For Emily Spencer, CEO of Denver-based premier Medical Corporation, seeing the company she helped found reach the 10-year mark is certainly a milestone to be proud of, but it is not the only one. Growing revenues 4,000% in a decade without sacrificing her company’s commitment to quality care is the real success.

“I would rather provide personal service to a smaller number of patients than just drop things off to thousands,” she says. “Getting as many patients as possible is not my philosophy. I have families counting on me, and I want to make sure they get the best respiratory care possible.”

The extent to which Spencer values the personalized approach to patients is not some intangible customer service goal; it is the driving force behind her strategy and Premier’s unique business mix. Premier supplies liquid oxygen, medical equipment, gases, and services to health care facilities and home health care patients throughout Colorado. Since its inception in April 1993, the company’s client base has expanded from one home health care patient to 1,500 hospice, long-term care facility, and home health care patients.

FROM LAW SCHOOL TO CEO
“I was supposed to be a securities lawyer,” Spencer says with a laugh, looking slightly ruefully at her spartan office in Premier’s corporate headquarters. While the Juris Doctor Spencer earned from St Mary’s University in San Antonio, Tex, did not lead her to litigation and high-powered business deals for the Securities and Exchange Commission, it did—along with her prior business experience on Wall Street in the heavily male-dominated securities industry—provide her with the tools necessary to think analytically on her feet and not to be intimidated by much of anything.

In 1993, when Spencer was fresh out of law school, her brother-in-law, Shon Spencer, approached her with the idea for Premier Medical, pointing out both his extensive experience as a respiratory therapist and complete lack of knowledge in running a company.

“Many small businesses fail because the person running it doesn’t have the business background to do it,” Emily Spencer says. “I wanted to help Shon avoid that mistake, so I agreed to work with him for 1 year.”

A decade later, Spencer has capitalized on her business and legal acumen, and has turned the kernel of an idea into a successful small company with ample prospects for further expansion. The melding of Spencer’s business experience and her brother-in-law’s clinical know-how has resulted in domination of the technically demanding and rigidly regulated market niche of oxygen delivery and related respiratory services in Colorado.

GROWTH, BUT NOT AT ANY PRICE
Premier’s patients and revenues have grown at a consistently high rate over the past 10 years, but the price of the company’s success has never been compromising its standard of service, Spencer says. “What is important to me is taking care of the patient, so we went into areas where there was not adequate high-quality and individualized service.”

The company’s beginnings were quite humble. “When we started, we had one patient, and Shon and I worked out of our homes. I handled all the financial and legal matters and he obtained new accounts, delivered oxygen, and took care of patients’ respiratory needs.”

For the first year, Premier provided only portable cylinders and concentrators to home health care patients. However, Spencer soon realized that in order to increase business the company would have to expand into liquid oxygen, as Colorado doctors showed a clear preference for liquid over its compressed gas form. During the next year, she became a self-taught expert on the intricacies surrounding the transport of liquid oxygen and compliance with Food and Drug Administration, Occupational Safety and Health Administration, and Department of Transportation regulations.

Two years into the venture, Spencer and her brother-in-law opened Cryogenic Medical Gases and established their own fill plant so they could buy liquid oxygen wholesale and control the liquid and compressed gas for Premier’s burgeoning list of patients.

BBA NEARLY SPELLS DISASTER
The company was on the fast track to success when Congress passed the Balanced Budget Act of 1997, severely curtailing Medicare reimbursement and impacting margins industry-wide. As 90% of Premier’s income came from Medicare patients at the time, Spencer decided to spread the business risk by moving away from such a heavy dependence on home health care patients. The wholesale liquid oxygen division quickly moved up to 50% of Premier’s business mix, but Spencer was still not satisfied with the revenue breakdown.

“We decided to use our knowledge of the compliance issues and equipment to provide liquid oxygen and related services to patients in hospice and long-term facilities.” Spencer says. Premier began subcontracting with smaller companies to provide liquid oxygen directly to their patients, while it began looking for its own hospice accounts.

Fortunately, the company was soon able to add the largest hospice in the area, Hospice Metro Denver, to its list of patient facilities. “Hospices are very service intensive, and we make decisions based on providing the best service,” Spencer says.

The strategic shift away from the saturated home health care market turned out to be a wise decision as it ensured the company’s initial foothold and current leadership position in providing liquid oxygen and related services to hospice and long-term care patients.

At a CrossRoads
Another strategic move was made in 1999, when Premier relocated to its current facility in Denver. With its combined warehouse and corporate offices located at the intersection of east-west I-70 and north-south I-25, there is easy access to the four corners of Premier’s service area, and the equipment trucks are able to get in and out of the fill plant and on to their final destinations quickly.

Simultaneous with its relocation, the company purchased the oxygen division of a former customer, continued to expand its customer base, and moved away from providing subcontracted liquid oxygen services.

Spencer is now carefully planning the company’s next expansion. “West,” she confirms. “Our current service area extends somewhat beyond Denver’s Front Range, so our next growth phase will definitely be west. We have facilities waiting in line for us to tell them we are ready to take them on.”

Premier picked up 12 facilities from November 2002 to March 2003, and there currently are several more in the pipeline. However, Spencer rigidly adheres to her customer service philosophy. “I’ll grow only to where we can keep our service at the highest level and then I go into a holding period until we get back to where we know that we can maintain the highest level of service and bring on more accounts.”

For Spencer, who now owns the majority of the business, serving her customers well is almost enough. Building on this successful foundation while maintaining her high standards is the challenge that keeps her striving for more.

“We look at our relationship with our customers as a long-term partnership,” she says.

Eliza Gibbons is a contributing writer for Dealer/Provider.