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CompHealth: honored in national competition.

COMPHEALTH Honored in National Competition

A business that grew from $7 million in annual sales to $55 million six years later would seem to be doing well. But for CompHealth, of Salt Lake City, which experienced this growth between 1985 and 1990, this proved to be a trying time. So impressive was the firm's handling of its problems, though, it recently was recognized as the top Utah designee in the national Blue Chip Enterprise Initiative.

Sponsored by Connecticut Mutual Life Insurance Co., and endorsed by the U.S. Chamber of Commerce, the Blue Chip Enterprise Initiative was launched in September of 1990 to help small businesses compete more effectively through the exchange of insights and strategies for success. By putting the designees' stories in printed and video forms so managers and owners nationwide can learn from them, the initiative hopes to improve the competitiveness of America's small businesses.

CompHealth is a prime example of a small business confronting and mastering many hurdles. The company is a temporary employment agency for physicians and healthcare professionals, the first of its kind in the nation and still, today, the largest. Begun in 1979, it initially had a narrow market focus. "We thought this would be a phenomenon of rural-practice family practitioners who needed to get away," recalled Tom Harrison, executive vice president.

Entering New Markets

Within 18 months, the firm realized a demand for its services beyond this target market. First came radiologists, then anesthetists, followed by other physicians, and finally non-physician healthcare professionals, including nurses and physical therapists.

Growth until the mid-1980s was strong, but the firm was operating only at breakeven. In 1985, management decided to buy the company via a leveraged buyout. This added $800,000 in debt, which had to be repaid within three years. The combination of debt and growth put a variety of strains on the company. "The challenge we faced was to keep the company growing, pay off the debt, and keep the quality of our service high," said Harrison.

The firm faced its problems creatively. Rapid company growth, increased diversification into related markets, and stricter state regulations regarding the granting of temporary physician licenses all combined to put severe strains on the firm's management structure. In response, CompHealth reorganized into specialty-specific teams.

The Team Approach

Each team focuses on a particular medical specialty, such as family-practice physicians or radiologists. The teams do everything with regard to their market niche. Their responsibilities include marketing CompHealth's services to hospitals, recruiting physicians or others they represent, checking credentials, taking care of licensing requirements, matching professionals with hospitals or clinics, and doing the billing and collections.

Currently, CompHealth has 16 teams, with four to 13 members per team. "The teams make sure that the quality of our service is as high as can be," says Harrison. "This wouldn't be possible if one part of the company handled marketing and another recruiting."

It's not enough to have teams. Team members must be able to communicate by sharing knowledge and access to the same information. Since this is a service business, giving all team members access to what everyone says to clients, physicians, and others is essential for the entire operation to work well. So CompHealth invested "well over one million dollars," says Harrison, in a computer system that fosters comprehensive communications. All 180 of CompHealth's employees has a computer on his or her desk, including a 13-person team devoted solely to data processing and information services.

More Fluid Cash Flow

Impressive to the Blue Chip Enterprise Initiative judges was not just CompHealth's innovative management structure and commitment to leading-edge technology; they also liked how it handled its finances. For instance, the firm became very aggressive with its collections. Instead of waiting 45 to 60 days after the performance of a service to get paid, as had historically been the case, the firm was able to get its net accounts receivable paid on an average of about 10 days.

Marketing is another strength of CompHealth. The firm has instituted what Harrison calls "a needs-satisfaction system of selling." When a potential client calls, the CompHealth team member asks questions that result in a detailed assessment of the caller's needs. The information gathered includes why the healthcare worker is needed, how urgent the need is, and the qualifications required. With this information, plus the information in CompHealth's computer database, the worker can tailor the team's services to meet the caller's needs.

According to Harrison, the industry has firms that quickly promise to provide various healthcare professionals, but are ultimately unable to fulfill these promises. The nature of the business makes such promises problematical: there are always more "vacancies" than qualified professionals to fill them. As a result, CompHealth seeks to avoid promises it cannot fulfill. Instead, it assesses what it can do and explains this to the prospective client. Such control of its marketing has helped make CompHealth its industry leader.

The judges of the Blue Chip Enterprise Initiative were impressed with CompHealth's ability to handle fast-track growth, improve cash flow, and keep tight reins on quality control and marketing. And all the while, the firm was, in effect, creating an industry. The firm made sure it remained sensitive to customer needs. No one had ever done temporary placement of physicians in an organized, systematic manner prior to CompHealth.

Based in Salt Lake City, free-lancer Alan Horowitcz specializes in business and computer topics.
COPYRIGHT 1991 Olympus Publishing Co.
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:contains related article on applying for the Blue Chip Enterprise Initiative; the Utah healthcare employment agency is recognized by the Blue Chip Enterprise Initiative
Publication:Utah Business
Date:Sep 1, 1991
Words:900
Previous Article:Longyear: one hundred years of business.
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