Father and son find success in drug testing business

The military planted the seeds of the drug testing business in the 1970s as it tried to gain control of drug abuse by troops returning from Vietnam.

In the 1980s, mandated drug testing was extended to all federal employees, and in 1991 to workers in industries regulated by the federal government.

David Minert, 56, of Kuna was in on the industry's ground floor. As an Air Force lawyer he helped set up and coordinate drug testing programs for active-duty Air Force service members in the 1980s.

He later served as a deputy attorney general in Idaho before opening a drug testing company in 1990 in Boise. Today, Minert and Associates is one of the largest drug testing firms in the Northwest. It administers programs for more than 1,000 companies nationwide. With six full-time employees and more than 60 independent contractors, the company claims revenues of $3 million a year.

Minert's son, Jeff, 30, of Meridian joined the firm as operations manager six years ago after earning his master's degree in business administration. Minert and Associates just moved into a new, 3,500-square-foot building at 623 E. Schiller Lane in Meridian.

In an interview, the Minerts talked about the company's growth. Here are excerpts.

Q: You had extensive experience with the law and drug testing programs, but not starting and growing a business. What were the biggest challenges for you early on?

David Minert: The hardest thing was billing out and getting paid. It was a new business model and a new industry. I had to invent things as I went along.

Q: In the early '90s only federally regulated industries were drug testing. Since then the practice has become commonplace in American business. What has driven companies to spend the money on drug testing?

Jeff Minert: Most medium to large employers have testing programs now, and the ones who don't find they become magnets for drug users.

For example, we run programs for a huge number of car dealerships, and they seem to trade employees quite a bit. You'll see a person test positive at one company and apply at another and another, and then you find him finally employed at a dealership with no testing program. Employers with no program wind up with an inferior pool of potential employees.

David Minert: We do a baseline test when we start a program. The positive rate is usually 5 percent to 10 percent, which is much higher than you would expect in the normal population. People who use know to find the places that don't test and tend to accumulate there. Over time, as pre-employment and random testing continues, the positive rate declines. The employees who remain employed never test positive, and then the company simply defends itself by doing pre-employment testing.

Jeff Minert: It makes it imperative for more employers to test, or get stuck with the dregs of potential employees.

David Minert: The vast majority of employers in Idaho who have any sort of safety sensitivity do drug testing now. When I started in 1990, very few companies did it, and they did it sporadically. Now there are a million tests a year done in Idaho alone.

Q: Can you quantify the need for drug testing in private industry?

David Minert: We've done surveys on positive rates. The average is 3 percent to 4 percent. In trucking it is 1 percent to 2 percent. Industries that have not traditionally done testing have a 5 percent to 6 percent rate of positive tests. Pre-employment tests have a 6 percent to 8 percent positive rate.

Jeff Minert: Those numbers don't even reflect the large numbers of people who are offered a job on condition they pass the drug test and never show up to take it.

One of our clients, who manufactures mobile homes, told me recently that three out of 10 new hires never show up for their drug test, so it really helps him find employees who will stick around for the long term.

We also test for a large convenience-store chain. Any time the inventory loss reaches a certain level, they automatically test the whole staff. It's a stop-loss prevention program. They find cocaine and meth users are far more likely to steal, and they usually find one or two employees who are using. Once the drug users are gone, the losses fall back to a normal rate.

Q: What strategies have you used to grow business nationwide?

Jeff Minert: We send someone to the workplace to collect the sample and read the results, which saves time for employer and the worker. We've grown by hiring independent contractors out of state. We've set dozens of people up in their own businesses and found a great marketing strategy that has provided key growth in market share.

For example, we administer drug testing programs for a large theme-park management company in Florida that owns seven or eight parks. We find someone in the area and set them up as a contractor to service that large client and encourage the contractor to sell the service to other companies in the area. We have more than 60 contractors around the country who make $30,000 to $40,000 per year providing the day-to-day testing, while we continue to administer the program.

In Idaho Falls we have a woman doing business as Drug Collections of Eastern Idaho. All she does is take specimens and test them with our kits or send them to the lab. We've helped people throughout the U.S. start their own businesses that way, and we remain in the picture as a third-party administrator. We provide the written policy and the training, schedule random tests, inform employees about positive test results, coordinate with the lab, and do the billing.

Q: What growth opportunities remain in the drug-testing industry?

Jeff Minert: New test kits provide on-site results in five minutes and are a third the cost of previous methods. The convenience and lower cost make testing an option for more organizations than in the past.

For example, many high schools now test their student athletes because we can keep the cost below $10 per test. We are providing them to districts in Oregon, Washington and Idaho, including Homedale, Nyssa, Ontario and Vale. I think as time passes, parents will find it is a tool they can use to help their kids avoid substance abuse.

Q: Are other new technologies providing growth opportunities?

Jeff Minert: One of the biggest advances is being used by probation and parole departments, drug courts and other legal entities to test for alcohol use. Until recently there wasn't a test that could detect alcohol use accurately after a few hours.

We now have a test that detects a specific alcohol metabolite in the urine which is present four to five days after the alcohol was consumed. People on drug court or probation programs can be tested, and we administer a program for Canyon County and others in Idaho. It's new enough that most counties are just beginning to consider it, but they hold up in court, and this is a real area for potential growth for us.

Q: Does competition put pressure on pricing?

Jeff Minert: There are other local companies, but we don't consider them competitors because they are so small. It's tough to be successful and grow to the point we have gotten to because of the complexity of administering these programs. One of our largest clients is URS, which has operations around the world. It hasn't been easy to build a network of collection sites for all the operations they have in progress. We also work with trucking companies who employ 3,000 to 4,000 drivers. They can have an accident anywhere in the country at any hour of the day or night and we have to be prepared to be on the scene for them within two hours.

It would be hard to start a company like this now. So many businesses already have programs. The market is saturated. And we get a lawsuit threat every day. But we've never been successfully sued after more than a million tests.

Brad Talbutt: 672-6737