Power players: From left are Stephen L. McCoy, Frank J. Zarka, and Ray Noeker.

"Do one thing and do it well,” could be the motto of Byram Healthcare Centers. At a time when some HME companies are abandoning their disposable supplies business, this Milford, Conn, disposable supplies provider has found success by staying true to its roots.

With more than 30 years of experience in providing medical supplies to customers in their homes, Byram has a solid reputation. Since the company was founded in 1968, it has specialized in disposable supplies, working closely with its customers, including health care professionals and organizations, to assure seamless coordination and efficient delivery of medical supplies.

By specializing in one market segment, Byram’s managers say the company has mastered the art of knowledgeable customer service, accurate and high-order fulfillment rates, third-party billing, and comprehensive reporting.

Today, the company continues as a service-intensive, niche-oriented organization and is a leading national provider of disposable medical supplies to the customer at home. Its product lines include diabetes, ostomy, urology, incontinence, and wound management supplies.

Byram’s focus on one aspect of HME could be considered prescient, as the HME industry itself continues to become more specialized. So, when Byram underwent recapitalization 3 years ago, the new executive team took advantage of the company’s area of expertise.

The company proactively seeks opportunities to work with other HME companies that desire to reduce or eliminate their exposure to the disposable supplies segment. By relieving those providers of the burden of dealing with disposables, Byram has generated growth for itself without posing any potential competitive threat, its managers say.

Experience Makes a Difference
When the business underwent recapitalization in February 1999, at the helm were numerous experienced hands in the field. CEO Ray Noeker is a veteran of the equipment business who previously worked for California-based HomeMedCo and Costa Mesa, Calif-based Apria. COO Frank Zarka is a former Apria executive. Jerry Jones, former CEO of Apria, serves as Byram’s chairman of the board. Finally, the recapitalization also involved CFO Larry Janes, the co-owner of Byram prior to the company’s recapitalization.

Using funds from a private equity group, the team strategized that the best way to position Byram in the HME market was to build on its already apparent strengths. “The way the executive team viewed it, Byram was a provider specializing in a particular niche, and the decision was made to use that platform in order to grow the position of the business within this particular segment of HME,” says Stephen McCoy, senior vice-president of Byram. “Through acquisitions and internal opportunities, the company would also generate growth.”

Since Byram had always focused on disposable supplies, the company had plenty of experience and longevity associated with that market segment. By focusing on proper investments in technology and on logistics, McCoy says Byram was able to achieve the scale necessary to make money and succeed long-term within its specialized segment.

“We felt that this represented an excellent foundation from which to grow the business,” says McCoy, who joined Byram last year, bringing along his expertise in the health care industry. He most recently served as CEO of Homecare America, a provider specializing in the retail segment of HME, and says he made the move to Byram because he was attracted by the position of the company, the strength of the management team, and the company’s overall growth strategy.

Byram’s primary growth strategy involves a direct selling effort targeting health care professionals. Today, Byram employs 25 sales professionals nationwide who are calling on home health agencies, managed care groups, and clinical referral sources across the health care continuum.

Part of McCoy’s role at Byram has been to use his marketing and business-development skills to increase performance associated with the company’s overall business strategy. He works at supporting the sales effort, as well as evaluating direct marketing opportunities to effectively communicate the Byram message to the marketplace.

“I am involved in forming strategic partnerships with other providers who may be looking to reduce or eliminate exposure with disposable supplies,” he says. “Many are focused on a core segment of the industry such as respiratory, rehabilitation, and/or equipment. To the extent that providers would like to partner with someone and work with a company that is supportive of their efforts to de-emphasize the disposables segment of their business, we make an excellent partner.”

A Winning Strategy
So far, Byram’s focus on partnership and acquisition to generate growth seems to be working. The company reaches some 175,000 customers a year across the country. In addition to its corporate offices, Byram has six operating centers: Worcester, Mass; Greenwich, Conn; Clearwater, Fla; Marietta, Ga; Denver; and Broadview, Ill. The company also has warehouse distribution centers in Somerset, NJ, and South Bend, Ind. It employs about 250 people, who are distributed among direct sales, billing, customer service, and purchasing.

McCoy says Byram plans to open more distribution centers as the company expands, and it may consider opening more stores in certain communities. Through acquisitions, the company already has three walk-in stores located in Clearwater, Marietta, and Worcester.

“We accept walk-in business in those locations, although it is not a core strategy of ours in terms of moving forward,” McCoy says.

Byram’s strategy relies more on its goals of acquisition and partnership. In the case of the former, the goal is to take on the supply-driven patient portion of business from companies that are looking to concentrate on the higher-margin segments of the marketplace, such as respiratory care, rehabilitation, or HME. In September 2001, Byram says it acquired the $7 million disposable medical supplies component of White & White, a 17-location, $40 million HME in western Michigan. Most of White & White’s patients were redirected to Byram’s Midwest service center based in Chicago.

McCoy also has been active in spreading Byram’s message that the company presents an excellent partnership opportunity for HME providers. Byram worked with Mount Carmel Health Plans in Mount Carmel, Ind, to transition its diabetes, ostomy, urology/incontinence, and wound-care supplies patients from its wholly owned HME provider.

One of the latest partnerships for Byram has been with Lincare. “We took the supplies component [of providing home health care] and Lincare took the HME/respiratory component,” McCoy says. “By working together, we maximized the value for the seller, so it was a ‘win-win-win’ situation all around. In the future, we hope to get more involved in working with providers in similar ways.”

McCoy says Byram poses no competitive threat to dealers who want to partner with them. “We often cooperate with other providers in the markets we serve in terms of relationships with referral sources,” he says. “Those sources in turn feel comfortable using a provider that specializes in one particular segment or the other.

“All in all, this kind of partnership poses a significant advantage for providers when they are considering alternatives relating to the disposable supply segment,” McCoy says. “There also is no question that partnership equals a huge advantage in purchasing power and competitive positioning in the market.”

Another advantage is that Byram is being geographically situated so it can easily assimilate many patients, McCoy says. “We are well penetrated on the managed care side as well, while many other parties interested in acquiring these patients may be shut out on the managed care plans,” he says.

The most difficult aspect of business has, in fact, been the myriad billing scenarios brought on by managed care, which McCoy says are handled on a day-by-day basis by taking a very pragmatic approach and staying focused on the company assets. “Disposable supplies is not a growth area,” he says. “In fact, if you look at the industry, you will see it grows slower than any other segment. But it is all we do. This is the business we have chosen to be in, and the market is large enough that it represents opportunity for us to grow our share. That is what we intend to do.”

Liz Finch is a contributing writer for Dealer/ Provider.