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Freedom Health, a Florida health insurance company based in Tampa, grew revenue by more than 10,000% between 2005 and 2008. And they're not done yet.
The company has seen revenue escalate from $1.8 million in 2005 to $182.8 million in 2008, an astounding level of growth that has taken Freedom to No. 7 on the 2009 Inc. 500 list of the fastest growing companies in the nation.
Freedom COO Sidd Pagidipati says revenues for 2009 will be above $300 million. That means over four years, that 10,000%number may become 15,000%.
Pagidipati attributes the growth to automation and simplification — as well as some good old-fashioned customer service. All three of those keys to Freedom's success are demonstrated in the company's call center.
On the customer service side, Freedom has 120 employees staffing that call center, a number Pagidipati says is 50 to 100% higher than the competition.
To keep things simple for those employees, Freedom has its call center employees complete a four-week training course to learn their work. “Health care's like a puzzle,” Pagidipati says, and it pays for employees to know how to work with that puzzle.
The call center is also equipped to handle a significant portion of incoming phone calls automatically.
For example, when members call to verify their eligibility, the process is handled entirely by computer. That's 20%of all phone calls taken care of without anyone having to pick up the phone.
Freedom's focus on simplicity and customer service is motivated by the Pagidipati family's own personal experience with the commercial health insurance industry. Shortly after Sidd's mother, Rudrama, opened Suncoast Labs in Ocala in 1989, she needed to insure the lab's employees.
After Sidd contacted an area broker, he said he expected to hear back within a week or two. But that's not what happened.
“I waited between three and four weeks for a proposal, and what I got was outrageous: $400 per employee a month,” says Pagidipati. The lab simply couldn't afford that.
So rather than try to beat the health insurance industry, the Pagidipati family joined it. While his father, Devaiah, used his medical background to tap into Florida's provider network, Sidd hit the books, studying Florida state statutes himself to figure out how to get the company off the ground.
On Sept. 1, 2005, shortly after opening their doors, Freedom Health had roughly 300 members.
Today, membership stands at 40,000. Talk about growth; Freedom's latest numbers make them the fourth largest HMO in the state.
“We're keeping the big health plans honest,” Sidd Pagidipati says. He points out that the competition could have saved a lot of money if they had been any easier to work with back when his family was buying insurance for Suncoast.
Now, the industry has another competitor that looks like it will be around for a long time.
Furthermore, that competitor fully intends to continue growing. Led by CEO Kiran Patel, the management team at Freedom is aiming for 25 to 30%growth in 2010. It will achieve that growth by expanding its member base in the 30 counties in which it already operates, says Pagidipati.
The company is also considering expansion into other states. With the population of U.S. seniors expected to grow from 46 million to 76 million by 2030, Pagidipati says his company has to continue to be efficient to make the most of the market.
That continued growth is crucial for Freedom because of the company's extremely low profit margin. At just 2%, Pagidipati has to make sure the company continues to add members, so margins can improve over time.
Considering those margins, one would expect that Pagidipati's job is made a lot easier by the company's choice to put off going public despite their successes. When asked about the potential for such a move, he says it's likely at least two years away.
After making the top 10 of the Inc. 500 list, many will be watching as that decision looms — and to see whether Freedom Health can grow their revenue another 10,000% over the next three years.
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