Cardiosom: Fuel oxygen biz with physician trust
Tim Miller built a career as the physician's go-to guy, collaborating with them in businesses ranging from mobile cardiac catheterization labs to imaging centers. So when a group of cardiologists approached him in 2004 about getting into the sleep lab business, Miller put his healthcare management expertise to work in a new venture, MD Sleep, under parent company Dormir, based in Carmel, Ind.
But that's not the end of Miller's story. Before long, his physician contacts had another request--give us a new option for oxygen and sleep therapy, prompting the birth of Cardiosom.
"(Cardiosom) was set up because physicians complained that nobody really was taking care of their patients...a lot of them were the drop-off delivery (model)," said Miller. "We started in January 2005 and grew pretty rapidly."
So rapidly that Cardiosom ranked 25th in 2009 for Medicare reimbursement of oxygen concentrators nationwide.
To date, Dormir has a presence in 16 states, with 40 Cardiosom locations and 40 MD Sleep labs.
"We've gained the trust of the physician by taking care of their more difficult (sleep) patients," said Miller.
Timing worked in Cardiosom's bottom-line favor--Miller skipped costly capital investments in liquid oxygen in favor of portable oxygen concentrators, subcontracting services for liquid patients when necessary.
Continued rapid growth is Miller's strategy for survival--Dormir got an infusion of $12 million in venture capital in March.
The company also plans to acquire companies that were offered competitive bidding contracts. In four competitive bidding areas, Miller opened locations and staffed up in preparation for the bid, only to shut down when Cardiosom wasn't offered contracts.
"I think there will be very few players left in the market," predicted Miller. "It's becoming harder and harder for smaller operations to exist."
But with a focus on continuing to earn the trust of physicians, Miller believes Cardiosom is here to stay.
"We're selling the whole continuum of care with physicians," he said.