Building from the Bottom Up

In today's pressure-packed business environment, the words “breaking even” aren't especially welcome. But for Iowa Health Home Care, the concept is one component of a long-term strategy to obtain and maintain customers in the competitive home health care industry.

The Des Moines, Iowa-based company is a full-service home care agency that provides HME, home nursing care, hospice and infusion therapy to Iowa residents, most of whom are managed care beneficiaries. Only 25 percent of its customers are covered by Medicaid or Medicare.

Originally named InTrust, the company was formed in 1998 by Central Iowa Hospital Corp., which includes Iowa Methodist Medical Center, Iowa Lutheran Hospital and Visiting Nurse Services. In March of 2004, InTrust became Iowa Health Home Care to align itself more closely with Iowa Health System and its affiliates throughout the state.

Several years ago, the company decided to focus on equipment repairs, an often-neglected area of home care. According to James McDonald, the company's executive director of HME, that focus has resulted in building a customer base grounded in satisfaction and loyalty.

“Our mindset is that we are trying to take a longer-term approach,” says McDonald. “Our underlying philosophy is that we try to be as profitable as we can on the repair business — but there are going to be instances where we aren't.”

He adds that although the company tries to contain these losses, it evaluates the situation with a broad view.

When IHHC repairs a $5,000 wheelchair that was bought from one of its competitors, McDonald knows he is getting an opportunity to develop loyalty from that owner. As he points out, the customer is going to need another wheelchair in the future.

“We want them to come to this dealership to get that new chair when it's time, so we are going to take care of them now,” he says. “Not only that, but we are a full-service agency here, so eventually they will most likely need another type of equipment in the future, as well as certified or private-duty nursing, infusion therapy or hospice.”

Things to Think About

McDonald explains there are other factors the company considered before building a repair business. Management wanted to get a better handle on the costs associated with outsourcing repairs, and also wanted to raise the quality of service provided to its customers.