Calif. Company MedicAlert Looks to Stay Competitive in Changing Landscape

Jan. 08--TURLOCK -- MedicAlert, which announced Monday that it had cut one-third of its workforce, is not leaving Turlock and is optimistic about competing in a changing health care environment, a top executive said.

"We are very committed to the community," Interim Chief Executive Officer Dan McCormick said. "This is our home base. We feel we have a partnership with the community."

Founded in 1956, MedicAlert is known for ID bracelets worn by people with chronic illness, and for helping save the lives of members by supplying crucial medical information to emergency responders.

Citing a decline in business volume, the nonprofit foundation said Monday that it had laid off 31 of its 90 employees. A statement said the 58-year-old organization was realigning resources to better focus on its mission.

McCormick said a recent review concluded that MedicAlert needs to better adapt to business cycles and pressure from competitors. "For 40 years, we were it, we were the industry," the executive said. "The industry has started to attract forms of competition."

He noted that CVS and Walgreens pharmacies sell ID bracelets for diabetics and others with ongoing health conditions. MedicAlert has annual subscribers who not only wear ID jewelry but allow the nonprofit to be custodian of their medical records, which can helpparamedics save their lives in an emergency.

That membership is eroded by mortality and older members who drop subscriptions as their resources become scarce, McCormick said. Today, MedicAlert is faced with the reality that many consumers will buy only a bracelet, and use personal health care applications on their smartphones, he said.

In 2012, the most recent year for which financial disclosures were available, MedicAlert's revenues were down $2.55 million from the previous year and the organization took in $5.7 million less than it spent. Nine employees were paid annual salaries of more than $100,000, with former CEO Andrew Wigglesworth topping the list with $413,623 in pay.

The Form 990 filed with the Internal Revenue Service said the organization had 145 employees that year.

On the other hand, the market is growing for the services that made MedicAlert a household name. For example, the wave of retiring boomers will increase the senior population that benefits from MedicAlert programs for people with Alzheimer's disease. In addition, the number of teenagers and young adults with Type II diabetes has been exploding, putting them at risk of diabetic emergencies.

McCormick said MedicAlert will need to appeal to younger consumers and focus on building partnerships such as the one with the Alzheimer's Association. Safe Return is a growing national service that activates local groups and law enforcement when a person with Alzheimer's disease becomes lost. About 60 percent of people with dementia are prone to wander and become confused about their surroundings.

As the layoffs were announced Monday, the MedicAlert call center in Turlock was involved with making sure two Alzheimer's sufferers were returned to where they live. For a $55 annual fee, subscribers receive a service package including a medical ID with the Safe Return toll-free number, emergency response and family notification, and personal health record service.

McCormick said he does not believe any MedicAlert products or services will be discontinued. The organization did close a Washington, D.C., office and eliminated a related staff position.

The board of directors and management staff always are considering additions to the product portfolio. McCormick said he sees potential in wearable devices, such as a GPS device that could help with searches for Alzheimer's patients who have wandered. "I think technology will be very much a part of our landscape going forward," he said.

McCormick was named interim manager in November after the departure of Wigglesworth, the former chief executive officer. Wigglesworth went to work for a consulting firm in Pennsylvania. McCormick is with ETS Associates, a California firm hired to provide executive support for MedicAlert.

The board will search for a permanent CEO in the coming year, while MedicAlert focuses on "continuing to be relevant and vital in the marketplace in which we operate," McCormick said.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.

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