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Corporate medics
Tom Sweet has grown Tampa-based TechHealth by focusing on a niche: getting care more quickly and efficiently to people injured on the job.
COMPANY by Dave Szymanski | Tampa Bay Editor
Even though TechHealth has started to mature as a company, closing in on $100 million in revenue, Tom Sweet is determined that the Tampa firm remember its roots and think like an entrepreneur.
"We need to be nimble," says the avuncular Sweet, the chief executive offer.
Nimble means to continue to look for creative ways to use technology and relationships to leverage better prices and service in its health care niche.
It's really a niche within a niche. First, it is helping insurance firms, self-insured companies and third-party providers. Second, it exclusively serves workers' compensation claims. So the goal is to get the best prices for medical services and health care products for people injured on the job, so they can return to work quickly.
If business were like wars, then TechHealth would be combing the land to provide the medics and medical supplies for the injured corporate troops so they could more quickly return to fight again.
TechHealth has had its battles.
It started in 1999 with three employees in a dusty brick former cigar factory with creaky wooden floors in Ybor City. Staff members assembled their own desks.
Sweet was one of its first investors. It raised private capital and started a popular and award-winning consumer Web site and subsidiary, AccessLife.com, which served people with disabilities with information and medical products. It did a live chat with actor and board member Christopher Reeve.
Its staff grew, but when it couldn't raise enough second-round financing, it shut the consumer Web site down and laid off the AccessLife staff in Tampa.
But it kept a small staff and retained the commercial side of the business. Today, privately held TechHealth is in a carpeted glass, stone and steel suburban office building in Hidden River Corporate Park, in North Tampa. It has 240 people and about 370 clients.
Its 2008 revenues should reach about $85 million. It has been steadily growing, even this year, at more than 25% annually. It hopes to top $100 million in revenues next year.
The National Council on Compensation Insurance estimates that workers' compensation costs have increased at an average annual rate of 9.2% since 1995, largely due to aging baby boomers, which has increased the proportion of older workers, increasing injury severity and correspondingly higher claims costs.
This demographic shift is responsible for the aggressive search by employers to reduce overall healthcare costs. TechHealth has tried to position itself to serve this growing need by aggressively managing each claim to find the best clinical outcome at the most efficient price.
Constant model
Even though it has looked for better ways to use technology, its business model has not changed much, Sweet admits.
TechHealth focuses on diagnostic imaging, durable medical equipment, home health, physical therapy and pharmacy services. It allows its clients to outsource the management of those services for their beneficiaries.
The company coordinates care through its contracted network. TechHealth's technology and business approach lowers the cost of these services by managing care. As a result, TechHealth can drive services to its select, contracted providers in exchange for deeper discounts and higher quality.
TechHealth's Connections software helps it to manage medical referrals so it finds the best provider, schedules quickly and alerts its people to do follow ups and get medical reports. The system manages the work flow so it can provide better service and ensure patients are getting the right care. The system also allows for electronic ordering, and it has various interfaces with clients to facilitate obtaining reports and billing.
The company's Tampa call center manages several million inbound and outbound calls annually with an average call response time of five seconds. TechHealth has 130 customer service employees in Tampa.
TechHealth monitors the quality of vendors, contracts with them and pays them rapidly to get quick delivery.
"We are trying to drive business to the best vendors," he says.
After getting the vendors, TechHealth schedules appointments, does follow-ups, and gets medical reports. It makes sure patients have medical supplies and nursing care, becoming an aid to help the patient and his family.
If your company worked with TechHealth and one of your workers was injured, TechHealth would make sure they rapidly got treatment. Working with your insurance carrier, TechHealth would coordinate care and arrange for all medical supplies needed.
If a worker sprains an ankle and needs an X-ray, TechHealth would go to the X-ray providers and get the best rate. It would pay the X-ray center and get reimbursed from the insurance company.
So, for example, TechHealth may charge an insurance company $400 for an MRI after paying $380.
Because TechHealth's business is serving injured workers, covered by their employers, speed counts.
"These are people injured on the job," Sweet says. "So it's important to work quickly because employers are paying for lost-time wages. Rapid treatment is important. We want them to recover quickly."
Some of its clients include The Travelers and Nationwide Insurance. It also works with Cracker Barrel restaurants, Wal-Mart and Boeing.
A consolidating industry
The health service industry is slowly consolidating. In Florida, besides TechHealth, there are PMSI in Brandon and MSC in Jacksonville.
TechHealth believes its innovations and paperless technology set it apart.
"There's no mistake that our name is TechHealth," Sweet says. "We connect with our customers to make sure it's more efficient. We help the client to find the best products. We've done a lot of research."
The slowing economy has affected TechHealth, because as unemployment rises, there are fewer potential workers' comp cases. But new clients continue to contact the company.
In addition to insurance companies and self-insured companies, TechHealth also works with third-party administrators, such as Cambridge, which handle claims administration. Insurance adjustors pay the claims.
Besides being nimble, one of the biggest lessons Sweet has learned as a CEO is having a solid management team and strong financial backing.
The biggest challenge at TechHealth has been coping with rapid growth.
As a company growing 25% a year, TechHealth has had to have infrastructure in place to handle it. Good hiring and good programs to retain people have been important. "Turnover is a killer," Sweet says. "There are hidden costs to the organization."
One way it has retained good people is a large work-from-home program. Of its 130 people in customer service, 38 work from home. One works in South Korea. Another in California.
"We retain good people and it helps us keep costs down," Sweet says.
It has moved some of its billing functions offshore, to the Philippines. But those workers don't deal directly with customers. The customer-service positions go to Americans.
"We are dealing with repeat customers, so it's important they develop relationships," Sweet says. "Culturally, handling that overseas may be a challenge."
TechHealth wants to continue to grow in its industry and has begun some discussions to get more deeply into the health insurance market, such as group health.
The company is also looking at how it further evolves its products and becomes more of an expert to clients, with more knowledge-based products. It is looking to become the expert in durable medical equipment, like wheelchairs, or in prosthetics.
To date, TechHealth has focused its sales efforts in the workers' comp sector, however its services can also be deployed in the government, auto liability and disability markets.
REVIEW SUMMARY
Business: TechHealth Inc.
Industry: Medical services and health care products
Key: Use technology and relationships to drive down health care costs and speed up medical service to get injured workers back on the job.
BY THE NUMBERS
Tech Health Inc.
Revenues (in millions)
2004 $33.0
2005 $45.5
2006 $59.7
2007 $75.0
2008 $85.0
2009 (proj.) $102.6m
Revenues by segment
Home health care 30%
Durable medical equipment 26%
Rehab 19%
Diagnostic imaging 13%
Pharmacy 6%
Other 6%
Employees
2006 200
2007 215
2008 245
Profitable every year for the past five years.
Source: TechHealth Inc.
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