ONES TO WATCH in ’94 : THREE THAT MAY BE KEY : In-Home Health Care Expected to Blossom in 1994 : Medicine: The already brisk market is likely to be a major beneficiary of reform legislation expected next year.
For the better part of the last decade, the pundits have assured us that home health care was a business on a chartered course with destiny.
Finally, they may be right.
The already brisk market for in-home health care treatment and services is likely to be one of the few major beneficiaries of the reform legislation expected from Washington next year.
Victor Chaltiel, chairman of Torrance based Total Pharmaceutical Care, says he now knows how it feels to be at the right place at the right time.
“We’re in the direction of history,†the Tunisian-born executive said. “It’s what the French call le sens de l’histoire. “
To be sure, in-home health care has benefited for years from two key trends in medical treatment--patients’ preference for remaining in familiar surroundings and insurers’ insistence on using the least-expensive therapies available.
In 1994, however, use of in-home treatment is expected to grow even faster, as the push toward managed health care gains wider acceptance among employers and as technological advances increase the number of diseases that can be treated at home.
As a provider of in-home intravenous medical treatments for more than 1,000 diseases--including cancer, emphysema, hemophilia and AIDS-related illnesses--Total Pharmaceutical is counting on the convergence of these trends to boost its fortunes.
A wholly owned subsidiary of Costa Mesa-based Abbey Healthcare Group Inc. since Nov. 10, Total is now part of the nation’s third-largest home health care provider.
Total deploys a small army of registered nurses to train patients and their families in administering prescribed drugs intravenously. The key: portable, programmable pumps that regulate the flow of premixed medicines.
These pumps, some as small as a paperback book, can allow complete mobility, permitting many chronically ill patients to live comfortably at home and even to hold steady jobs.
Chaltiel argues that it sometimes is actually safer to treat patients at home than in a hospital.
“In the 21st Century, we will look back at 20th Century hospitals just like we look back at medieval surgery,†he said. “The way we put all the sick people together now is weird.â€
Founded in 1984 by a foward-thinking Southern California pharmacist, Total floundered for its first few years.
By 1988, it had built a steady business, primarily as a provider of intravenous feeding supplies and therapies to patients who could not eat or digest food. But while its revenues had grown to $8 million, the company steadily lost money.
In 1989, Chaltiel was recruited to get the business back on track. The Harvard-trained MBA had spent his entire career in the health care field--first with Baxter International, where he rose to a division presidency, and then as the chief executive of Salick Health Care, a West Los Angeles cancer clinic operator.
Two years after Chaltiel’s arrival, Total--by then generating revenues of $31 million--launched its initial public stock offering. Last year, the company had revenues of $63.4 million and profits of $6.9 million. For the first nine months of this year, revenues were $69.6 million and profits were $5.9 million.
Combining with Abbey, Chaltiel said, gives Total the size and strength needed to survive the coming growth spurt.
In addition to expanding Total’s distribution network from 17 states to 44, the acquisition positions the company to win contracts from insurers and managed-care providers.
Chaltiel, who took on the additional title of Abbey’s chief executive as a result of the acquisition, said both companies are well prepared to thrive within a health care framework constrained by the insurance companies’ tightening of purse strings.
Earlier this year, Total was selected as the exclusive provider of in-home treatment by Health Net, California’s second-largest HMO, with nearly a million members.
“We’ve worked with managed care from the time we started; we’re used to it,†Chaltiel said. “In that respect, California is way ahead of the game in health care.â€
Total At-a-Glance
* Company name: Total Pharmaceutical Care
* Headquarters: Torrance
* What the company does: Provides in-home intravenous treatments for people with such diseases as cancer, emphysema and AIDS-related illnesses.
* CEO: Victor Chaltiel
* No. of employees: 960
* Ownership: It is a wholly owned subsidiary of Abbey Healthcare Group, Costa Mesa
* Revenue: $63.4 million (year ending Dec. 31, 1992)
* Earnings: $6.9 million (year ending Dec. 31, 1992)
* Quote: “We have to find more effective alternatives to the hospital.â€
--Victor Chaltiel
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