MedCare makes Great buy

The deal is a departure for the provider, which typically partners with healthcare systems that don't have an HME business
Friday, January 25, 2013

GREENSBURG, Pa. – When provider John Sphon looks at the home medical equipment and respiratory therapy market, he sees a model that requires scale.

“A lot of your costs are fixed in the sense of deliveries, billers, trucks—to cover reimbursement cuts, we need to grow the volume to offset that,” said Sphon, CEO of MedCare. “To get the delivery guy out there to deliver one concentrator is not as efficient as delivering five.”

In November, MedCare acquired the DME/RT business of Great Lakes Home Health Care in Erie, Pa. As part of the deal, MedCare picked up about 4,000 new patients and will retain Great Lakes’ 80 employees. Great Lakes, which will operate under the MedCare name, got an ownership share in the business, said Sphon.

“When we look at the matchup of their business and their people, it provides both organizations the opportunity to grow and expand,” he said.

The deal is a bit of a departure for MedCare. Typically, the provider partners with healthcare systems—most recently, in August, with St. Clair Hospital in Pittsburgh—that don’t have their own DME business. Still, part of the attraction with Great Lakes was its good working relationship with its local hospital, said Sphon.

“We, and many of the health systems, think that as they discharge patients they need to have a good working relationship with a DME company,” said Sphon. 

MedCare now has 200 employees and serves 12,500 patients annually.