A group of prominent physicians lent their name in a major newspaper ad to an ambitious preventive medicine company that seeks to take advantage of the public’s desire for wellness and healthy lifestyles.
On Jan. 10, David Nash, M.D., chairman of the department of health policy at Jefferson Medical College of Thomas Jefferson University,Philadelphia, became one of 12 physicians on the company’s 14-member advisory board to publish an open letter in the Wall Street Journal. The other two members are a public health professor and a former hospital executive.
The full-page ad introduced the company—U.S. Preventive Medicine, Dallas—and argued that spending only 4% of the nation’s $2.2 trillion annual healthcare expenditures on prevention has led to thousands of unnecessary deaths from such conditions as heart disease, diabetes, stroke and cancer.
Nash, who is chairman of the company’s physician-driven advisory board, says two of its 14 members are investors in the privately held company. All members receive industry-standard honorariums for attending meetings.
It is not unusual for startup healthcare companies to invite physician input, especially when the company intends to market its services to physicians. However, U.S. Preventive Medicine has taken this concept a step further, says Christopher Fey, the company’s founder, chairman and chief executive officer.
For example, in March 2006 Fey convened a two-day meeting where the advisory board pored over the company’s business plan.
"We took their recommendations like it was a governing board and implemented all eight," Fey says. "They don’t have governance authority or fiduciary responsibilities, but we take their advice. We believe physician involvement is the key to prevention."
The company is governed by a corporate board of three inside directors: Fey; Brian Baum, president and chief operating officer; and Boyd Lyles Jr., M.D., executive vice president and chief medical director.
Advisory board members have signed confidentiality agreements, but the board has not yet established a formal conflict-of-interest policy, Nash says.
"We have a gentleman’s agreement on conflict," Nash says. "We tried very hard to make sure there are not flagrant conflicts that board members bring from other commitments. We rely on their honesty. I picked most of these people. We asked them upfront to recuse themselves if there is a conflict. We have to be vigilant."
Whether U.S. Preventive Medicine breaks through the numerous business barriers—including competition and the traditional employer-based and insurance-driven reimbursement delivery system—to market its prevention-based programs directly to employers, doctors and consumers on a cash basis, remains an open question.
Over the past several years, dozens of preventive medicine and wellness companies have been formed, says Don Powell, president and CEO of the American Institute for Preventive Medicine, a Farmington Hills, Mich.-based wellness company founded in 1983.
"Everybody has developed their own niche. There is a big wellness umbrella," Powell says. "Insurance is geared toward illness. Wellness and preventive medicine reduces insurance costs, and lots of companies are contracting to provide wellness and prevention as a benefit to their employees."
Fey says he believes employers and consumers will be attracted to the types of programs the company will offer through its hospital and physician partners because the current delivery system often does not devote enough time and resources to preventive medicine. In fact, a new study released by the U.S. Agency for Healthcare Research and Quality indicates that while quality improved in 2006, preventive care lagged.
"This is a great venture (for doctors) to return coordinated patient-centered care back to the forefront and to concentrate on prevention," Nash says.
Revenue will flow to U.S. Preventive Medicine through licensing and management fees paid to it by providers that will form the U.S. Prevention Network, Fey says. The national network will encompass preventive medicine centers, operated by provider partners, where consumers can access a comprehensive suite of diagnostic tests, imaging studies, health-risk assessments, counseling and intervention services.
"Employers and patients would be the customers to the physicians and hospitals," Fey says. Providers "are interested because this is a new revenue stream."
Over the past year, Fey has traveled across the country, including places such as Sarasota, Fla., and Atlanta, pitching the concept to hospitals and doctors, and signing up investors. So far, several hundred investors have contributed to the private company, including a number of physicians, Fey says.
"The majority of investors are individuals who believe prevention will be the next big platform of the healthcare industry," Fey says.
Over the past 18 months, the company has tested its preventive approach in a pilot project at 150-bed St. Luke’s Regional Medical Center, Sioux City, Iowa.
"We are moving out of the R&D stage" at the St. Luke’s Center for Preventive Medicine "with hundreds of customers," Fey says. "We expect to start other pilot projects in Chicago and other markets over the next several months."
Jay Greene is a former Modern Healthcare reporter and now a freelance healthcare writer based in St. Paul, Minn. Contact Greene at [email protected]