Homelink celebrates 10 years of steady growth

Tuesday, September 30, 2003

WATERLOO, Iowa - Ten years ago, Dave Kazynski had an idea that managed care organizations might favor “one-stop shopping” for HME and services and that small independent equipment providers might appreciate the added business they had not been able to tap directly. By connecting the buyer to the right seller, he figured, everyone would benefit - especially the patient.
So Homelink was born and it grew - and continues to grow - even as it walks away from contracts and other provider networks unravel. Besides Gentiva CareCentrix and Northwood, HomeLink is the only provider network still in business. Others - The MED Group’s managed care network, EquipNet and Legend Healthcare among them - have disbanded, citing the impossibility of turning even a small profit.

It’s Homelink’s willingness to turn down contracts and its employees’ unstinting dedication to customer service that have helped it succeed, said Dave Kazynski, president of VGM Homecare. Homelink refused contracts that could not be fulfilled for the price while other networks figured “any volume is good at any cost,” Kazynski said.

“We turned down six out of every seven contracts, and we were still growing,” Kazynski said. In 2000, Homelink canceled three of its largest contracts because the insurance companies would not budge on price.

Eventually Homelink negotiated contracts that were between 17 percent and 62 percent higher than what the managed care company had agreed to pay other provider networks. Some of the large contracts today are for $10 million to $15 million.

Homelink, with 200 employees at its headquarters and call center here, continues to grow. The 23,000 referrals it counted in 1999-2000 grew 15 percent the next year, and jumped 31 percent in 2001-2002. So far this year, the growth rate is at 10 percent.

Executives of defunct provider networks have complained that the margins in the HME referral business are just too small to survive, and the amount of business to be doled out among small independent dealers is miniscule.

Kazynski acknowledges that margins are small, but VGM has always seen Homelink as a service for its members, rather than a big money-maker, he said. HomeLink won’t lose money on a contract, but it can afford to operate at break-even or at a small profit.

Barbara Bishov, owner of Quality Healthcare in Arlington Heights, Ill., a suburb of Chicago, is happy to have Homelink referrals that make up 2 to 5 percent of her HME. As a company with 20 employees and one location, she knows she couldn’t negotiate with the managed care organizations herself. Plus, Bishov appreciates the attention Homelink gives the patient.

“They do their job,” she said. “They check. They make sure when they refer a patient, that patient is treated right.”