Dealers Discuss: Robert Steedley, President, Barnes Healthcare Services and Optioncare

Who is a typical customer?
We have 16 locations in south Georgia and north Florida. We are a full-line DME company and we have HME respiratory and infusion. Our customers, like most others on the respiratory side, are generally middle-aged adults and older that have some early or mid-late stage respiratory disease. We also have pediatric patients including some home on ventilators.

How many folks do you service in a given month?
We assist 8 to 10,000 patients a month, and that includes oxygen patients, sleep apnea patients, and respiratory drug patients.

How is business for you right now?
Our sales activity up a bit. We remain generally optimistic about that. Our top line revenue numbers are continuing to grow modestly in spite of reimbursement cuts, so we’re holding those numbers, in spite of lower payments from the payors. And we do that by continuing to grow our market share in the markets we are already in.

What are some of the things you do to keep your market share growing?
There are a couple of things. We have to have some strategic partners including some of the manufacturers, such us Sunrise and ResMed,  who have special programs in place. We have another partner, The MED Group, and that strategic relationship is probably one of the most important. Not only do they derive value in cost savings, but they also have some educational programs. For example, we use a program called “When in Business,” which is a benchmarking system so we have some real data on how we are doing in certain areas, and if we are not doing well somewhere, we can call other people in the network to find out some better practices.

Manufacturers have reps in the field that do in-services with our staff, including at some of the facilities and referral sources that we share commonly, so that partnership is of vital importance.

How will the oxygen rental cap and cuts to reimbursement impact your business?
The successful companies will do two things: this is going to become an industry driven by volume and by market share. You’re not going to be able to serve 100 patients or 200 patients and survive. It will require large volumes of patients because the volumes are going to be tighter. That’s one of the ideas that providers need to get used to. It’s no longer about changing price. That price is coming down.

That leads you to the second thing: providers have to be able to have a conscious performance improvement plan in place, and specifically look at their productivity. There’s a ton of ways to measure that; for example, they can count the revenue per FTE and look at the overall picture and find process improvements. They need to get their team involved to find a way to have fewer keystrokes to complete their tasks. Some of that will be accomplished through software and automation, such as telemedicine. Predominantly, we are able to improve productivity and it becomes a part of the management discussion every Monday. There are a lot of things we may not know but we know what the productivity number is.

How do you ensure the patient is still getting the service you hope they would receive?
The owner of the company is a pharmacist. I myself am a registered nurse. We have clinicians that are in some of the highest leadership positions in the company. Even though we look at the top and bottom line number we all have that inherent nature that brought us into health care to start with; we have a genuine concern for the customers’ well-being and their care, and the improvement in their health. The conversations we have generally talk about some of the chart audits we’ve done, reviewing orders and we look at some of our patient satisfaction surveys to see how we are doing. We’ve got clinicians at the top and that’s the way we do it.

Are you worried by the prospect of competitive bidding?
I’m truly not worried about competitive bidding in its original nature. What concerns me is the lack of business-mindedness by some of our competitors and that through competitive bidding they will go out and try to cut everybody out of the market. Their strategy long term will be to get everybody out and year-to-year raise the bar. We can compete because we continue to improve our processes. We don’t have any interest in trying to get into a “who can be the absolute lowest bidder” game; we would walk away from that. I think there’s enough pressure in the industry right now, enough people understand we cannot continue to sell ourselves out, so that I am trusting others, including nationals, will not participate in that game. We’ll come to something that is fair for the providers and that also offers a competent and complete service for the customer.

Part of the reason we remain profitable is that we are working smarter, not harder, growing market share, and trying to get the right staff.

What does the future look like for RTs working in the DME industry?
I think the industry keeps looking for less expensive people, [whereas] we continue to add RTs to our staff. We have to have the clinical leadership to compete. We want to be known as a company with the right staff and have the staff to do that. Whether we’re talking to a physician or a patient, we don’t want to have an RT 300 miles away on the phone, we want someone in the local office calling.

The functions of the RT can be less equipment oriented. They don’t have to be setting up the oxygen concentrator. What you’re looking for is the clinical leadership, for example, how do we get outcomes, looking at charts, especially for problem patients, talking to them when they use the tanks, are they short of breath in the day, at night? They provide a better service and from there, when we have a more appropriate product then my more significant cost will come down and still allow me to keep those clinical people on board.

How do you encourage more people to become RTs in these challenging times?
It’s always going to be challenging — it’s not for the faint of heart. If you don’t like change then it’s the wrong place to be, but there are a lot of people in our company that have a real energy about them and really care about their neighbor and want people to be well, and if you can find those people who aren’t scared to fight the fight, you’ll find better ways to provide the service. Those people are drawn in by the aging population and the growing diagnosis. The real question is, as an industry, are we adept enough at recognizing those people and bringing them in, or are we so scared about what tomorrow holds that we walk away from potential great employees?

How do you find the right people?
We try to interview people every week. Some are drivers, clinicians, some have never been in the industry. We’re always looking, and we are also trying to run across someone who has that burning fire and wants to jump in, the kind that will get in the middle and help you fight the battle. We have to prepare for tomorrow but we can’t be scared of it. Whatever is going to come tomorrow is going to come. You just keep moving. We can look forward and make preparations. The only organizations who should be worried right now are the ones who are not preparing.

Contact info: Barnes Healthcare Services and Optioncare, 200 Patterson Street, Valdosta, GA 31601, (800) 422-5059.

This article originally appeared in the Respiratory Management Nov/Dec 2006 issue of HME Business.

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