Faith and compassion drive HomeTown Oxygen

CHARLOTTE, N.C. - Spirituality can serve as a strong motivation for a company devoted to being the guardian angels of society's most vulnerable citizens—namely ventilator-dependent children. It is the potent combination of faith and compassion that earns HomeTown Oxygen of Charlotte, N.C., a third place spot in the 2015 HME Excellence Awards.

“When I came aboard in June 2013, what I found was a company full of integrity,” said CEO Shawn Stacy. “Integrity stands out no matter what the circumstances.”

With a focus almost exclusively on respiratory, half of the company's business is in pediatric ventilation, while 40% is devoted to sleep and 10% to traditional oxygen.

Over the past two years, HomeTown has expanded throughout the Carolinas, opening locations in Greensboro and Raleigh, N.C., and Greenville, S.C. But just as the growth seemed unstoppable, Blue Cross/Blue Shield of North Carolina—HomeTown's largest commercial payer—announced a 63% cut in reimbursement for CPAP devices, its largest unit sale product, bringing the expansion to a grinding halt.

“It was quite taxing financially,” Stacy said. “Suddenly revenues were substantially below budget, even though the business was growing significantly. Despite the unit growth, we needed to put the expansion on hold.”

Indeed, tenuous economic conditions within health care and the small business environment has thrown a number of hurdles onto the path to success, says Scott Dinning, HomeTown's founding principal.

“Providers today have to do more with less, meaning we have to constantly increase revenue in the face of massive cuts in reimbursement, while lowering our operating costs by coming up with innovative ways to continue providing excellent service at a lower cost,” he said.

To offset the dramatic disparity, HomeTown scaled back home delivery by drop shipping and by creating a Patient on Demand fitting and education center that has customers pick up products at retail locations. The approach seems to have worked, as revenues increased nearly 19% from July 2014 to June 2015, while labor costs dropped from 27% of revenues to 19% of revenues.

Though some business decisions have been tough to make, the guiding principle of doing what's right has been a beacon of confirmation for management as they forge ahead.

“Our founding philosophy was to not look to our competitors to build a good business—it was to hire the best clinicians, invest in technology and generally to find the best protocols to give our patients the best respiratory care possible,” Dinning said. “We knew if we did that, the business growth would follow.”