The Evolution of HRA

By Jill Krueger, CEO, HRA and Affiliates

February 1, 2003

Health Resources alliance was incorporated on February 2, 1995. Of eleven organizations who had the vision to create HRA, all but three remain a part of this rapidly growing organization.

It was the emersion of managed care that served as the catalyst for the creation of HRA. HRA at that time was known simply as "The Strategic Alliance." The primary purpose was to form a managed care contracting entity, but in addition to that, create complementary services (pharmacy and rehab), group purchasing, outcome measures, technology and repositioning senior care providers for the future were all on the radar screen.

As I reflect on this plan, I am amazed at the vision the leaders of these organizations had at that time. Rich Schutt, the Chief Executive Officer of Rest Haven Christian Services led the charge. Rich's visionary skills are renown, so much that he is currently serving as the Chairman of the American Association of Homes and Services for the Aging (AAHSA). It took a team approach to make this work and he certainly had the "A" Team behind him with Dennis Bozzi, the CEO of Life Services Network, Ray Hemphill (Lutheran Senior Service of Illinois), Chuck Newton (Central Baptist Village), Len Wychocki (Franciscan Sisters of Chicago Service Corporation), Mary Riggs (Victory Lakes), Joan DiLeonardi (Lifelink), Wes Ringdahl (Fairview Baptist Village), Frank Mezio (Friendship Village of Schaumberg), Ric Olsen (Covenant Retirement Communities), and Roger Paulsberg (Lutheran Home and Services).

During the first couple of years, the focus was heavy on securing managed care contracts, establishing a centralized billing and case management system. This took an enormous amount of teamwork on behalf of the organizations and they too, were amazing. We had a great team of Directors of Nursing, Admission Directors, Finance Directors, and Administrators.

It was not always easy, but soon we had contracts with every major HMO, Insurance Company and Hospital System in the area. We were "good to go,' but managed care was not. It never penetrated the market like it did on the East and West Coast. Many outsiders questioned the existence of HRA and Alliances in general. But we were survivors and we had an incredible set of resources. So we went to work on implementing the other initiatives which were outlined in our original strategic plan. The timeline of our evolution is outlined below:

1998 - Entered in arrangement to provide management care services to St. Louis Alliance known as Senior Care Network (SCN).

Formed partnership with Sun Healthcare to provide institutional pharmacy services known as Sunscript/HRA to serve approx. 5,000 patients.

2000- Formed partnership with SCN to provide therapy and fitness in the St. Louis Metropolitan area known as Alliance Rehab -StL.

2001- Formed partnership with Health Ventures Alliance (HVA) to provide therapy and fitness in Pennsylvania known as Alliance Rehab HVA.

2002 - Launched our first new product, a Standardized assessment tool known as Senior LIFEsteps.

Sunscript/HRA became Alliance Pharmacy Services serving customers in Illinois and Wisconsin.

2003 - Formed partnership with Covenant Health Network to provide therapy and fitness in Arizona, known as Covenant Alliance Rehab.

4th Quarter - Planning to form Partnership with Senior Resources Alliance to provide therapy and fitness services in Ohio and Kentucky.

4th Quarter - Planning to form partnership with Gerontological Solutions, Inc. to launch technology product to serve a concierge for CCRCs. (Seeking Board Approval)

2004 - 1st Quarter: form partnership with SCN to provide pharmaceutical services in metropolitan St. Louis. (Board Approved)

2nd Quarter - Planning partnership with Connecticut Alliance of Long Term Care (CALTC) to provide therapy and fitness services in Connecticut.

Since having the latitude to implement new businesses, HRA has become one of the most successful alliances in the country. We have grown from one employee in 1996 to over 450 employees in January of 2003.

On a consolidated basis (and including the revenue from our partnerships) we will generate over $30 million in revenue during fiscal 2003. We are anticipating our first dividend distribution within the next six months. We have begun the strategic planning process for next year (fiscal 2004).

We are planning to continue growing our business lines, expanding our partnerships in both rehab and pharmacy, exploring and implementing technology to augment products and services, continuing the growth of our infrastructure and most importantly, ensuring premiere products and services to our customers. We are very excited about where we came from and where we are going. With the banner team of Directors, partners, staff and organizations we work with we have no place to go but up!