The Market
According to a report in the Journal of the American Medical Association (JAMA), the spending for Spine treatments in the United States totaled nearly $86 billion in 2005, a rise of 65 percent from 1997, after adjusting for inflation. Data from the Agency for Healthcare Research and Quality collected from 23,000 people a year from 1997 to 2005 found that people with spine problems spent about $6,096 each on medical care in 2005, compared to $3,516 in medical spending among those without spine problems. In 2005, American spent an estimated $20 billion on drug treatments for back and neck problems, an increase of 171 percent from 1997. Outpatient treatment for back and neck problems increased 74 percent to about $31 billion during the period. Spending for surgical procedures and other inpatient costs grew by 25 percent to about $24 billion.
The market trends in the treatment of musculo-skeletal injury all point to increased costs to the American public, government and the insurance carriers for the foreseeable future. This creates a major opportunity for Spine Pain Management, Inc.'s model.
As a result of these trends, SPIN has developed and is delivering increasingly innovative programs designed to promote favorable musculo-skeletal outcomes and to increase efficiencies in the delivery of and payment for healthcare services. To that end, we are pursuing the following business strategies:
- Promote affordable health care for patients involved in work related injuries and other accidents.
- Developed a management program to assist injured patients in receiving appropriate treatment to facilitate maximum medical improvement and whenever possible, early return to work.
- Coordinate financial programs with the patient's spine surgeon and Orthopedic surgeons while facilitating appropriate diagnostic studies and treatment by independent doctors who are treating the injured patients.
Strategy and Implementation
SPIN has now begun an aggressive roll-out of our financial services available to spine surgeons and Orthopedic Surgeons. SPIN, the public corporate entity, is not involved in providing the medical procedures, but instead provides financial contract services at the regional, state and local levels. Within our target markets, we identify and target key Spinal Health Care Providers who handle large numbers of accident-type cases and have need for our financial management.
Effectively, SPIN is a Medical Receivables Purchase Company. Doctors in affiliated centers who provide the Spine Diagnostic Injections and treatment have a contract with SPIN to "Shift Financial Risk" in collecting the Accounts Receivable for the medical procedures. That is, these Doctors are willing to be paid by SPIN an "up front" percentage of the gross bill shortly after completion of each procedure for immediate cash flow along with the potential of the referral patient giving additional medical procedures not covered by SPIN. SPIN, on the other hand must take the risk of a rare, but possible, "no settlement" along with having to wait for months until settlement to receive all or some portion of their bill at the time of final settlement. (See Anatomy Of A Case)
As well known, cash flow for doctors has been compromised by various Government programs and Heath Care Insurance companies to a point that many Doctors have to find alternative means to create cash flow outside of the conventionally insured patient health care plans. For this reason SPIN finds Doctors eager to join as affiliates with SPIN's only constraint to opening new centers being cash available to carry the early payments. With more than 1,000 cases engaged from inception (vast majority from just the first Houston Clinic), as time has passed more and more older cases are now settling creating exponentially increasing cash flow allowing SPIN to accelerate new Center openings.
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