Medical Service Co.’s Marx: Be Where Competitive Bidding Isn’t

CLEVELAND — Joel Marx isn’t one to wait and let the ax
fall. He’s a proactive guy. So the chairman of Medical Service Co.,
a 60-year-old home medical equipment business based in Cleveland,
is leading his company into a new market before competitive bidding gets
there.

The company, which focuses primarily on respiratory care but
handles all HME, announced Wednesday that it has opened its seventh
branch in Columbus, Ohio. Serving Delaware, Fairfield, Franklin,
Licking, Madison, Pickaway and Union counties, the new location
extends the company’s reach to most of Ohio’s population. With 150
employees, MSC also services West Virginia.

“Cleveland is in Round 1 of competitive bidding. Columbus is
part of Round 2, not Round 1,” Marx said. “It gives us a couple of
years without a concern about the bid process. It’s not a solution,
but it is a way of taking the pressure off the Cleveland market for
the next couple of years … We’ve been up for a short time now
and we’re showing some good success.”

Medical Service Co. hired two veterans in the HME arena to take
the lead in the new branch: Scott Owsiak, RRT, is branch manager,
while Dori Repuyan is territory manager. Both come from national
HME companies. Overall, the company has 150 employees.

Marx said the Columbus location is the latest of several
strategic moves as the company, which was awarded several contracts
in the Cleveland and Cincinnati competitive bidding areas, ramps up
for the Jan. 1 implementation of the Medicare project.

“We have made some acquisitions and opened up some new offices
in the last several years,” he said. “We are just completing an
addition to our building, which will accommodate our growth over
the next five years.”

The 8,000-sq.-ft. addition will support the company’s
infrastructure — its information technology, billing and
customer service areas, Marx said.

“We’ve also had to be careful and do some restructuring,” he
added. “What a lot of folks don’t understand is that the product we
put out today is going to be paid at the new rates come Jan. 1.
What we are doing now does not have the same revenue stream as what
we did a year ago. As a result, we are all tightening our
belts.”

Marx said that does not mean cutting into the high level of
service upon which Medical Service Co. has built its reputation.
“We’re trying to maintain as much at the patient contact level as
we can,” he said. “Where we are cutting back is in middle
management, adding more technology to keep from adding more support
[employees]. We are doing everything we can to keep the medical
technicians, the respiratory therapists, the people who touch
patients.

“We’re trying to be a flatter organization.”

Marx said that every day brings calls from other companies and
vendors wanting to figure out the right strategy for taking care of
their patients.

“Everyone has a different strategy,” he said. “We are very
fortunate in that we have the capacity to initially take on an
increase in business, but only time will tell what that actually
is.”

Despite being a bid winner in several product categories, Marx
thinks competitive bidding is a bad idea. “Hopefully, we can be
successful in Washington at getting a delay, although that is a
long shot,” he said. “I don’t know anyone who has won a bid who
wouldn’t want a delay so it can be done right — or eliminated
completely.”

Meanwhile, he has to move forward.

“The idea is survival — and having a strategy on how to do
it,” he said. “At least for a couple of years, it’s being where
competitive bidding isn’t.”

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