Praxair acquires HME excellence

Tuesday, September 30, 2003

BROOKHAVEN, Pa. - Industrial gas giant Praxair picked up a gem of an independent in July when it acquired Burman’s Home Health Care, one of the largest HMEs in the Philadelphia area and a finalist in this year’s HME Excellence awards.

Praxair acquired Burman’s DME and respiratory business, which together represented about two-thirds of the company’s $5 million in annual revenue. Burman’s respiratory business included about 500 oxygen patients, said President and CEO Steve Burman, who now will focus on building his medical supplies and infusion business.

Terms of the deal were not disclosed.

Acquiring Burman’s was a natural for Praxair, which already has a sizeable HME presence in the Philadelphia area, said a Praxair official. In early 2002, Praxair acquired Alpine Medical, a $25 million HME in Bensalem, Pa.

Burman decided to sell for a number of reasons. Among them: the burdensome regulatory environment; the threat of national competitive bidding; a lack of industry-wide standards that can put accredited companies at a competitive disadvantage; and a dissatisfaction with managed care payers.

“I also developed an interest in infusion, and I like the supplies business,” Burman said.

When it comes to supplies, Burman has embraced a low-margin product area that many providers willingly flee from.

“I think a lot of companies got in trouble [with supplies] because they would just order whatever the referral sources wanted,” Burman said. “We pick out good products - we pick two brands out of 30. If you put all your eggs in one basket, you can get better pricing, and it makes your facility run smoother: You have less inventory and less chance for errors.”

Burman also uses the same clinical approach with supplies that he applied to his respiratory business. When a provider becomes clinically familiar with a product, he can help a referral source pick a product that best suits the patient, he said.