Business That Cares

August, 2002

Last year, the Hawaii region of Fresenius Medical Care North America landed a spot on the Best of the Rest with $14 million in 2000 gross sales. This year, the dialysis provider has jumped onto the Top 250, with a 52.1 percent gain to $21.3 million.

The unfortunate reason for the sales increase is that the number of Fresenius’ patients increased by more than 10 percent over 2001, or by almost 200 patients. It doesn’t help that Hawaii is the state with the highest incidence of diabetes. “About 68 percent of our in-state renal-disease patients have a primary diagnosis of diabetes and we haven’t been able to change that,” says Alvin A. Cecil, Hawaii area manager.

“Unfortunately, we’re kind of in a recession-proof business,” he says. “We don’t have a cure (for renal disease) other than transplantation, and that’s not a cure. The biggest problem we have right now is making sure we have enough clinics, enough chairs and machines to take care of all the patients.”

Fresenius made a big move to meet that challenge last year, opening up a new clinic in Kapolei in June 2001. The 24-station clinic can accommodate 144 patients. At press time, Cecil was hoping to close on a clinic in Pearlridge. That facility will become Fresenius’ seventh in Hawaii.

One of the company’s biggest challenges has been the low level of the Medicare reimbursement, covering about 50 percent of its patients, and private insurers pushing to drive their costs down. Cecil says a dialysis treatment costs about $100 more than the Medicare reimbursement.

Fresenius’ international parent Fresenius Medical AG ADS (NYSE:FMS) is a large, vertically integrated company that also manufactures dialysis machines. Cecil has a conservative sales increase projection for 2002 of between 10 percent to 12 percent, the rate at which the number of Hawaii kidney patients has been growing in the last couple of years.

Says Cecil: “We’re the kind of business that doesn’t advertise. You don’t see any commercials or anything in the paper or anything like that, because we are the type of business that when you need us, you’ll find us.”

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Kelli Abe Trifonovitch