Seeking a niche in health care.

Health care reform, an issue that is dead in light of the Republican Congress, has left what will probably be a lasting legacy: managed care, one of the fastest growing segments of the health care industry.

Managed care is designed to contain health care costs by managing a patient's care from proposed treatment to final payment. A network of hospitals, physicians and other health care providers agree to offer services for lower patient fees.

According to the U.S. Department of Health, over half of all insured employees now participate in managed care plans, which include health maintenance organizations (HMOs). Some black small business owners are trying to carve out a niche for themselves in the managed care marketplace.

A good example is Branches Medical, a distributorship in Ft. Lauderhill, Fla., that sells medical supplies to hospitals, doctors' offices and alternative care facilities. Right now, Branches CEO Hamish Reed is looking to form alliances with other black-owned small businesses that serve the medical community. "We need to form alliances in response to what hospitals are doing; they're merging." As sales reps for 200 medical equipment manufacturers and 23 pharmaceutical firms, Reed and his business partners, his siblings, are sealing deal after deal in medical equipment sales--from syringes to medications.

Like many entrepreneurs, Reed balances his time between canvassing for accounts and figuring out when the next mega-medical merger will take place.

"When hospitals merge, we are no longer competing for one equipment contract per entity," says Reed. "Now there's one shopper buying for the whole 10-hospital conglomerate. And that means we will either rake in a lucrative contract or get used to brown bag lunches."

Although the state of health care in this country is still unresolved, some fields, like medical supplies and equipment sales, elder care, temporary help and messenger services, have proven to be viable markets for minority- and women-owned businesses.

Just look at the open market. The U.S. Department of Health & Human Services reports that health expenditures topped $600 billion last year. Medical equipment sales topped $52.7 billion in 1994, according to the Health Industry Manufacturers Association in Washington.

"We've always been in the health care industry," says Ken Massey, vice president of Sprint Courier in Wankegan, Ill. "It was only natural for us to do the work we're now doing with Abbott Labs." Sprint latched onto the $9.2 billion coattails of Abbott Laboratories in Abbott Park, Ill. Sprint gets about 40% of its business from the medical services industry.

Sprint transports blood work to and from hospitals, physician's offices and blood banks. The company also transports feeding tubes for premature babies and home health care products.

Sprint has been steadily increasing its sales as Abbott enlarges its market share. Massey plans to expand his business next year with an air courier service. Because hospitals are merging, Sprint needs to provide same-day service on a national level. "I contract with hospitals and testing labs. I need to be able to serve all the hospitals in the conglomerate, whether they're in Chicago or Minneapolis," Massey declares.

"This business is market-driven and needs a lot of money to compete," says Ralph Williams, chairman and CEO of R.O.W. Sciences, a Rockville, Md.-based biomedical and health services research and technology firm. "[If we had] set health reform laws, one could strategize about customers' needs and meet them. But we can't afford to keep shifting."

But predictions are sunny for Massey and other small business owners who can find a niche that won't be swayed by congressional winds.