Staying the Course

At a time when most in the home medical equipment industry admit their view of the future for their companies is cloudy, Bruce H. Callahan has a clear vision — and perhaps one secret to success for privately held HME providers.

Callahan is the president of Ultra Care, a 14-year-old company with three branches that is based in Melrose Park, Ill., a suburb of Chicago. With everyone else in the industry, he has suffered deep reimbursement cuts, fickle health maintenance organization fee schedules, hold-ups in payments, increasing governmental red tape and a host of other current and looming threats to the HME business.

Still, within the last two years, Ultra Care's revenue has grown from $10 million a year to more than $30 million this year — and it looks to keep on growing.

What's the secret?

“We've stayed the course of a one-stop shop,” says Callahan, whose company offers respiratory care, durable medical equipment, infusion therapy and supplies. “In some years, we weren't as profitable. But over the years, we've grown and become very profitable.”

Even with severe cuts in respiratory medications and competitive bidding on the horizon, Callahan does not foresee changing his business model.

“I don't anticipate doing anything any different from a business philosophy now than what I have done in the past. We seek to improve our business model every day; we look at ways to be more productive with people, we look at systems to bring more efficiencies to every process we do, from taking an order to delivering it. If you focus on that full time, your business is going to improve every day.”

Bigger Is Better

And in Callahan's mind, bigger is better. In the last two years, Ultra Care has made two acquisitions that have helped the HME stay the course, with plans to continue that pattern.

“We want to get bigger,” he says. “We feel that with today's market, with respiratory cuts and so on, the bigger we get the more economies of scale we will be able to achieve … We are over twice as large as we were two years ago. We have created lots of synergies. Getting bigger is a philosophy that is going to benefit us a few years down the road.”

Growth should put the company in a good spot with competitive bidding set to go nationwide in a few years, Callahan says. “The bigger companies will have the advantage. I will have more resources to offer more services and [better] prices. I may have the chance to win more product lines than someone else.”