The Spiro Merger: The Best of Both Worlds

A Q&A with the three HME business leaders that formed the recently announced Spiro brand to get a deeper look at what motivated the merger, their branding, technology approach and strategy for serving their New England markets.

Last week, three HME providers, America's HealthCare at Home (Baltimore), Cape Medical Supply (Sandwich, Mass.) and Health Complex Medical (Waterbury, Conn.), merged to form Spiro Health, a larger, umbrella care organization serving the New England region.

Spiro Health will care for clients in seven states, Connecticut, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island and Virginia, as well as the District of Columbia. Also, the companies will leverage best practices as well as technology to provide consistent, seamless care and services to their clients.

That said, each of the three provider brands will continue to serve their respective markets under their original business names. Consider it a "having your cake and eating it too" approach to a merger.

The leader of each of the three providers met with HME Business to discuss motivated the merger, their branding, technology approach, and strategy for serving their New England markets. They are:

  • Gary Sheehan, president and CEO of Cape Medical Supply and newly appointed CEO of Spiro Health.
  • Mark Kassir, president and CEO of America's HealthCare at Home and President (Mid-Atlantic) of Spiro Health.
  • Jack Hogan, president and CEO of Health Complex Medical and newly appointed President (New England) of Spiro Health.

HME Business: Diving in, when did the idea to create Spiro begin, and why did you decide to do it?

Sheehan: Jack and I had been talking about coming together for a while, and we met Mark a couple of years ago and continued that dialogue. We really wanted to come together and work with a smart group of people across a larger footprint to build something unique and leverage the strength and commitment of our combined teams.

So, it's been a long time coming, but we're really excited to be together in the first couple of weeks here, although certainly, it's a little bit unusual [with COVID-19], but circumstances have been very encouraging.

HMEB: You mentioned it's been a long time coming. When did you guys first start, start talking about this?

Sheehan: Jack and I have been talking about this for five-plus years in an informal but detailed way. And then I think we started talking to Mark probably a year and a half ago, two years ago.

Kassir: That's right.

Sheehan: Good partnerships take time to create. We didn't want to rush into anything. Through the dialogue along the way, we got to know each other better; know the company cultures better; know our priorities better; and I think that was a really good point of diligence for us.

HMEB: Is it a partnership or a merger?

Sheehan: It's a merger. Each company is under Spiro now, but these businesses will continue to operate substantially the same way as they have on a local level — the same name, same branding, same leadership — but will benefit from some joint purchasing at the holding company level, as well as a group of people who are working to standardize business practices and operations.

Although each will still have unique elements of what they do and how they do it, we will borrow aggressively from one another in terms of best practices and things like that.

HMEB: You mentioned the branding. You plan to continue having the individual provider brands resonate with local markets, but you have this umbrella Spiro brand. Will the Spiro brand kind of slowly be introduced to local referral partners and payers? How does this play out from a branding perspective?

Sheehan: We won't do that. We did need some branding for the market, for people to understand, "What is this thing?" And I do think there will be dialogues that we can have with the payer community and referral community that's spread across a broader region than any one of these businesses operates in. We needed something at a merged level for people to digest and understand. Mark was the one that came up with the name, so Mark I'll hand to you.

Kassir: The idea is that we don't want to McDonaldize it as Gary said, but we do want best practices. There are things I do, there are things that Gary does, there are things that Jack does, and we've kind of been in our own little islands, and we want to put those ideas out there. But as Gary said, we're going to be billing under our tax ID numbers, and we're keeping our own NPI numbers, so we want the best of both worlds.

Right now, I take care of the Maryland, D.C., and Virginia markets, and we do different things in each one of those markets. We want to be able to be specific to those markets.

Hogan: If I could talk a little bit about the name Spiro and to Gary's point, I'll just have a turn back the clock a little bit. Health Complex Medical began in 1984, so we're coming up on our 36th anniversary in May. Mark began in the industry in 1985, and Gary's parents started their business in 1977. These are three companies that have a lot of longevity, have spent a lot of time improving processes over the years with many, many challenges in the HME industry and as Gary said, he and I just started asking the question, "What would it look like if our two companies came together?"

At first, it was just one of those casual conversations, but then as the industry changed and consolidation started happening, questions started rebounding about what's the industry going to look like moving forward, and we continue to have well run businesses. So that was the impetus: can we continue to run our businesses individually but gain some scale? Are there other good operators out there that we may want to link arms with — and that's how we came across Mark.

HMEB: A statement from Spiro said that you would use technology to create a seamless patient experience. Could you describe that a little?

Sheehan: We're in the process right now of standardizing across the three into one database, and that's the first step to be able to leverage and deploy solutions across all three businesses to build a better patient experience. We also have some things at each company that are more proprietary in nature.

So I think the first step is looking at our best practices within our EMR systems and adopting those across the three, because that drives everything that you do. There's nothing exotic there; we're a partner of Brightree's, and I think we each lean on that system in different ways.

But there are also some solutions that we have that are little more bit more proprietary in nature that we're excited to all be using. We will ultimately get there, but it's about having visibility into the business at the volume that we're operating at, and you need that visibility to control the patient experience and ensure that things don't fall through the cracks.

I think a lot of times, when we hear complaints about larger businesses, it's that they don't care or that things fall through the cracks. I don't think anyone doesn't care; I think things just get missed. We've got some pretty unique opportunities to use technology to build a better patient experience; a better referral partner experience; and control that at a much higher volume than any of us have historically operated at.

Hogan: I don't think there's any real secret sauce to anything on the technology front. As Gary said we've got a couple of proprietary things that we're going to embed in all three companies, but when it comes to budget planning — and I can only speak for Health Complex Medical, but I know how these other two guys tick — technology is really high on the list; sometimes first on the list.

In addition to the technology piece, you have to have good senior management, and we're really bullish on the senior management team that we've pulled together between these three entities. I think you could have the greatest technology in the world, but if you don't have people at the top that can execute, then [the technology piece] is not really worth much of anything, as far as I'm concerned.

And like I said, I'm super bullish on this team. They're filled with experience; they're filled with a lot of knowledge; and right now, more than ever, they're filled with a lot of passion. There's a lot of people inside our three companies that are super excited about this next chapter that Spiro Health is about to help all three companies embark upon.

Kassir: We're each at different levels in different parts of the business when it comes to technology, and we want to make it streamlined, but in the same breath, we don't want it to be sterile. We still want patients and referrals to think of us as the "Ma and Pa" that we were, but also be as efficient as possible and have the least amount of errors that go with people writing down serial numbers and doing things manually. We really want the best of both worlds.

HMEB: So I'm curious, you made this announcement at the height of a pandemic, but apparently COVID-19 didn't put a hitch in your plans at all. Why did you decide to announce Spiro when everything's gone crazy? It seems to me that you don't do that unless you feel confident.

Kassir: Obviously, we didn't know COVID-19 was going to happen, and we were actually trying to get this done earlier. But "life happens," and things just happened to line up that way, but we weren't going to let that stop us. We wanted to do this.

It has slowed down some of the integration, don't get me wrong. For example, in the middle of the integration, we had to get staff working from home, and we still had to run our businesses too, but we just didn't want to put the brakes on.

Sheehan: That's just the way it happened. We've been working on it legally since last July, and we never saw this coming, but I think it speaks to the level of excitement, and I'll use Jack's word, bullishness, and commitment that the three leaders and organizations had, that we were able to push it across the finish line in the midst of all that's happening.

I could not be more proud, not just of the work that these organizations are doing — particularly Jack's and Mark's being in home oxygen and home ventilation — but also the HME community at large. I think there's a generational opportunity in front of us to demonstrate the value and capacity of our industry, and everything that I'm seeing across the United States indicates to me that it's happening, and I can't thank and support those efforts that these people have made. I hope that we have some sustained change in the eyes of Medicare and the payer community as to what we do, how we do it, and our value to the healthcare continuum at large.

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