already in the 
pipeline, we are anticipating very rapid growth with a majority of the 
operational focus coming out of Jacksonville, Florida.

TWST: How will you recruit and train your employees?


Mr. Goldstein: We've been very fortunate with the senior management team here as 
well as at USPM, because we have known each other for years. As we have grown, 
we've been able to identify good candidates to meet our growth needs. We are 
able to recruit quality nurses across the country because they appreciate our 
model where they are able to focus on the care of the client. Our training 
programs are very substantial. Judy Welch, a Registered Nurse, is our Director 
of Education and oversees all training programs for our staff. Since we employ 
nurses and other staff out in the communities we serve, they actually work from 
their homes. So, we have developed a very comprehensive initial orientation that 
all staff goes through along with extensive Web-based resources. Typically, when 
we open a new area, we do onsite training for two to three weeks. Then we use 
Web-based technology to provide ongoing education, training and support to all 
staff. 

TWST: Thank you. (MC)


FREDERIC S. GOLDSTEIN 
President & CEO 
Charles Smithers
SVP of Operations and Finance
U.S. Care Management 
(904) 281-0006
www.uscaremanagement.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.