An indie twist on M&A

CLEVELAND – In a rapidly consolidating HME industry, the family-owned Medical Service Company says its commitment to people makes it an attractive partner for owners looking to sell their businesses, says Josh Marx.

The 71-year-old company announced in May that it bought Wisconsin-based Metz Medical.

“You obviously have public companies, private-equity backed firms and completely private companies (buying),” said Marx, vice president of business development, managing director of the company’s sleep business, and a third-generation employee. “We are one of the only ones that I’m aware of that is family owned, funding our own growth and remaining independent. You join the Marx family when you become part of Medical Service Company.”

A big reason Medical Service Company emphasizes its commitment to people: When the company makes an acquisition, it wants a committed team already in place and it wants to keep them in place, says Marx.

“A lot of the expansion we are pursuing is in new markets,” he said. “We know that we need the team – we want that personnel and infrastructure – to continue supporting the community.”

The company puts its money on it. In 2019, it began offering a $15 minimum wage, well ahead of the current push in the broader marketplace. Profit-sharing, annual merit increases and the opportunity for work that is challenging and meaningful are also part of offering a competitive package, says Marx.

“One of the great things about growing is there are now about 400 people at our organization that want to be constantly challenged and we are able to offer them that work and create new jobs, departments and divisions,” he said. “The acquisition strategy is important to expand and to remain relevant in such a consolidating industry but also present new growth opportunities (for our personnel).”

Other metrics Medical Service Company uses when assessing a buy: It looks for sleep and respiratory focused companies, urban markets and relationships with health systems, says Marx, who says one of the larger pain points health systems face is getting patients out the door.

“When the patient is told they are ready to go home, we don’t want DME to be the disruption to why they can’t go home,” he said. “The programs we’ve built have been hugely customized toward helping that process become more efficient and smoother. We have been able to decrease the turnaround time from time referred to delivery, as well as increase customer satisfaction.”

There’s a lot of good-quality companies in the industry and the COVID-19 pandemic has only magnified that, says Marx. Joining a larger organization gives them a step up to the next level, he says.

“How do you remain relevant in a rapidly changing industry, which requires significant investment in technology and regulatory expertise,” he said. “A larger organization can unlock opportunities to bring better care.”