Shield acquires Beverly Home Care's med supplies biz

Sunday, March 31, 2002

VALENCIA, Calif. - In the provider's biggest deal since taking on Kaiser Permanente's medical supplies patients last May, Shield Healthcare last month picked up 14,000 new patients from the Santa Cruz, Calif.-based Beverly Home Care.

Beginning in March, Shield began servicing the medical supplies patients of three Beverly Home Care subsidiaries: Fresno, Calif.-based M-K; Sacramento-based WestNet; and Benicia, Calif.-based Western Rehab.

"We actively seek out at least one acquisition a year," said Cheryl Hornberger, v.p. of sales for Shield Healthcare. "This is a one of our larger acquisitions."

Shield Health-care, like other medical supplies providers, has benefited from the movement among HME providers to focus solely on their core businesses, mainly respiratory therapy and DME. Medical supplies providers will gladly take on what HMEs don't want: ostomy and urological patients who use supplies that garner notoriously low-margins.

"Beverly Home Care was no different," she said. "They will focus on their DME and respiratory business."

Hornberger said Shield has locations in four states (California, Washington, Colorado and Illinois) and that the provider's strategy is to start adding locations in a different state each year. Last year, it was Washington.

"Whenever we make an acquisition, we put a sales office and sales representatives there and a distribution center," Hornberger said. "We want a physical presence in the community in every state where we are servicing customers."

Hornberger said what's enabled Shield to make medical supplies a viable business is the computer system it has developed. The system, which ties each satellite location back to corporate headquarters, monitors customer bases and documentation such as prescriptions and certificates of medical necessity.

"Before we release an order for supplies, we know we're going to get paid," she said. HME