‘We’ve always grown’

Tuesday, August 31, 2004

QUEENS, N.Y. - You might say that Medstar Surgical is serious about maintaining its 20% to 25% annual growth rate. Over the past six months, the company has hired three sales people, three customer service reps, a director of sales and marketing and a financial controller.

“Medstar has always grown,” said owner Zeb Pirzada. “I’m 30, we’re all young guys and women and we want to be aggressive.”

Medstar covers the New York metropolitan area. By boosting its sales team, the company now has a full-time rep on Long Island and in Westchester and Rockland Counties north of the city. The controller, hired in July, allows Pirzada to better monitor his entire business.

“People told me I should have gotten a controller awhile back, but I really wanted to do everything, control the money,” he said. “But at a certain level it was too much, and I had to let go.”

In 2003, Medstar generated $10 million in revenue, and this year is on target to reach $12 million, Pirzada said.

While Medstar provides custom rehab and a full range of DME, “we’re really looking to build our oxygen business,” said Marketing and Sales Manager Mitch Yoel, a physical therapist who specializes in pulmonary rehab.

Yoel previously worked at Air Products Healthcare in Queens as a sales rep. His contacts with pulmonologists and especially area sleep labs has helped grow Medstar’s CPAP business from about 15 referrals a month in January to 120 in June and July.

“It’s a relationship business and a market that Zeb really never targeted,” Yoel said. “I’m in the sleep labs once a week to see how things are going and making sure they are being taken care of.

“I know reimbursement guidelines and equipment back and forth. When they have a patient who travels a lot, I know what CPAP they are going to need. If they have sleep fellows rotating through sleep labs, I’ll do an in-service on whatever they need.”

Medstar generates a third of its business from Medicare, a third from Medicaid and the rest from private insurers. Rehab represents 20% of its revenue, respiratory 30% and DME/supplies 50%.

With Medicare reimbursement cuts scheduled for next year and beyond, building the company’s sleep business makes sense. Patients with sleep disordered breathing are typically middle-aged men and not Medicare beneficiaries, Pirzada said.

But while Medstar may be working aggressively to build its respiratory business, its reputation as a full-service provider won’t be compromised.

“We have a reputation for that in this area and we believe that we should provide most of the products our industry has to offer even if the margins are low,” Pirzada said. “Being a full line service is a must for the New York metropolitan area, and we want to be around for a very long time.”