Back in the day — the day being 1950 — when Merle Marx and his wife Jean opened Medical Service Company in Cleveland, business was all about doing the right thing.
Even as the Marxes massaged their company into a physician supply operation and expanded via two moves, they kept that focus.
It's a legacy they handed down to their son CEO Joel D. Marx, who with John Geller, his business partner of 25 years, has built Medical Service Company into a flourishing respiratory and durable medical equipment company with five locations (Cleveland, Youngstown, Canton, Mansfield and Marietta, Ohio). The company serves 28 Ohio counties and part of northern West Virginia.
The industry has changed drastically since those early days. For starters, there's Medicare and Medicaid, not to mention managed care, accreditation, surety bonds and competitive bidding — and perhaps no one involved in HME today is more aware of how much things have changed than Marx.
“I grew up in the business,” he says, adding that he remembers fondly the first time his dad let him punch the cash register keys and answer the telephone. “My parents started the business and my dad's been gone many years, but my mom stayed active until she passed away five years ago.”
In that time, Marx says, the industry has gone from getting its revenue solely from patients to getting its revenue almost exclusively from other payer sources. Still, he has never swerved from his parents' basic philosophy: “Doing the right thing for the right reason,” he says.
“The right thing is that if you take care of patients, the financial stuff will follow. But it's done in that order … You don't do it for the finances, you do it for patient care.”
The Trickle-Down Theory
Marx has a theory about quality patient care. It happens when a company's employees are paid a fair wage, have fair benefits, believe they are making a difference and are appreciated.
At Medical Service Company, there are 130 employees, and Marx knows all their names and the names of their family members. He knows who is getting married, who has had a baby, who is celebrating an anniversary. He personally sends birthday and anniversary cards.
“I regret when I don't remember a guy's girlfriend's name,” he says. “It bothers me because that isn't how it used to be.”
To be sure, it was a lot easier when the company was smaller. But even though the company employee numbers have swelled through acquisitions — three in the last few years, a pattern that looks to continue — Marx believes it is important to keep that connection. Before the company's annual meeting, he gets a “cheat sheet” of everyone's names and the names of their spouses. His wife quizzes him on those names.
The result of that conscientious effort is a family-style camaraderie that pervades the business' daily operations. New employees are greeted on their first day with a big breakfast for the entire staff. A team-style atmosphere prevails.
“No one works for me; everyone works with me,” Marx says. “There's a family feeling here.”
The company's mission statement has to do with service quality, integrity and compassion, Marx says. “The compassion piece is a big piece for us. Hopefully, [the staff] has that feeling of caring and compassion, and they can take it all the way through to the patient.”
It appears that is happening.
“Our people genuinely care for their patients,” Marx says. The company concentrates on respiratory care, which is about 70 percent of its business. But, Marx notes, “We do a lot of hospice work — which is 24/7 work — delivering equipment or medications at 11 at night and by the next morning, the patient isn't going to need it anymore.
“Our people are making a difference. They love to be a part of that. I call it noble, but it is almost a privilege to help a patient live a better life or die more comfortably.”
The employees are keen on reaching out to the community as well.
“We've always done different events, but they were organized on an infrequent basis,” Marx says. “About five years ago, we decided to allow staff to make it happen.”
The company gave the staff a small budget and a name was selected: Team MSC for “Making Significant Contributions.”
Now, at least one activity or event is scheduled every month. It can be something in-house, such as a Cleveland Indians opening day celebration, Halloween costume party or a Hawaiian shirt day or something to benefit a cause or the community.
Team MSC has made valentines to deliver to a senior center, organized a United Way campaign, held blood drives for the American Red Cross, participated in the American Lung Association Asthma Walk and donated more than three-and-a-half tons of food for local food banks.
Referring to the variety of the year's events, which are largely funded through selling the company's old computers for as little as $25 apiece, Marx says, “I don't think this whole thing costs us $1,000.”
The little it costs pays off big, though, by enhancing the family atmosphere, building employee satisfaction and heightening compassion for others.
“This is our culture,” Marx says. “We live here, work here and have a responsibility to make it a better place for all of us.”
One of the company's biggest events is the annual Jean S. Marx Educational Forum. Named in honor of Marx's late mom, the forum is a thank-you to the company's referral sources. Respiratory therapists, nurses, social workers and dieticians are invited to attend free of charge (they just need to donate a nonperishable food item).
The day-long forum, which allows attendees the opportunity to earn up to six continuing education units, features educational sessions and a mini-show of some of the latest home medical equipment.
In 2008, the Cleveland forum included 24 classes presented by 19 professional speakers and had a record attendance of 375. Event sponsors included Invacare, Salter Labs, Blue Chip Medical, Philips Respironics, SeQual, Nestle USA, Visiting Nurse Association of Cleveland and Hospice of the Western Reserve.
MSC has recently expanded the educational program to half-day sessions at its branch locations, where attendees can earn up to three CEUs.
Embracing Change
In addition to his trickle-down theory — happy employees make happy patients and referral sources — Marx is a champion of change. In one example, the company is entirely paperless — and has been for the last seven years.
“We have to learn to do things differently than the way we did and empower our staff so they are not afraid to change,” he says. “The worst thing that can happen if change doesn't work is that you go back to the way you did it before. If you never change, you will never find out if you could have done it better [so] I ask folks what we can be doing differently to get to the next level …
“You have to look at the future,” he continues. “The industry today is not the financial market that it was five years ago, and in five years, it's not going to be as good as it is today financially.
“We have to find more efficient ways to provide these services. We undoubtedly will look different in five years than we do now. I don't know how, but if we don't, we won't be successful.”
He acknowledges that the way his company is run is likely not the norm. Most folks are of the “if it isn't broken, don't fix it” mentality. But Marx is driven to find ways to better serve patients.
“The culture of the organization is unusual,” he says. “Making a difference is important. We try to do what we can the right way again and again and again. As a result, we have grown substantially over the years.”
Marx wants that to continue, so he is on the alert for other companies to acquire. That strategy is driven by the nature of the industry.
“Reimbursement is obviously a challenge. Competitive bidding is an industry nightmare. And what we are trying to do to overcome these challenges is to grow our top line so we can hire smart people, improve the quality of our staff,” Marx says. “The bigger you are, the more specialists you can afford.
“I do want to hire the people who have normally gone to the Cleveland Clinic Foundation,” he says, referring to one of the nation's top hospitals, which happens to be in his neighborhood. “To do that, we have to grow, and we are doing that through acquisitions.”
In the end, Marx wants to take care of patients in the best way he can — over and over and over again.
“I don't believe that there are a lot of things that differentiate organizations in what they talk about,” he says. “Everything is in the execution. We show caring and compassion, we empower our staff, we have wonderful training programs and management programs.
“But what makes any organization successful is executing again and again and again at a high level — and doing the right things for the right reasons.”
So, Marx continually asks the staff how Medical Service Company can change its operations. “I want people to change the way they do [something]. If it's working fine, figure out a way to change it. If it doesn't work, we'll go back. If it does, you have improved it. And better doesn't necessarily mean financially, but maybe it's a higher level of service.”
Take Four: Tips for Success
Joel D. Marx, co-owner of Medical Service Company in Cleveland, believes the key to running a successful business lies in four steps — and a lot of questions.
“We have our performance management tool, which is four steps: plan, train, measure and evaluate,” he says. “Those are the steps we follow as an organization. If you don't have a plan, if you don't train, if you don't measure and if you don't evaluate, you don't have anything.”
The company applies that tool constantly, Marx says, as it seeks to do what it does better and better.
Asking questions leads to the four steps, he says. So he routinely queries his staff: How can we improve runover in inventory? How can we build our support surfaces business?
The question leads to a plan, the plan leads to training, the training to measurement and then evaluation. By using those tools, Marx says, organizations can swiftly tell what is working and what is not.
“We planned for three years to grow our support surfaces business,” he explains as an example. “We measured it every month. We evaluated it every month. We found it wasn't successful. We hadn't done the right training. So we retrained our staff. And now we're getting good at it.”
