Tampa company says it has hit the jackpot by targeting chronic illness

1/30/2008 © Florida Health News
By Carol Gentry
ST. PETERSBURG – Some doctors treat physical ailments. Others specialize in mental health. But patients don’t cooperate by splitting themselves into separate spheres.
That’s why Health Integrated has struck it rich by taking on the most expensive patients that health plans enroll: Those who have a mix of chronic illnesses, such as low-back-pain or diabetes, and mental or behavioral health issues, such as drug abuse or depression.
“Our ‘special sauce’ is dealing with behavioral health and medical conditions at the same time,” said Shan Padda, CEO of Health Integrated, at the 2008 Florida Venture Capital Conference on Tuesday. The forum, which drew a record 1,200 entrepreneurs, capital investors and others who help bring ideas and money together, concludes today. 
Padda said HMOs and Medicaid programs that contract out these complicated patients to the Tampa-based disease management company save between $2.50 and $7.50 for each $1 invested. It may sound like hype, but there’s compelling evidence that he’s telling it straight: Standing in front of an audience of major capital investors, he said he didn’t need any money.
Ten other presenters said they did.  About half represented biotech or health-care companies, with the rest in other high-tech fields such as robotics and telecommunications. Nearly a dozen more companies will make a pitch for cash today.
Health Integrated’s sales increased 80 percent last year and the company crossed into profitability in December, Padda said. It now has responsibility for more than 6.5 million patients in Medicare, Medicaid and commercial health plans and employs about 200, most at its Tampa call center, he said.
A Humana medical director in Louisiana, Dr. Larry Cortez, said in an e-mail that Health Integrated has done a tremendous job with the company's Medicare Advantage customers, going "above and beyond on whatever we've asked of them. I can't say enough good things about them."
The chronic-condition market is currently estimated to be worth $3 billion – of which commercial health plans account for about one-third and publicly financed plans the rest – and is expected to grow at least 25 percent a year.
Such patients represent just 7 percent of an HMO’s patients but account for 37 percent of its medical costs, Padda said.  Those costs can be cut dramatically if patients can be encouraged to keep taking medication and to make proper use of primary care.
Sometimes, particularly in Medicaid contracts, that means sending case managers into the “field” to keep track of patients who have recurrent problems with mental illness or addiction and guide them toward services, Padda said.  
“If you help people stay well, they don’t end up in the emergency room or in the hospital,” he said.
Client companies include Humana's Medicare plans in Louisiana and Tennessee; the Medicaid plan HealthPlus, and the commercial plan HealthNow New York. Padda the company doesn't give out sales figures, but they are in eight figures. He and the company's founder, physician Sam Toney, are the major shareholders, he said. Other investors are Blue Cross and Blue Shield of New York and three venture funds.
Among other ideas presented Tuesday were:
--A blood test to detect traumatic brain injury on the battlefield or at the scene of an accident. Banyan Biomarkers Inc., near Gainesville, has found protein biomarkers in the blood of patients who have suffered traumatic brain injuries, said Gary Ascani, president and CEO. These proteins can help doctors determine how serious the injury is early, when intervention may make a difference, he said.
Banyan has licensed University of Florida patents and attracted two of the top faculty members from UF’s McKnight Brain Institute. It has funding from the U.S. Department of Defense and National Institutes of Health, but is seeking $5 million to “move this across the goal line to get it into commercial use,” Ascani said.
--A saliva test that reveals the presence of gum disease before it begins to eat away at the bone. GeneEx, a Miami-area company, says it has developed an easy-to-use diagnostic test that can detect infections before they begin to do damage to the body, said Mead McCabe Jr., president and CFO. The market is huge for the gum-disease test, he said, because it would enable general practice dentists to diagnose and treat gum disease early so that they wouldn’t have to refer patients to specialists.  
--A process for completely recycling used rubber tires into new tires and plastics. Dennis Gormley, CEO of Lehigh Technologies Inc. of Naples, says the company has come up with a process for pulverizing used rubber into an ultrafine powder at its plant near Atlanta. It will soon be building a second plant, said Gormley, who estimated the global market at $2.5 billion.
--Synthetic polymers that carry drugs through the body and into diseased tissues for a stronger punch, by Intezyne Technologies Inc. Habib Skaff, CEO, told potential investors that the targeted treatment has fewer side effects than a drug that is released throughout the body. Intezyne is housed at the Tampa Bay Technology Incubator at the University of South Florida.
Also read the St. Petersburg Time's "Bright ideas corner cash at venture capital forum."