Mom's advice: Always put patients first

Editor's note: This is the second of three profiles of the 2012 HME Excellence Awards winners. Next month: Best Rehab Technology Provider.

LEXINGTON, Ky. - Mike Marnhout was just a kid when he learned the business principle that guides him today as president and CEO of Bluegrass Oxygen.

“My mom was a hospital administrator, and we learned about patient care from the very beginning,” Marnhout says. “You take care of all patients regardless of whether you get paid for it or not. Always have, and always will.”

Bluegrass Oxygen was awarded the 2012 HME Excellence Award for Best Home Respiratory Provider.

Marnhout admits it's gotten tougher to adhere to that principle in today's reimbursement climate—he's about 60% dependent on Medicare—so he's now getting creative in his business model.

The most significant change has been to provide all of Bluegrass Oxygen's respiratory patients—about 2,400 across the company's six locations—with a portable oxygen concentrator (POC) with their stationary concentrator at setup. Patients love it, which has led to a 15% boost in referrals.

“It's a huge investment vs. tanks, about seven to eight times greater,” says Marnhout. “But in the long run, the dollars you save in labor, gasoline, insurance—you have to change your model to survive.”

Bluegrass Oxygen's POC strategy differentiates the company in its target markets, and it's a focus of the company's successful marketing campaign. Marnhout stars in the company's 15- to 30-second TV commercials—Wheel of Fortune and Jeopardy are his most effective placements—and places newspaper ads in select markets.

Bluegrass Oxygen is the 10th business Marnhout has started over his 32-year career. He started this company in 1996 with one business partner—RT Craig Coleman—and has grown it to a 45-employee operation that services 100 counties in six states. Some of his service area includes urban areas like Lexington, Louisville and Cincinnati, but about 35% includes rural areas in Eastern and Southern Kentucky.

Other changes Marnhout has made to his business model have included outsourcing his billing and IT functions, using GPS technology for drivers and reducing his inventory load. Now he's focusing on the changes that accountable care organizations (ACOs) will bring—he believes HME providers must do more to educate patients and referral sources about their role in that care model. Like his mama taught him, Marnhout insists only patient-focused providers will survive.

“We live, eat and breathe patient care,” he says. “That's how I was raised. If you are able to, you should.”