ALRT ALR Technologies Inc. OTC
ALRT has a channel pattern which is also a flag pattern. The flag pattern is bullish and the break of the channel pattern is bullish. ALRT has a very good chance of breaking this pattern and making a move up. I will be watching closely for an entry.....
Shares Outstanding5: 213.53M
Float: 86.03M
% Held by Insiders6: 58.74%
Revenue (ttm): 5.00K
Total Debt (mrq): 6.03M
ALRT Chart
ALR Technologies Inc.
3350 Riverwood Parkway
Suite 1900
Atlanta, GA 30339
United States - Map
Phone: 678-881-0002
Website: Alrt Technology Solutions
Details
Index Membership: N/A
Sector: Services
Industry: Medical Equipment Wholesale
Full Time Employees: N/A
Business Summary
New Technologies to Contain Waste in Diabetes Test Supplies
Opportunity for Medicare to Reduce Millions in Costs
At the same time that the federal government seeks to cut Medicare spending, awareness is growing about a fraudulent practice around diabetes test strips that is running up program costs and putting the health of patients at risk.
At the heart of the issue is the need for patients with diabetes to test their blood glucose levels regularly. Knowing blood glucose levels allow patients to alter their diabetes management strategy if the levels are not near the target.1 Doctors prescribe test strips to patients with diabetes to be used as part of their care plans. It is possible that a portion of test strips paid for by Medicare and other insurers are not used by many patients. Nevertheless, patients covered by health insurance are often resupplied with blood glucose test strips whether or not they have used up their prescription. As stated by Doug Hoey, CEO of the National Community Pharmacists Association in an article by HME News2, "We have heard stories of boxes and boxes of strips being sent to patients, charged to Medicare and the patient can't use them fast enough," he said. "Or the patient is deceased and the supplies continue to mount up at the home.”
Some of the unused test supplies are sold in the black market. While test strips can be legitimately purchased over-the-counter for cash price by anyone, the second-hand sale of these test strips is fraudulent if the strips were obtained through a prescription and reimbursed by Medicare/Medicaid. As such, the term “black market” is often replaced by “gray market” given the fact that selling test strips is not illegal in and amongst itself.
Awareness, outrage, and a call for action are beginning to build around the issue of the black market sale of test strips. Several local television stations have exposed the practice this year. CBS Denver was one of the first to break the story back in February 2011 with their broadcast of “CBS4 Investigates Black Market Diabetes Test Strips”3 exposing “an alarming practice that has the director of one of the nation’s leading diabetes centers and journals issuing a warning to patients.” The alarming practice at the center of the report: the buying and selling of diabetic test strips on the Black Market. A practice that could ultimately cost a person with diabetes their life as recalled, expired and counterfeit strips are bought and sold daily. Only a few weeks later, KENS in San Antonio, Texas followed with a report of its own4.
According to the 2011 National Diabetes Fact Sheet5, 25.8 million people in the United States are affected by diabetes with associated healthcare costs of approximately $175 billion per year (for the year 2007). Many diabetes patients do not have adequate insurance to cover the cost of test strips. Monthly supplies for can run into hundreds of dollars. As the person with diabetes in a Fox Baltimore report6 explained, “Not everybody has the kind of good insurance that I have, and this is really expensive stuff.”
Research7 has shown that through proper monitoring of blood sugar levels and adherence to care plans, diabetes patients are healthier and require fewer visits to the doctor than those who are non-compliant. The importance of following strict procedures in proper diabetes care is best summarized by William Herman, M.D., M.P.H.8, one of the world’s foremost experts on diabetes, in stating, “It’s now well-proven from scientific studies that diabetes control matters, and that better sugar control over years and decades is associated with a reduced risk of complications affecting the eyes, the kidneys, the nerves, heart and blood vessels.” Using test strips that do not meet FDA standards such as many of those sold on the Black Market can result in inaccurate data from faulty strips leading to dire consequences.
One possible solution: to account for the usage of prescribed test strips before more can be provided to the patients. This is possible, as every major provider of blood glucose meters – Abbott, Bayer, LifeScan (a Johnson & Johnson company), Nipro and Roche - has the technology to handle verification of test strip usage. However, because meters from each of these manufacturers are designed slightly differently and vendors of these supplies are faced with the onerous task of pulling the data separately for each system, a clear need exists for a cross-platform technology to bridge the gaps between manufacturers. A few companies have addressed this challenge already.
HealthVault by Microsoft? (NASDAQ: MSFT), WellDoc, and the Health-e-Connect (HeC) System by ALR Technologies (OTCBB: ALRT) all are in the mobile health space and offer potential solutions to the cross-platform dilemma. Juxtaposing the technologies, however, reveals some stark differences.
HealthVault, which does not have Food and Drug Administration 510(k) clearance, is a personal health record storage solution similar to what many companies are doing in the burgeoning electronic medical records arena.
WellDoc has conducted clinical trials comparing their system to traditional practices of diabetes care by measuring A1c (the standard measure for diabetes control) with positive results. The importance of patient compliance to prescribed blood sugar testing was confirmed in WellDoc’s research to reduce A1c levels. The caveat to WellDoc’s system is that it relies on patients to manually entering data into a cell phone several times a day. Manual (user) data entry has been shown through other studies to be time consuming, inconsistent, and an inaccurate representation of actual use.
ALR Technologies’ HeC System, a chronic disease management technology, covers the complete range of compliance and documentation. The HeC System has also been successfully used in clinical trials9 as part of intensive blood glucose monitoring programs. Cleared by the FDA in October for remote monitoring of patients in support of effective diabetes management programs, HeC is a cross-platform system compatible with all the major manufacturers’ blood glucose meters which allows test results stored in a meter to be uploaded. The data is organized for the respective needs of patients, clinicians, test supply vendors and insurers, whether it be encouraging patient compliance or documenting strip count for reimbursement and refill requirements. ALR’s platform also allows for mobile alerts reminding diabetes patients that it is time to test their blood glucose levels.
The Black Market offerings and the subsequent risks involved are not going to disappear on their own, nor will the exorbitant waste of funds relating to non-documented strip reimbursement. Fortunately, steps have been taken in the past to combat similar problems; such as when Medicare and many private insurers began mandating the verification of use for CPAP machines to allow reimbursement for sleep apnea. Given this precedent and the mounting awareness of strip count fraud, it is easy to envision the government taking similar actions to deal with the issues surrounding diabetes test strips. Such action would exponentially grow the usage of technologies such as the HeC System. Medicare provides coverage to 10.9 million diabetes patients and pays over $1 billion* a year for test strips alone.5 10 11 12 13 With the financial pressures in the healthcare industry to regulate costs and provide better disease management, it would seem likely that further actions are imminent.
The New York Times published an article this past weekend titled, “Health Official Takes Parting Shot at Waste.” Written by Robert Pear, the article focuses on commentary from Dr. Donald M. Berwick, the newly departed former administrator of the Centers for Medicare and Medicaid Services (CMS).
Of particular interest is Dr. Berwick’s opinion that, “Twenty percent to thirty percent of health spending is “waste” that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by his agency.” The doctor’s estimates of this “waste” amounts to between $150 billion and $250 billion per year -- monies that are desperately needed in reducing our country’s enormous debt problem and that could also go toward providing better health care service.
Where does this waste come from? Examples of excessive waste abound in the Medicare and Medicaid system. Just one example: the multitude of unused diabetes test strips prescribed for patients to self-monitor their blood glucose levels. Even though they are paid for by CMS, many of these strips are never used. More outrageously, some of the unused test strips are even “resold” on the gray market. This waste and even outright abuse of the system are enabled because CMS does not require adequate accountability of if these test strips are used before paying for refills.
We as a nation simply can’t afford to continue spending like this without better accountability and reform. Given the state of the healthcare system and the well-publicized needs for reform, change will inevitably happen; it’s just a matter of when. Investors will be glad to know that there are countless junior companies well-positioned to capitalize on fundamental shifts in healthcare. ALR Technologies Inc. (OTCBB: ALRT) provides a chronic disease management technology, the Health-e-Connect System, which could provide measurable benefits to CMS and those it covers in the near term. ALR received FDA 510(k) clearance for its Health-e-Connect System for remote monitoring of patients in support of effective diabetes management programs in October 2011.
Specifically, ALR Technologies manufactures a chronic disease management system – Health-e-Connect – that allows sharing of blood glucose data between patients and their providers. The platform is intended to improve patient outcomes, when used as part of an effective diabetes management program, by enabling providers to make immediate medication and lifestyle adjustments and to address patient barriers to diabetes care plan adherence. Improved patient outcomes equate to less health care spending. Health-e-Connect also tracks diabetes test strip utilization – information that could be used by dispensers to curb rampant test strip waste currently contributing to the squandering of millions of CMS dollars annually.
Possessing a similar technology, but possibly carrying upfront costs with it, PositiveID Corporation (OTCBB: PSID) received FDA clearance for its iglucose™ mobile health system for diabetes management in mid-November 2011.
The electronic medical record arena has many firms vying for space. According to Millennium Research Group, the electronic medical record market is projected to grow from less than $1 million in 2009 to more than $8.3 billion by 2016. Software and office equipment maker Xerox Corp. (NYSE: XRX) reported last week that its ACS subsidiary bought cloud-computing company The Breakaway Group to grow its electronic medical records capacities. At the ground-level price point, MMRGlobal Inc. (OTCBB: MMRF) is a leading junior in the electronic medical records space. The company is conducting business with several household names to expand their products including Eastman Kodak (NYSE: EK), Alcatel-Lucent (NYSE: ALU) and privately-held Chartis, Inc.