Company Name: Jim's Pharmacy and Home Health; Location: Port Angeles, Wash.; Main Products and Services: pharmacy, home oxygen, nebulizers, CPAPs, ostomy, hospital beds, wheelchairs, lift chairs; No. of Branches: 1; No. of Employees: 29; Web site: www.jimsrx.com

JIM'S PHARMACY and Home Health might be small, but in Port Angeles, Wash., it is mighty. The reason, says president and founder Jim Cammack, is its flexibility.

In many national firms, making changes to accommodate customers' needs can happen slowly. But because his firm is a small independent, he says, it can not only be alert to emerging market needs, it can also respond to them quickly.

“Being here, being local and then responding to the needs that have come up, that's been the key to our success,” says Cammack, whose company services a population of about 60,000 over a 75-mile radius.

By Customer Request

Indeed, Cammack's willingness to listen to customer needs is what drew the company into the home medical equipment industry. After working as a pharmacist for a chain drug store for more than 10 years, he decided to open his own business. The new company's main focus was its pharmacy, but Cammack was encouraged to devote a few feet of space to HME. So he displayed a walker, a wheelchair and a commode.

Then, not long after he opened his store, Cammack heard from a friend who was trying to get a hospital bed for her mother but was having problems because the HME provider she was working with wanted the money up front. She asked Cammack if he could get her the bed.

“Of course, being a new business and just starting up, I wasn't going to say no to anything,” says Cammack. “And that's still the great part about being an independent business — you can make adjustments at any time. So I went out and got her the hospital bed. And that's how I got introduced to Medicare. Overnight, we were in the medical equipment business.”

Cammack's openness to grow by suggestion has also led his company into another niche business: oxygen. As he recalls, one of his suppliers told him it was a business he had to pursue if he wanted to succeed.

“Since we were already doing 24-hour on-call service for our pharmacy and we were a small business, we saw that there was a niche there, especially [when we heard that] another equipment company was going out of business,” says Cammack. “So we jumped into oxygen and developed that stage of our business very rapidly.”

For Their Every Need

Cammack has continued to expand the HME portion of his business over the last 15 years. And while HME sales account for only one-eighth of total revenue, Cammack contends that getting into HME has been an integral part of his business success.

“Profit-wise, I would say HME is an important part of our business,” says Cammack. “Because of the reimbursement cuts in our pharmacy contracts, I don't think we'd be here today if we didn't have HME.”

Carrying HME, he explains, “gives the physician the opportunity to say, ‘Take this [script] to Jim's Pharmacy. You just got out of your cast. They'll get you a walking cast, they'll give you a pair of crutches, and you can get your prescription all at the same time.’”

Then, he says, “Customers who come in to get their prescriptions filled might see a lift chair and decide to buy one for their mother-in-law for Christmas. … It's a synergistic thing.”

It all boils down, Cammack says, to anticipating and serving customer needs. “Making sure that our customer service is right up there is Number 1,” he says. “That to us is probably the most important [thing], because you get one unhappy customer and they're going to tell 10 other people.”

Keeping customers happy has also been paramount to the success of Jim's Pharmacy because word spreads like wildfire in smaller towns. While Cammack has used some traditional methods to market and promote his business — such as advertising on television as well as in newspapers, magazines and the yellow pages — he says that good service continues to bring in referrals from his customers.

“Small towns don't need as much marketing,” says Cammack. “Our marketing basically has been by our service quality that we've provided and through word of mouth.”

What has also helped his business, according to Cammack, is getting involved in the community and participating in local activities.

“When you're in a small town, you get involved,” says Cammack. “I serve on a hospital foundation board, while my son does diabetic education classes at the hospital. All these things we do with a purpose of serving as well as keeping our ears to the ground and making sure [people] know we're out there.”

All in the Family

His concern for the customer has also had a shaping influence on Cammack's plans for the future. After being in the business for more than 30 years, he has decided to retire, but forget about selling to a larger company.

Through the years, Cammack has developed relationships with HME customers who have helped his business grow and to whom he feels a sense of responsibility. So even though he has received numerous offers from larger companies, he plans to turn the business over to his son Joe in April 2002 because he knows his son will do right by his customers.

“I get offers all the time,” says Cammack, “but the problem is with the type of company that we've developed, nobody wants to buy the whole thing. [Some companies] would love to buy the respiratory or the DME portion. Safeway would love to buy the pharmacy. [But when] I asked about the 75 oxygen patients I have out here and the 100 hospital beds I have, of course they don't want to talk about that.

“To sell it [that way] would almost feel like a fire sale, and I didn't want to do that. So we made a family decision to keep it in the family.”

About that, he's inflexible.

****************************

A Full Service Advantage

Although he considers Jim's Pharmacy and Home Health a small, independent company, Jim Cammack has had some success competing for managed-care contracts. Not only are insurance companies attracted to his company's one-stop shopping, he says, but they are willing to negotiate better terms because they are interested in contracting with both the pharmacy and home medical equipment sides of his business.

"We had one contract that came to our attention in January," Cammack recalls. "The insurance company came in to visit us, saw our facility, saw what we were doing on the HME side as well as the busy pharmacy. The pharmacy contract, however, wasn't what we wanted, and we told them we couldn't sign a contract until they get the pharmacy reimbursement worked out. So to a certain degree, we have a little power that way."

Cammack realizes that not all HME dealers can offer such one-stop shopping alternatives by opening up a pharmacy. He recommends instead forming relationships with pharmacies in the area.

"I wouldn't necessarily suggest that an HME dealer go out and put in a pharmacy and expect to pay a pharmacist $100,000 a year, put in $250,000 worth of inventory and be able to run a pharmacy with all the competition that there is in pharmacy for contracts," says Cammack. "But at the same time, an HME dealer can form an alliance with a pharmacy and let the pharmacies know that they've got the medical equipment that they have. That's something a regular HME dealer could do, market their services to other pharmacies because sometimes people come in the pharmacies and ask for the strangest things that a HME dealer would just maybe know automatically."