Ken Trogdon, CEO of CommuniCare

MidlandsBiz:
What is the big idea behind CommuniCare? 

Ken Trogdon:
CommuniCare takes an entrepreneurial approach in a non-profit world; providing an innovative solution for those who cannot afford the prescription medications they need.

It was modeled after a program started by the Kentucky Medical Association and by an individual doctor who saw in his practice the need to develop a private safety net for the working uninsured. 

MidlandsBiz:
How did the project get to South Carolina?

Ken Trogdon:
In the early 90’s, when the Clintons were in office and pushing the national health care issue to the forefront, physicians started thinking about how they could better track the amount of volunteer hours that they donated to the uninsured.

Blue Cross Blue Shield of South Carolina, the Samuel Freeman Foundation and the Robert Wood Johnson Foundation liked what they saw being done in Kentucky and teamed up to fund the project here in South Carolina to see if it could gain some traction. 

At the time, I was the marketing director for the Palmetto Project, a non-profit entity based in Charleston, and was put in charge of the feasibility study for the project. We had the luxury of getting Dr. Bart Barone, who was then President of the State Medical Association and a very passionate advocate for the uninsured, to come on board as our chairman. 

We were able to leverage what Kentucky had developed with their program and bring it to a state that, demographically, had a similar urban/rural mix to South Carolina.  We started as a non-profit under the auspices of the Palmetto Project.

MidlandsBiz:
What did the studies show here in South Carolina? 

Ken Trogdon:
What we learned was that most folks could get in to see a physician – what they couldn’t afford were the medications. 

Using the Kentucky model, where the organization had persuaded two pharmaceutical companies to donate product, we were able to convince Pfizer and Johnson & Johnson to donate to our program in South Carolina, and we were underway. 

MidlandsBiz:
When did CommuniCare become its own entity?

Ken Trogdon:
I left after about a year and a half and unfortunately was in a car wreck.  As fate would have it, Dr. Barone was my surgeon and he explained they were going to spin off CommuniCare and that they were looking for someone to lead the program.  So, in 1997, CommuniCare was created as its own entity.

MidlandsBiz:
He asked you this while you were on the operating table?

Ken Trogdon:
Yes, I was a very captive audience! 

CommuniCare had developed into a strong safety net for the working uninsured.  But the pharmaceutical piece was becoming increasingly more critical because so many diabetics had no means of receiving medications. 

When I came back to CommuniCare, I spent most of my time cultivating relationships with the major pharmaceutical companies and engaging them to support the CommuniCare model. 

MidlandsBiz:
In 2000, CommuniCare formed its own pharmacy and became directly involved in the distribution of medications.  Why?

Ken Trogdon:
We just felt that we could better serve the needs of our growing list of patients by centralizing the distribution of medications.  Up until 2000, we had a network of over 100 community pharmacies around the state, but with the challenges of filing claims and putting drugs back into the system, we decided it would be more efficient if we formed our own mail order pharmacy. 

Looking back, it’s the single defining moment of our business model.  The mail order pharmacy altered the face of what Communicare did and really enabled us to take things to the next level.  Our pharmaceutical partners now did not have to send out replenishments to these multiple pharmacies so it made their life easier and reduced their cost.  This helped us sell the idea to a greater number of pharmaceutical companies. 

MidlandsBiz:
Why do the drug companies give away their drugs?  These are for-profit companies most of which have to answer to shareholders?

Ken Trogdon:
These companies have always been looking at ways to help out.  It’s good PR and there’s also a tax incentive for them to donate.   The drug companies just don’t have the capability to distribute the drugs to the grassroots level – that’s where an organizational structure like ours can really help.

The drug companies know that if it’s a CommuniCare endorsed program that it is going to be managed right.  We have all branded products that have a high street value, so they have to feel secure that we are going to be good stewards of their products. 

MidlandsBiz:
How do your customers find out about your services?

Ken Trogdon:
Most of the people who learn about Communicare come in through a clinic or hospital environment and are then referred to CommuniCare for their medications. 

MidlandsBiz:
How do you define success for a non-profit?  What metrics do you use?

Ken Trogdon:
I’ve looked at where we have come over these past 8 years – our prescription fill rate has either doubled, or tripled, every year.  Currently we fill anywhere from 500 to 1,000 prescriptions a day all of which are mail order.  We have patients in all 46 counties of South Carolina, and last year we filled 142,000 prescriptions or the equivalent of approximately $34 million dollars worth of drugs.  For a little non-profit, that is pretty amazing and tells us we are doing something right.

MidlandsBiz:
Before a patient can receive medications, she has to see a doctor?  How do they pay for the doctor?

Ken Trogdon:
We have approximately 2,500 physicians in our network, representing about 1/3 of the total number of physicians in the state.  We can refer our patients to a physician if they don’t have a medical home.

MidlandsBiz:
Do they customers pay anything?

Ken Trogdon:
The patient pays an annual $20 fee that fee has no bearing on the number of prescriptions that can be filled during a 12 month eligibility period.  Patients can renew after one year. 

MidlandsBiz:
Your customers are the working uninsured?  Define that term.

Ken Trogdon:
Our customers fill out an application that determines whether they meet our eligibility requirements.  Their household income has to be at or below 200% of the federal poverty level, and they can’t be receiving public assistance in any form including Medicaid, Medicare, or private insurance. 

MidlandsBiz:
How strict are you on your definition working uninsured?  How do you avoid fraud?

Ken Trogdon:
Yes, that’s critical for us.

We check our database against the state Medicare and Medicaid database on a monthly basis.  As soon as our patients qualify for these programs, we notify them immediately that they no longer can use our services. 

Now that we have longevity in the market, we have developed a good relationship with the primary care providers, the state Medicaid office, and the South Carolina Free Clinic Association.  They notify us immediately if someone has coverage because we need to know whether people are on any type of entitlement program.

MidlandsBiz:
Talk to us about CommuniCare’s other main initiative, Smiles for a Lifetime.

Ken Trogdon:
In the late 90’s we saw another need in South Carolina – children’s dentistry.  When we spoke with then Secretary of Education Inez Tenenbaum, we found that the single biggest reason why children miss school was tooth decay, but so many families couldn’t afford to see the dentist. 

In 2001, we worked with the Duke Endowment and the Sisters of Charity Foundation and developed the idea of a school based dental facility called Smiles for Lifetime. 

We developed our first clinic in Allendale County and based on its success, we opened additional sites that generally followed the I-95 corridor in Dillon, Manning, and Summerton.

We partner with local school districts and locate dental facilities on the school property.  We have 15 contract dentists who rotate through all the sites.

We have made a tremendous impact here.

MidlandsBiz:
Where do you see the business in 5 years?

Ken Trogdon:
The key to our success is the pharmaceutical companies who endorse our model and we have now built up the know-how and the credibility to push this out to multi-states.  Last month we launched our first out of state pilot program in Texas.  In early May, we rolled out a second project in North Carolina.  By mid-summer we are looking at expanding the model into New Jersey. 

As long as the pharmaceutical companies continue to support us, I see our organization evolving into a national model.

MidlandsBiz:
What revenue streams do you have? 

Ken Trogdon:
The $20 fee we charge is our only revenue stream and does not allow us to make our budget.  It does offset some of our administrative costs, but we are lucky if we break-even. 

My annual budget is approximately 3.5 million dollars a year; yet we give away 34 million dollars worth of drugs.  So the metrics are very tough to define for what we do.  Given the downturn that we are seeing in the economy and the subsequent downturn in donors, I only see programs like ours continuing to grow by need but having fewer funders to fund the model. 

On the pharmaceutical side we are sustained by grants from endowments and foundations.  We receive support through the legislature, corporations, and a sizable number of private donors.  

At our dental clinics, we see children who are on Medicaid.  We are able to use that revenue stream to cover the majority of the operating cost for the clinics. 

MidlandsBiz:
What future needs do you see CommuniCare providing in the marketplace?

Ken Trogdon:
I can’t tell you the calls I receive from folks requesting that we help out with some other health issues.  I have learned that you can’t be everything to everyone, so we will focus on two areas in providing care to the uninsured.  If we tried to do too much, we would fall flat on our face.

Here’s what we do: we address the primary health care needs of the working uninsured and dental care to children of limited income means in rural SC.

MidlandsBiz:
Where do you see Smiles for a Lifetime in 5 – 10 years?

Ken Trogdon:
We could be in every county in SC, but our biggest limitation is the ability to attract and retain dentists.  All of our dentists work somewhere else and fill in with us a couple of times a week.  Our model is based on the school year calendar, so we are closed during the summer and it’s difficult to keep our dentists employed during that time.  

We will continue to grow this program slowly in the state’s most impoverished areas.

MidlandsBiz:
What obstacles do you see to expanding your model going forward?

Ken Trogdon:
It will be incumbent on us to search for alternate revenue streams; that is why we are looking to expand the model out beyond the state. 

The drug companies are being much more aggressive in promoting their own patient assistance programs.  I never thought I would see the day when Lilly, Merck, or Pfizer would decide to run national commercials about their patient assistance programs.

For those programs, patients have to fill out an application every 90 days and then receive a limited number of medications.  For us, we are much more patient friendly – one application gives you access to multiple companies and several hundred branded drugs. 

MidlandsBiz:
Do you have the support of all of the drug companies?

Ken Trogdon:
Takeda, Santa Fe Aventis, Schering, and Wyatt are the only major drug companies we don’t have.   All of the major drug companies support the organization.

MidlandsBiz:
What is your leadership style?

Ken Trogdon:
I don’t micromanage people.  I am more of a big picture guy – not great at the small details, but if I can envision it we usually can find an avenue to fund it. 

We started with 3 employees, and now we have over 50.  We are fortunate at CommuniCare because the people involved at every level feel a sense of purpose and mission; therefore we have a very low turnover rate.  You have to surround yourself with self-starters who buy into our vision. 

We also have a terrific Board composed of both health care and business leaders from around the state. 

MidlandsBiz:
What South Carolina leaders have inspired you?

Ken Trogdon:
Locally, Don Herriott at Roche Carolina was my mentor in the Liberty Fellowship program that I recently graduated from. 

Jim Konduros, the managing partner at McNair Law Firm, has been a strong mentor for me and the organization; he really understands the value of what we are doing. 
 
MidlandsBiz:
Are there any other leaders, particularly in the world of health care that have inspired you? 

Ken Trogdon:
One person that I really admire is a relatively unknown physician by the name of Dr. Paul Farmer.  He is a modern day Albert Schweitzer who lives in Boston, but has done most of his work in Honduras and in third world countries.  The book about him, Mountains Beyond Mountains, is a great exploration about the inequities of the worldwide health care distribution system.