Alere: Expansion will increase entree to health plans

Alere Medical Inc.

believes its expansion into management of diabetes and respiratory ailments is a big step toward making the company' services more attractive to large health plans and employer groups.

The Reno-based company puts healthmonitoring equipment in the homes of patients, and nurses at Alere call centers regularly contact patients to check their progress.

Alere Medical's latest partnership with Boston's Joslin Diabetes Center to co-develop a diabetes management program and its purchase of Denver-based National Jewish Medical and Research Center's programs in asthma and chronic obstructive pulmonary disease enables it to use the best from both programs, said Ronald Geraty,M.D., chief executive officer.

"We are already talking with several health plans," Geraty said.

Since its inception in 1996, Alere had focused its efforts on cardiovascular disease, making it a leading disease management firm in that area.

In June, it entered into a long-term contract with PacifiCare Health Systems Inc.

that led to a significant expansion of its service, including management of respiratory and kidney diseases.

The contract saw the transfer of PacifiCare's disease management staff to Alere.

It also allowed Alere to provide services to about 800,000 Medicare patients through its health plan clients.

After winning that contract, the Reno company decided to pursue partnerships and acquisitions that would allow it to enter into additional disease categories, Geraty said.

"But to do that we were reluctant to start from the scratch," he said."What we needed to do was to partner with people who are recognized as being the best.While Joslin is nationally and internationally known to be the best diabetes treatment center, the National Jewish Center is the same in respiratory treatment."

The two institutions regard Alere highly.

"We see Alere as a very high-quality company that is growing and has a good reputation in the cardiology and congestive heart failure field," said James Rosenzweig, M.D., director of disease management at Joslin Diabetes Center."We have a large number of educational programs for individuals and groups and that includes web-based educational modules and a variety of other services which we hope to adapt to Alere's own needs of disease management program."

David Tinkelman, vice president of health initiatives at National Jewish, said that his organization looked for a company that had a solid reputation, quality products and the desire to use the National Jewish Medical and Research Center program to broaden its scope of services.

"Alere met all of those criteria," he said.

While the Reno company bought the National Jewish's disease management program all of its staff becoming a part of Alere the agreement with Joslin is more of a consulting partnership in which Alere will use the Boston's organization's medical expertise.

Alere purchased the National Jewish program for cash and will pay an ongoing royalty for an indefinite period.With Joslin, it will pay royalties during its three-year contract that can be renewed.

For these two deals, Alere did not require an injection of capital from its investors.

Reno-based Nevada Ventures and other investment partners had participated in a fresh round of financing when the company closed on the contract with PacifiCare.

The company looks to expand the model it has used to monitor heart patients.

"The goal would be do something similar over time in respiratory and in diabetes," Geraty said."As an example, one of the things we intend to do will be to monitor a patient's glucose level and be able to provide that to their physicians."

Currently, Alere serves about 15 health plans that cover almost 5 million patients.

Chronic obstructive pulmonary disease, one of the new areas for Alere's management program, affects an estimated 12 million Americans.

Diabetes affects 18.2 million.

The company operates call centers in Reno, San Antonio and Minneapolis.

Under the agreement with National Jewish, it plans to open a new call center in Denver.

Immediately, it plans to hire 25 new nurses, and may hire as many as 40, Geraty said.

Alere's expansion into multiple disease areas would not pose a challenge, managerial or otherwise, Geraty added.

The company has the managers in place, he said, and it's getting the clinical expertise from the new partners in the two disease areas.

"I'd say in most cases we are bringing them the management.

They are outstanding when it comes to clinical expertise but we are probably more experienced when it comes to management," he said.