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CEOCFO CEOCFO Monthly Analyst |
IntegraMed America, Inc. - well
positioned as a full-service fertility company addressing consumers, medical providers,
drug manufacturers
Healthcare BIO
Of CEO, ·
Operates a national network of leading fertility centers comprised of 100 physicians in 19
major markets; ·
Provides Business Services support
in Finance, Administration, Information Systems and Marketing; · Operates a specialty mail order pharmacy that distributes and manages the cost of fertility medication; offers treatment financing programs to self-pay patients through IntegraMed Financial Services;
· Publishes a fertility
web site for patient and provider education. Mr. Canet: “Impaired
fertility affects approximately 10% of women between the ages of twenty-five and
forty-four, or about six million women in the United States. Of these women, about 40% seek treatment annually. It's estimated that the actual expenditure in
fertility services exceeds two billion dollars per year for medical treatment, and an
additional five hundred million per year on medication. If all six million infertile
couples had fertility services, the total market size would approach six billion dollars.
One of the factors that explain the relatively low utilization of services is perceived
high cost and perceived poor outcomes. The
reality is that costs are declining and outcomes are improving dramatically. Assisted Reproductive Technology (ART) services
such as in vitro fertilization are the most rapidly growing segment of the fertility
market. According to The Society of Assisted
Reproductive Technology, approximately 10,000 (ART) procedures were performed in 1987. In 1998 the most recent year for which data is
available, approximately 67,000 ART procedures were performed.” CEOCFOinterviews:
Please tell us where you fit in the industry and detail your revenue platform. CEOCFOinterviews: Would you please detail your product offerings? Mr.
Canet: “Our primary product offering is Business Services to a
national network of preeminent fertility providers, which constitutes the bulk of our
revenue. In this segment of our business we
offer medical providers who specialize in fertility care
Financial Services including financing accounts receivable; financing capital
improvements, cash management and financial reporting.
We also offer Administrative Services including human resource management, legal
services, risk management, and group purchasing. Also
and very importantly, we offer Information Services.
We have a comprehensive IT program where we provide our Business Service customers
with billing and scheduling systems, network and infrastructure management, database
management and reporting. Finally, we offer Marketing Services, which include advertising
and promotions, program development, referring physician programs and Internet marketing. For the drug manufacturer segment of the industry, we have the Research Institute where we position ourselves to provide drug manufacturers with access to our high quality provider network and extensive patient population for clinical trials associated with drug discovery and development. For the Third Party Payer segment of the fertility industry, we offer a Fertility Benefit Management program. Under this program we can offer a turnkey service for insurance companies or employers who have a fertility benefit for their members or employees. Under this program we can quickly and efficiently deliver a nation-wide network of high quality providers, manage the cost of services and ensure patients are well cared for. This is a highly specialized medical service and most insurance companies don’t know who the qualified providers are or how to manage the cost of care. With IntegraMed, they can outsource the entire program to us.” CEOCFOinterviews: In what cities are your fertility centers located? Mr. Canet: “IntegraMed’s own fertility centers – called Reproductive Science Centers – are located in Boston, Long Island, Chicago, San Francisco and Washington D.C. The other 14 provider groups are in New Jersey, Manhattan, Philadelphia, Miami, Orlando, Tampa, Atlanta, Kansas City, Sacramento, Los Angeles, San Diego, Houston, Seattle and New Orleans. This latter group is the distribution channel for our FertilityDirect program.” CEOCFOinterviews: Which brings in the higher revenue, the Reproductive Science Centers or the centers featuring FertilityDirect? Mr. Canet: “The five Reproductive Science Centers that we own and render Business Service products to, represent about 85% of our revenue.” CEOCFOinterviews: What is your competition in the fertility marketplace? Mr. Canet: “From a national perspective in relation to a company that addresses a full market offering to the fertility industry, we do not have any competition. We are the only Company that is implementing the strategy of addressing or maintaining a national network of fertility centers, which cater to the needs of the patients and payers as well as the drug manufacturers. Our centers in the specific market areas that they operate in are competing with other fertility centers, and this is a very competitive field with 3 or 4 major providers in each major market area.” CEOCFOinterviews: What is your market share in each city? Mr.
Canet: “Our market share in the five core markets where we have
full Business Service contracts with Reproductive Science Centers breaks down as follows:
in Boston we have patient revenue of approximately 12 million dollars. We address about
25% of that market. In Long Island, we have
patient revenue of about 12 million dollars and we have about 30% of the market there. In Washington, DC, we have patient revenue of
about 17 million dollars and about 40% of the greater Washington D.C market. In the East Bay of San Francisco we have
patient revenue of approximately 11 million dollars and control about 40% of the East Bay
market area. Our largest contract is in
Chicago where we have patient revenue of approximately 22 million dollars and we control
about 30-35% of the Chicago market area. Those
five major areas represent slightly less than 5% of the fertility market in the United
States. When you consider our 5 fertility
centers and the affiliations that we have with the other 14 centers, we probably address
about 25-30% of the fertility revenue and services in the United States.” Mr.
Canet: “Our strategy is to continue align information, technology
and finance for the benefit for patients, providers, payers and drug manufacturers. The primary element of our strategy includes
selling additional Business Services to leading fertility centers in new major market
areas in the United States, and continuing to increase sales of FertilityDirect and
Business Services to the 14 Affiliates. Mr. Canet: “No, we would not be in a position to acquire a fertility center. If the opportunity arises, then we will sign a Business Services contract with a high quality provider to build a state-of-the-art fertility clinic. This would allow the physicians to provide state of the art fertility care out of one clinic. The physicians benefit because they get access to important support services that allow them to be more successful in a competitive market and it’s good for patients because they get access to the latest technological advances in fertility care. We would finance new facilities, the latest equipment and the account
receivables. The financing component of this business is an important part of our
services. This is part of what we offer, and in return, we get our costs reimbursed and we
get our Business Service fees.
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