Closings abound

Friday, March 20, 2015

Since founding Medi-Healthcare in 1985, CEO Robert Slama has seen providers come and go, but recently, he says there’s a lot more going than coming.

“We’ve seen about 13 companies close down in our surrounding area over the last 24 months or so,” said Slama, who has a location in Lakeland, Fla. 

That includes the recent closing of a competitor that logged more than 20 years in business, he said.

Still, Slama, who accepted Round 2 contracts for enteral, oxygen and negative pressure wound therapy supplies, isn’t convinced that being a contract supplier has given him a competitive edge. 

“None of it is business friendly,” he said. “There’s very little profit—if any—and the paperwork is off the charts.”

Other providers, like James Chung, believe winning the bid is crucial to staying in business—especially Medicare-driven businesses.  

“When 80% of your business is Medicare and you don’t win the bid, you’re in trouble,” he said. “You’re closing your doors.”

Chung, who owns JC Home Medical in Jacksonville, Fla., has seen six of his competitors purchased by larger regional players over the last few years.

“They couldn’t survive so they gave their businesses away for pennies on the dollar,” said Chung, who accepted a Round 2 contract.