The voice of reason? His name may be Gary Sheehan.


You may have read a story I posted earlier this week about Cape Medical expanding into the greater Boston area. My immediate reaction to learning the news: With all the doom and gloom in the HME industry right now, not only is the company expanding, but it's expanding in a Round 2 competitive bidding area?

I caught up with the Cape Medical's CEO, Gary Sheehan, earlier today and this is what he had to say:

HME News: What was behind Cape Medical's decision to expand?

Gary Sheehan: It's fairly obvious to those of us in the industry that you're going to need some additional scale in the coming years to survive given the top-line margin pressures. Additionally, we feel like our competitive advantage is a level of service and care, and a back-office efficiency that is scalable. We don't think that the success we've had to date is something unique to Cape Cod or any other smaller economy. We feel like we can deliver that same level of service and care in a larger market and Boston is recognized as the healthcare capital of the world. If we're going to be a leading-edge healthcare company, we feel like that's the place we want to be.

HME: How did Boston being a Round 2 competitive bidding area factor into your decision to expand there?

Sheehan: Our expansion into Boston has been a multi-year process of really examining our company and the macro trends in the industry and the opportunities that exist. Throughout the process, there have been a multitude of changes. Competitive bidding is on; it's off. There are a lot of different things that are happening. But we continue to feel like intelligent growth is the way for us to succeed in the future. So when it was confirmed that Boston was in Round 2, we said, "OK, we're going to have to pay attention to the back end very closely, manage the expenses side of things very well and continue to deliver on that service promise." We feel we can do that.

HME: What was your reaction to the, on average, 32% reduction in reimbursement?

Sheehan: The cuts being as steep as they were–I don't think that's any more troubling for us than for anyone else. It's bad news no matter if you're trying to stand still or if you're trying to grow. We feel like, given the volume of the cuts, you should be a little bit more aggressive about growth. I know that can be somewhat counterintuitive.

Check out Monday's NewsWire for the full Q&A.

Liz Beaulieu


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