At A&R Medical, success is transparent

Monday, January 31, 2005

ALBUQUERQUE, N.M. - As A&R Medical Supply restructured itself in Chapter 11 bankruptcy two and a half years ago, management made a couple of key decisions that lead to its current success. The most interesting, if not the most important, was to hold a staff meeting every Monday morning.

At the meetings, employees learn to the very nickel how much money the company spent the previous week and how much it took in. Each department reports on its previous week’s performance.

“For example, our drivers tell us how many deliveries they made and how many they didn’t make,” said General Manager Jesus Martinez. “Marketing reps tell us what referral sites they hit, and what they had to say about A&R and what kind of business they are selling us.”

Providing that kind of transparency for employees “is the best thing we ever did,” Martinez added. “It’s a holistic approach, and lets your employees know that what they do really means something. It gives them a sense of ownership. I want them to know if the company is healthy. Likewise, if the company is not meeting its goals, they need to have a sense of urgency to take care of the tasks at hand in their department.”

A&R filed Chapter 11 bankruptcy in 2001. It emerged with a new business model focused on building a successful home respiratory company. Prior to 2001, the company focused on the less lucrative rehab market.

Today, A&R serves 500+ respiratory patients, generates $3.6 million in revenue and collects 85% of its gross billing. About 60% of its business comes from home respiratory therapy, and Medicare accounts for 60% of that revenue.

When A&R entered bankruptcy, the company generated about $2 million in revenue mostly from rehab (it serviced only about 10 oxygen patients) and collected only 65% of its gross billing.