Taking Stock of the Market

In a climate that appears to be hostile to the small home medical equipment provider, there's survival in numbers.

At least, that's what three South Carolina providers are banking on. The three businesses — Adaptive Medical in Spartanburg, ApneaRx in Clemson and Mobile Healthcare in Greenville — were rolled up into the newly formed Southern Home Medical, a publicly held company that, at press time, was set to debut this month. Nearly a dozen more companies are considering joining Southern Home Medical, according to Greg Tucker, owner of Adaptive Medical and president and CEO of the new company.

The hope is that the small providers will have more muscle together than apart. That could be a real boon in terms of services, purchasing power and generating operating capital, not to mention competitive bidding.

“When we got into the HME business in 1994, we knew it would be tough and competitive for a single-location operator,” says Tucker. “But consistently, we've watched as operators like us have always found a way to adjust. My hope is that locally owned stores across the U.S. would continue to do so. In our case, we just feel the odds of success will increase by operating as a public entity.

“It's a way of expanding our core product line. We want to draw on each other's market strengths.”

Seeking Survival

Southern Home Medical grew out of what Tucker calls an “awakening” in early 2005. “Everybody has that moment where they wake up and take notice of Medicare cuts, accreditation, competitive bidding and all of the other issues we have to face, and our awakening was a year-and-a-half ago,” says Tucker.

Concerned that HME providers this time were going to take multiple hits, he began talking to other owners about what they could do to survive.

“The only way that really made sense at the time was for us to be looking at a way to become a publicly traded company,” he says. “This step will allow us to raise operating capital, and it also allows us the ability to merge with or acquire single-location operators looking for a more effective way to grow their business. We're looking for the operators that are passionate about patient care, have a good reputation in their community and have a track record of success in growing a business on their own.”