Critical Care will expand on home infusion - Critical Care America Inc

Health Industry Today, April, 1991 by Sharyn Rosenbaum

Critical Care will expand on home infusion Critical Care America Inc., formed by the merger of New England Critical Care Inc., Westborough, Mass., and CarePlus Inc., Fort Lauderdale, Fla., plans to expand its products and services beyond home intravenous therapy, focusing its efforts on areas at the forefront of the health care industry.

"We'll focus resources where society spends money on health care--on systems that can treat patients with heart disease and cancer away from the hospital, using I.V. therapy as a base," said Patrick S. Smith, chairman and chief executive officer of Critical Care America and former chairman and chief executive officer of NECC.

Critical Care America's strategy is to provide alternative systems of care to the hospital, using technologies and therapies geared toward non-institutionalized settings for patients with chronic illnesses, notably heart disease, cancer and AIDS. These settings would include the patient's home as well as infusion suites--freestanding facilities where patients could get supervised care.

Smith's vision is to create a "hospital without walls system." "We're trying to create a competitive system to the hospital that reduces the hotel bill," he said.

The company's philosophy is to treat "the whole patient" and develop a broader range of products and services to serve the patient's needs, according to Smith. "A cancer patient has a myriad of needs and will need other treatments (besides I.V. therapy)," he said.

More than a home I.V. supplier

Critical Care America's goal to be more than a home infusion company goes beyond what Smith was trying to do at NECC.

In an interview with Health Industry Today in November 1989, Smith said that NECC wanted to strengthen its position as a provider of specialty services by focusing on home infusion therapies for patients with AIDS, cancer, pediatric diseases and heart disease.

The merger comes at the right time for NECC and CarePlus, not only as a way to increase market share, but from an organizational standpoint.

"We needed an expanded group of people--I was becoming human resource-constrained," Smith said. "From CarePlus' point of view, they felt they were reaching a crossroad--they needed human resource development, quality assurance development, MIS (management information systems) development."

Personnel reduction not planned

All NECC and CarePlus employees will be integrated into Critical Care America, totaling 1,900 employees. The sales forces from both companies will be combined, totaling about 100 to 110 sales reps. As of press time, a national sales meeting for the company was planned for the beginning of April. Training will be ongoing. There are no plans to reduce the sales force, other employees or the executive staff. The merger was designed to expand personnel along with the company's products and services, Smith noted.

The executive staff from the two companies, like the sales forces, will be combined. Bob L. Wood, former chairman and chief executive officer of CarePlus, will take on the role of executive vice president and serve on the company's board of directors. Wayne F. Kenney, former executive vice president of NECC, will serve as president of Critical Care America's Infusion Services Division.

Certain executive personnel will be involved with starting new divisions within the company. The company plans to appoint presidents for each division, Smith noted.

Additional distribution centers, 50 or more, will be opened over the next few years, he said. Critical Care America currently has service centers in more than 50 cities. NECC had a national network of 32 regional service centers, including seven California centers operated by its wholly owned subsidiary, Integrated Care Systems. (Integrated Care Systems, acquired by NECC in 1989, provides home I.V. therapy and nursing services.) CarePlus had 23 regional service centers, including four satellite centers. Critical Care America's home office will be in Westborough, Mass., the former location of NECC, with regional offices in Fort Lauderdale and Gardena, Calif.

Critical Care America also is providing capital for new business ventures similar to the way NECC helped fund the start-up of Integrated Care systems.

The merger process went very smoothly because NECC and CarePlus have similar business philosophies, according to Wood. The merger was completed on Feb. 26 and their intent to merge was announced on Dec. 3, 1990. Both companies, he said, have closely aligned clinical programs, employ full-time therapists and want to differentiate themselves from competitors by capturing business from the alternate site market.

Critical challenges Caremark

Some analysts believe the merger necessitates a re-evaluation of home infusion therapy suppliers. Health care industry analyst Neal Bradsher of Hambrecht & Quist, New York, said Critical Care America has the edge over Caremark Inc., a division of Baxter Healthcare Corp., in terms of personnel stability and quality of service.