In today's unsettled conditions, many small providers are finding it increasingly difficult to play with the industry giants, and some have decided to quit the game altogether. But Washington, Iowa-based Community Medical Supply welcomes the big-name competition.
The full-service HME is the only business of its kind in the town of 7,000, but in May, the company opened a second branch 55 miles away in Iowa City — more than eight times Washington's size — where it is going head-to-head with several major players, including Apria and American HomePatient.
“I think there's plenty of room for my style of business,” says Pat Smith, president and owner of Community Medical Supply.
And Smith's style of business — to provide top-notch service to patients — is what has helped the company build a reputation outside of Washington, he says.
“We were getting more and more patients and physicians in the Iowa City market saying, ‘We'd use you if you were in Iowa City,’” he explains. “It's an interesting place. People don't like to drive a long way. They feel strongly about doing business locally.”
Service Standards
This sense of community values is reflected throughout the operation of Community Medical, which Smith purchased in 1997. Today the $1 million business has 11 employees, five of whom are registered nurses or respiratory therapists. And according to Smith, his small-town company is counting on one big factor as the foundation for his business: service.
In a day when many companies are scaling back on house calls, the provider maintains its difference with personal and elevated service. “We visit oxygen patients every week — with therapists, not truck drivers, delivering service to them. It's a different level of patient care,” says Smith, who has spent 25 years in the health care field as a respiratory therapist and hospital administrator.
“Because of changes in reimbursement and the fact that Medicare is continuing to pay less and less, most of the big companies have gone to servicing [oxygen] patients every few months or so,” Smith notes.
Weekly visits for oxygen patients include changing the cannula, tubing and humidifier, checking the saturation, disinfecting the concentrators, cleaning the filters and replacing used portable cylinders.
On initial setup, the therapist takes his time with customers to instruct them on how to use the equipment and make sure they are comfortable, he explains. “It's not a quick setup and ‘bye!’ It's a personal touch.”
That personal touch often includes making a connection with the patient, Smith says. When someone is released from the hospital and they need oxygen or other equipment, they're already not feeling well, Smith explains. “It's that little bit of extra time we spend just to have a conversation with them about how they are feeling and how things are going. Just taking a few minutes makes a big difference.”
Although 70 percent of the company's business is respiratory, Community Medical extends this same service to all customers, he says. For example, if a patient needs a wheelchair and can't make it to the store, a staff member will visit the home to fit them and find the appropriate product.
And another company's dissatisfied patient can quickly turn into one of Smith's new customers, as he has learned. “Someone called me the other day about an oxygen delivery. They said, ‘Could you take this over? We have no idea how [the oxygen tank] works.’ The company delivered it before the patient was discharged [from the hospital], and they never came back,” he explains. “That's the best way to get business.”
Curbing Costs
With the latest round of oxygen cuts and high gas prices draining the budget, it's not easy to offer such extensive service and still be profitable.
One way Smith curbs costs is by careful attention to routing, something especially important in rural Iowa where the miles can add up quickly. “We try to consolidate deliveries so we're not making four trips in the same direction in the same day.”
Speaking with the physician and the customer to find out exactly what products they may need up front also helps to minimize deliveries, he said. For example, a patient who needs a power wheelchair may realize a few days or weeks later that he also needs several additional items. Instead of making multiple trips to the same house, Smith tries to anticipate what a patient may need so everything can be delivered at once.
Another way to prevent unnecessary house calls is to make sure patients are thoroughly familiar with their equipment during the initial setup. “It's taking that extra time to go back [over it again] so [patients are] comfortable with the equipment,” he says. “We want to make sure our customer feels comfortable picking up the phone and calling us if something isn't right or if something doesn't work.”
As for the effect Medicare oxygen cuts will have on his business, Smith is not worried. He's been through worse. “Nobody's happy with it, but we'll have to learn to live with it. The first year [I was in business] was the year they did a 30 percent cut in oxygen, and we survived that,” he explained. “I feel that if I continue to provide service, it keeps patients happy, [and] they'll continue to come out for that service.”
And being an independent provider with the flexibility to run a service-focused business is something that brings Smith pride. “Big companies have stockholders to deal with,” he explains. “I'm a small businessman. The only one I have to impress is me. What I'm looking for is to know I can provide good service to patients. The bottom line will take care of itself that way.”
Spreading the Word
Some of the most effective advertising comes from satisfied customers, and Smith is confident Community Medical Supply's reputation will help his new Iowa City branch grow.
“We have a lot of people who come to us because a friend has talked to them or told them about us,” he says.
In fact, requests from patients and physicians in the Iowa City area was a major reason he decided to open the new branch. “That's how we can see our business growing. Up there no one is doing business the way we are,” he says. “[Operating a branch in Iowa City] gives patients the choice.”
Television is another way Smith brings in customers. “I'm amazed at how much business we get because we do cable TV advertising,” Smith says.
“With the type of business we do, people don't see our ads on TV and say, ‘I need to go to them for a walker or wheelchair.’ What that advertising is designed to do is when that need arises, they'll remember our name. The first thing they think about is, ‘I'll call Community Medical for that.’ That seems to work pretty well.”
