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Integrative Clinic Reports: Marino Profits Rise, Heartspring Expands, Wellspace in Odd Announcement PDF Print E-mail
Written by John Weeks   

Integrative Medicine Clinic Reports: Marino Profits Rise, Heartspring Expands, Wellspace in Retro Announcement

Summary: Reports from both coast show growth in revenues and operations in primary care-driven integrative medicine clinics. Boston-based Marino Centers for Progressive Health generated $650,000 in excess income over costs in 2006, leading to a plan to add 3700 square feet to one of its sites. Across the country Heartspring Wellness Center also announces plans for an additional center in its service inside the Samaritan Health System. Meantime, Boston-based Wellspace, led by a new set of venture capitalists, sends out an oddly optimistic, retro press release ... 

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1.    Marino Center Banks $650,000 Profit in 2006, Sets Growth Plan

The model at the not-for-profit Marino Centers for Progressive Health is working.  The 15 primary care doctors (11 internal medicine and 4 family practice) are seeing patients an average of 30-60 minutes a visit, according to administrator Carmen Pascarella. "We're billing what we do and insurers are paying," he adds. The operation, now in two clinics, fills 7,700 square feet and is about to have another 3,700 built out for a 11,700 total. 
On $7.7-million of net revenues, the Boston-based operation turned an operating profit of $650,000 in 2006.

Image The total set of providers is 35-40, and includes 5 nurse practitioners, 4 licensed acupuncturists, 2 chiropractors, 3 physical therapists, 2 massage therapists, 2 psychologists, 2 nutritionists, 1 social worker and additional registered nurses. Pascarella says that Marino has just set up a task force looking at what the "Marino way" is in integrative medicine. The clinicians meet weekly for 60 minutes of "mostly clinical" discussion states Pascarella, adding: "That meeting's our Bible."

Comment: Marino has earned its success the hard way, after losses of  literally millions in philanthropic support from the Marino family. A turning point: moving away from a CAM only model to a structure built significantly around primary care providers. Interestingly, this history, and recent success, directly parallels to Inner Harmony Wellness Center operation founded by Peter Amato. Amato's lessons for success printed here include the acknowledgment that it's primary care that drives revenues.

2.    Integrative Developments Near Corvallis Oregon

Mary Ann Wallace, MD, writes that her group at Heartspring Wellness Center
is "helping the Emenhiser Cancer Center in Lebanon, OR, add complementary services to their program." Wallace, medical director for integrative medicine for Samaritan Health System, says the approach at Emenhiser, also part of the Samaritan system, is "sort of redefining 'integrated cancer care' to include more parameters that attend to the  mind and spirit of those undergoing chemotherapy and radiation therapy." (Typically, programs will include pastoral counseling, for instance as part of an "integrated" team consisting of the oncologist and nursing staff and perhaps a social worker.) Wallace writes of the additional parameters: "So far, we've hired a massage therapist and are now interviewing for a nutritionist well versed in herbals and nutriceuticals."

Mary Ann Wallace, MD, Heartspring medical director
The Corvallis-based Heartspring Center is also adding primary care as part of new growth. Reports Wallace: "
We are again in the process of expansion, with plans to add primary care, using a somewhat refined 'chronic disease model' to focus on patient education and lifestyle, behavioral changes - utilizing mind-body therapists and stress reduction techniques as the team members with the docs." Wallace points out that they have "a ready team" which consists of acupuncturists, massage therapists and a naturopathic doctor "to help with the whole picture." Heartspring is  setting up a second site, in Albany. Wallace notes that the learning of their five years has led to a variety of additional consulting.

Comment: Note that the expansion, again, is primary care.  The major player in integrative medicine here in Seattle, Seattle Healing Arts (SHA) also thrives on a primary care model. SHA, led by Fernando Vega, MD and Bruce Milliman, ND, has a mix of medical doctors and naturopathic physicians. (NDs are recognized as part of the primary care mix in the state and are primary care providers in some major health care plans.) An earlier Integrator note on the Heartspring operation is here.

3.    Wellspace Pokes up It's Venture Capital Head ...

Mort Rosenthal, a successful software executive and founder in 1997 of Wellspace sold his stake in his ambitious project a half decade ago. His venture capital-backed operation envisioned a national roll-out of branded Wellspace clinics. After five years, Rosenthal publicly acknowledged in 2002 that the model
couldn't economically support a national roll-out. He had a provider mix which was mainly massage therapists and acupuncturists, plus a lone naturopathic doctor who was also an acupuncturist. (The naturopathic doctor's services were limited because Massachusetts has no licensing.) No MDs, no nurses, no primary care and no 3rd party payment. Rosenthal learned that he could generate sufficient revenues to keep the clinic open but there wasn't enough margin to energize the venture dream. Bottom line: there simply wasn't enough profit that could be taken off a massage visit. I followed the cycle closely, serving for a time on the firm's advisory board.

So a press release published through Yahoo Business on January 24, 2007 came as a surprise.
The headline splashes: "Wellspace Reports Explosive Demand for Integrative Medicine." Current owners Paul Clemente and Daniel Braz, both ex-Wall Street people with some healthcare experience, appear to be making another run at another national roll-out. The release states that the business at Wellspace's grew 300% last year. The operation has "gone from one to four locations." The firm's website describes two of the acquisitions. One is a large massage practice since converted to have other providers of natural health care, but no MDs. A second is a single operator, male, integrative gynecology practice. The third is not up on the site. The Wellspace team, according to the release, recently spoke before the Harvard Business School class of consumer-healthcare maven Regina Herzlinger, PhD on "Innovation in Healthcare Service Delivery."

From the title on down, the feel of this release is that of the rise of CAM into consciousness of the mainstream healthcare industry a decade ago. Data about complementary healthcare usage began to drive a lot of pie in the sky business models. Such as Rosenthal's. Do these two new Wellspace owners know something that we don't know which can turn into sustaining gold, not just open the venture capital spigot from unsuspecting but perhaps passionate investors? The revenue growth boasted about in the release appears to be a function of acquisitions, not "explosive demand." Maybe there is still room for magical thinking on Wall Street. Is there a new generation of investors who have no memory of the Wellspace and American Whole Health losses?

Take a look at the release and see what you think. One thing will be clear: the
writer forgets the Rosenthal era by referring to the Clemente-Braz team as Wellspace's founders. One hopes that they haven't also forgotten the lessons hard won in the Rosenthal era. As an esteemed student of history once said, yes, history repeats itself -  the first time a tragedy, the second a farce.

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