A blast from the past

Monday, January 31, 2005

The $100-million company combines HME, nursing, staffing and meds

SOUTHFIELD, Mich. - Like a movie director who believes a now obscure star deserves another shot, Arcadia Resources is bringing back a business strategy that many people left for dead: the one-stop-shop.

With an executive team that includes Larry Kuhnert, a former Rotech M&A specialist, the roughly $100 million company formed last spring. Since then, it has acquired several small durable medical equipment/respiratory companies to go with its existing HME holdings, a large health care staffing business, a mail-order pharmacy (respiratory meds and diabetic supplies), and home health nursing.

Kuhnert did not return phone calls, but in a November release, CEO John Elliot stated: We expect “these industry sectors ... to continue double-digit growth regardless of the economic climate. Arcadia Resources expects to leverage that growth by positioning itself as a one-stop source of caregivers, medicine and equipment for in-home recovery, as well as the preferred source of hassle-free temporary staffing for medical facilities and other businesses.”

While the jury is still out on Arcadia, its strategy has some industry watchers scratching their heads. The one-stop-shop was all the buzz in the 1990s. Companies figured that if they combined a variety of home health services under one roof, referral sources would jump at the convenience. Rather than call three different providers to supply HME, nursing and medications, a discharge planner, for example, could do it all with a single call to the one-stop-shop.

“In theory, a one-stop-shop makes sense, but a lot of people found they couldn’t do it all well,” said an industry source. “They either did none of it well or only did one or two segments well and the rest was a struggle. They also either didn’t perform well from a service standpoint or didn’t perform well financially.”

For several years now a reverse trend has taken place: one-stop-shops, especially hospitals, have pared back to their core business by selling off HME and other ancillary businesses.

That doesn’t mean, however, that the pendulum won’t swing back the other way.

“It’s a developing market place,” said another source. “In light of competitive bidding and cutbacks and threats of more cut backs, people are thinking outside the box. What may have seemed like an old hat philosophy years ago, may make sense now.”