Profits beyond their wildest dreams
LYNBROOK, N.Y. - Early last year Ed Walsh and Seth Lane bet that if they started a company that provided only adult and pediatric respiratory services, referral sources would welcome them with open arms. They never thought that those open arms would close into an affectionate bear hug.
“When we started, our original goal was to break $500,000 for the year,” said Walsh, who like Lane has 25 years in the HME industry, but never as an owner. “Breaking even would be fine. We never thought it would be like this.”
“Like this” means their company, RRT Group, tallied close to $2 million in revenue for its first year and projects $2.5 million to $3 million for 2003. In October, the company opened a closed-door respiratory pharmacy at the request of pulmonolgists who wanted the company to supply meds as well as the necessary medical equipment, Walsh said.
“We only do the respiratory piece and because of that we’ve gotten a tremendous response from doctors and the clinical people in the hospitals,” Walsh said. “They are looking for someone who is focused on doing high-tech work and not someone who is sidetracked doing a bed or wheelchair.”
The company’s services include: oxygen, ventilators, nebulizers, overnight sleep studies in the home, oximetry, apnea monitoring, CPAP and bilevel CPAP. RRT employs a part-time driver who fills liquid cylinders and drops off tanks, but licensed respiratory therapists do everything else.
RRT Group is certainly not the only company to focus solely on home respiratory therapy, but such companies are increasingly rare as the industry consolidates.
The RRT Group provides durable medical equipment - a hospital bed, for example - only if a respiratory patient requires it. By avoiding DME, the company has streamlined its billing to the point where its DSO is an enviable 58 days, compared to the industry average of 85. HME