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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