Respiratory provider lands on elite list
When it comes to home medical equipment providers, Extrakare is in a class by itself.
The five-year-old company, which has grown 834.6% since 2004, recently turned up on Inc. magazine's 2009 list of America's 500 fastest-growing private businesses. Extrakare placed 271st on the list. That made the company the 25th fastest-growing private healthcare business in America and the 8th fastest-growing private business in Atlanta. While some specialty pharmacy and home nursing companies appeared on the list, Extrakare appeared to be the only HME.
"It's a little surprising (that we made it on the list) relative to what is happening in the industry overall," said President Scott Lloyd. "If you sit back and look at it, there are all these reimbursement pressures, but there's also room for companies to be growing in their individual markets."
Since opening its doors for business in January 2005, Extrakare has grown its annual revenue from $493,371 to $4.6 million in 2008, according to Inc. magazine.
No secret strategy or magic bullet fueled the company's success, said Lloyd.
First, he said, it's easier for a start-up to grow at that eye-popping rate than for a mature or large company. That aside, Extrakare's business model (product mix: 50% oxygen, 40% sleep, 10% DME; payer mix: 50% Medicare) includes a number of strategies intended to maximize revenue and control operating costs. For example, Lloyd said:
-- The company takes a "heavy hand" in holding down delivery expenses. It has embraced non-delivery oxygen technology. Its delivery fleet consists of Dodge Sprinters (21 miles per gallon) and its clinicians drive Toyota Matrixes (31 miles per gallon.) A GPS system helps produce efficient routing.
-- By servicing the greater Atlanta area from a single branch, Extrakare limits fixed costs related to real estate like Internet connections and phone lines. This also makes for more efficient company communications.
-- By operating in a single state, it's easier for Extrakare to collect and pay taxes.
-- The company invests in its sales force every year. "We have expectations for annual productivity increases for our sales force," Lloyd said. "Whoever was here last year, will do more next year. Then we continue to grow the number of people on the sales force."
Going forward, Lloyd, 40, and his partner, Kevin Godwin, 44, don't expect the same kind of phenomenal growth--but they do expect good steady growth.
"Our long-term goal is to grow 15% to 20% a year," Lloyd said. "I think the business outlook in any industry has to start with the base demand, and the demand for our products and services is going to grow. That provides us optimism. We think that at the end of the day, reimbursement will be whatever it is and the efficient and smart operators will find a way to stay in business."