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September 13, 2004

Call waiting | South Portland-based IntelliCare responds to demand for its telephone-based nursing service

By Melissa Waterman
Last year, Colby College was looking to hire three nurses to fill weekend and evening shifts at its campus health center. Administrators tried help-wanted ads and word of mouth to fill the positions. But after several weeks of searching, with the academic year nearly upon them, they decided that to staff the health center 24 hours a day, seven days a week, they needed a different solution than having nurses on campus at all times. "Absent the necessary personnel, we didn't really have a choice except to cut back hours," says Stephen Collins, the college's communication director.

Colby's problem isn't unique: A July 2002 study by the U.S. Department of Health and Human Services indicated a growing gap between the demand for registered nurses and the number of nurses entering the profession. The report predicts that by next year the United States will be short more than 149,000 registered nurses. Furthermore, the number of nurses no longer in nursing grew sharply; just 23,000 left the field between 1992 and 1996, while nearly 175,000 licensed nurses did so between 1996 and 2000.

The shortage, which is attributable to a number of factors including nurses' age and their dissatisfaction the demands placed upon them by managed care, has been a boon for IntelliCare Inc. The South Portland-based company, a provider of medical contact center services, employs 150 nurses, most of whom work out of their homes to provide referrals and other non-clinical information to callers. The company's pitch to potential clients ˆ— large physician groups, hospitals, health systems, health insurers and even colleges like Colby, which contracted its after-hours service to IntelliCare for the 2003-2004 school year ˆ— is that its service will save them money and maintain quality care. In addition, IntelliCare's nurses like the company's decentralized structure, which allows them to work predictible hours from home free of the ever-increasing paperwork that forms a large part of nursing these days.

That combination of factors has spurred IntelliCare's growth: CEO Victor Otley III says revenues should surpass $15 million this year, up from $12 million last year. The company recently was named to Deloitte and Touche's New England Technology Fast 50, which lists the 50 fastest growing companies in the region, for the third year in a row. In the last year, it acquired two smaller medical call center competitors. And last year IntelliCare was awarded one of three pilot projects developed by the Centers for Medicare and Medicaid Services, the federal agency that administers the Medicare program, in an effort to prove that providing chronically ill patients with additional services, among them telephone-based nursing, can reduce overall health care costs. "IntelliCare's services and technology provide health care organizations with ways to improve the quality of health care while gaining efficiencies and cost savings," says Otley. "Our growth reflects the increasing demand in the market for these types of solutions."

A view to a call
Two years ago, IntelliCare got an infusion of funds with a $10 million venture capital investment. (See "House calls," Sept. 16, 2002.) The then-five-year-old company used the money to refine its proprietary software and call center technology, develop new Web applications and purchase smaller call center companies. "The expansion capital was used to take our model national," says Otley.

In 2001, the company debuted a health care-specific software application called IntelliView that could be used in a disbursed fashion, akin to the hub and spoke network of commercial airlines. The software links IntelliCare's call center representatives, nearly 80% of whom are nurses working from home, with its data centers in Portland; Earth City, Mo.; Dallas, Texas; Columbia, Md.; Bristol, Conn.; and Williamsville, N.Y.

Nurses and medical specialists screen patient calls at the data centers, then use IntelliView to determine where to route the call based on individual nurses' specialized training ˆ— many have expertise in a specific subspecialty, such as congestive heart failure or diabetes treatment ˆ— and availability. Once caller and nurse are linked, "IntelliView allows for a dynamic workflow," according to Otley. "The system will understand things about [a particular caller] via past conversations and data, and check those against the real world data" the caller mentions on the phone.

IntelliCare's employees do not provide diagnostic advice; instead they use a triage system to determine the patient's status, then offer referrals and other non-clinical information. For example, a person with a stomach virus might call, wondering when his vomiting has become persistent enough to head to the emergency room. A nurse can evaluate the length of his illness, recommend that he avoid liquids until the vomiting has stopped and advise him to call back if the vomiting worsens, or contact his primary care physician in the morning. IntelliCare says the approach provides patients with appropriate advice and helps eliminate unnecessary ˆ— and costly ˆ— visits to hospital ERs.

In addition to helping refine the software, the VC funds helped IntelliCare make acquisitions; it bought NightCall Physician Services in Buffalo, N.Y., in August and NurseAccess from Magellan Health Services of Farmington, Conn. in May 2003. (The company would not disclose purchase prices.) "Our business strategy prompted buying these two companies," says Otley. "[IntelliCare's model] fundamentally changes the economics of running call centers. These two were struggling economically. We approached them and made a compelling case for partnering."

The compelling case is based on the cost savings to be gained without sacrificing quality, says Otley. At in-house medical call centers, only two or three calls may come in on one night, while on another there may be dozens. Regardless of call volume, the staff are still there. IntelliCare, on the other hand, uses its distributed system to send calls directed to its clients anywhere in the country, any time. By serving many clients at once, IntelliCare draws upon economies of scale to provide consistent service by qualified personnel at costs it says are much lower than those of a single in-house call center.

Advising the baby boomers
St. James Hospital in Chicago Heights, Ill. switched to IntelliCare from Ohio-based competitor Beryle early in 2003. "We have saved between 40% and 50% in cost with IntelliCare," says Robert Teolis, senior business strategist for the hospital. "We've found that this is the best way to ensure a consistent response for our 1-800 number." Teolis studied the possibility of joining with several other hospitals to provide 24-hour information but found that even in collaboration with the other hospitals, the economies of scale still didn't balance out. "We're pleased to get the same service and excellent tracking capabilities at less cost," says Teolis.

And Otley only expects the need for such services to grow, as the nation's baby boomers age, enter Medicare and continue to demand health care information and advice. In anticipation of that growth, IntelliCare has spent "time, money and energy," says Otley, on finetuning DidUKno (pronounced "did you know"), which he describes as the underlying engine that supports IntelliView. The end goal is to tailor IntelliCare's service more precisely to callers' needs.

The company's first step into the Medicare market comes with the CMS pilot project it was awarded last year. Partnering with XL Health of Maryland for the three-year project in Texas, IntelliCare provides nurse support services via telephone and computer to 10,000 Medicare recipients suffering from congestive heart failure or diabetes with heart failure.

This year, the company also plans to submit a bid to CMS on a major disease management initiative aimed at Medicare recipients. "The 10 demonstration projects [supported by the funds] would cover 10% of the Medicare population in this country," Otley explains. "Most health care costs are consumed within the senior population." Seniors tend to have long-term medical complaints and are also limited by mobility, thus disease management through call center technology would seem to have clear economic benefits.

As for competitors, Otley says that, other than the big health insurance companies such as Cigna, which operate their own medical call centers, his major obstacle is simply the status quo. "Local call centers are the competition," he says. A local center serving just a few doctors or a single hospital may be unprofitable, yet its managers might not know what to do to improve its viability and maintain quality controls.

That's where IntelliCare comes in; the company says it plans to create at least three more contact centers around the country in the near future, though it won't disclose whether it will acquire existing centers or start new ones. Given its history, though, additional acquisitions seem likely. After all, says Otley, "We've figured out a way to turn competitors into customers."

IntelliCare Inc.

500 Southborough Dr., South Portland

CEO: Victor Otley III

Founded: 1997

Employees: Approximately 275

Service: Medical contact center with locations in Portland; Williamsville, N.Y.; Columbia, Md.; Dallas, Texas; Earth City, Mo.; and Knoxville, Tenn.

Annual revenues, 2003: $12 million

Projected revenues, 2004: $15 million

Recent acquisitions: Williamsville, N.Y.-based NightCall Physician Services (August 2004); Connecticut-based Magellan Health Services' NurseAccess subsidiary, which included call centers in Missouri and Maryland (May 2003)

Contact: 775-2600

www.intellicare.com

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