Josh Watts, the CEO and Co-Founder of MedTrust Medical Transport, grew his company’s revenue from $1.5m in 2014 to $5.4m in 2017, a 256% increase, and now they are on track to hit $10m this year.
MedTrust Medical Transport provides emergent and non-emergent medical transport in the Lowcountry and Grand Strand areas of South Carolina
In this interview with Eversprint‘s Malcolm Lui, Josh shares how he and his team accelerated their high value sales by:
- Focusing primarily on providing related service to and from hospitals.
- Measuring themselves against what they can do, not against the competition.
- Constantly looking for and correcting variances that adversely impact their core services. lue
: Malcolm Lui here. Welcome to Eversprint.com. Today we're speaking with Josh Watts, the CEO and Co-Founder of MedTrust Medical Transport, a fast growing company that provides emergent and non emergent medical transport in the Low Country and Grand Strand areas of South Carolina. Josh grew his company's revenue from $1.5 million in 2014 to $5.4 million in 2017. A 256% increase and now they're on track to hit $10 million this year. Welcome to the call Josh
: Thank you so much. Appreciate the opportunity.
: So Josh. How did you do it? How did you grow your company sales so fast?
: You know we're in a traditional business that happened to achieve the hockey stick that everybody talks about. And you know we've answered this question quite a few times over the last two years. But the real answer is not all that complex we decided to focus on a very specific area of our industry which is Hospital a facility transports. We understood. Based on that focus what to say no to from a business perspective. And then we were able to get a lot of really high powered folks from all over the country really to buy into that focus buy into that kind of niche and come join us here in Charlestons and that's really you know great people great plan.
: So did you say then the driver the biggest driver of your huge increase in sales from acquiring new customers new clients. More than anything else.
: Yes so you know up until probably 2000 15 or so med trust was operating like most ambulance companies which is a diverse group of transport types. We were serving nursing homes we were serving individual patients for transports for services such as dialysis or wound care. We were doing some work with hospitals but not on a primary contracted basis. And so the biggest driver and why it's been able to kind of grow exponentially on us is that we've started saying no to those things that were not either directly hospital related or complimentary to the hospitals. Right now trust has a mix of about 82 percent of our transports originate at a hospital or hospital owned facility. And that's very very unusual for our industry. And so with that hospitals are learning in it and associating that trust with someone that does hospitals. So that's that's really the difference is that we're not trying to serve mini masters we're really really building the entire business to serve hospitals which are certainly different hospitals or hospital but they also share similar opportunities that we're able to help solve.
: How did you and your team come to the revelation that you are just going to focus on serving hospitals more so than everyone else.
: So a couple of reasons. You know healthcare reimbursement as a whole has a lot of downward pressure currently a lot of negative some negative pressure if you will so while costs are going up revenues going down on a overall basis. So basically what we have been able to do is kind of focus on you know at the end of the day what we've been able to do is focus on the part of the business that is more contractual as opposed to kind of fluctuating with the market. Hospitals are always going to have a need where as other parts of the business may ebb and flow a little bit more for instance Assisted Livings are a part of the business that that go up and down with the economy or folks are always sick that hospitals seem to be kind of at the center of what they call the medical home or the center of healthcare for the for the country in the way that reimbursement models are being built right now. So you know for us it was kind of go to the source in the hospitals are very very hard to convert to a client. But there are also even harder to lose. So there was just a lot of stability in that focus. That's that's the why behind I guess the reason for hospitals is
: It was pretty obvious that hospitals should be a target. Or was this a new concept for both you and your industry.
: Obvious. So to me if you understand your business it became fairly obvious fairly quickly but a lot of folks that own ambulance companies are burnout paramedics. Not that you know it's not meant to be really negative. More to just shine a light on the background of some of the folks that are that are owning or running ambulance companies. You know from Ed trust the co-founder myself my business partners we have a very diverse background not all of it in the ambulance industry. And so you know things like finance and human resources and marketing and business development things like that that are taking it taken for granted in other industries and the ambulance business they're not that common. So I'd say for the bystander looking at the industry they would probably arrive at the same conclusion. Just sometimes when you're in the forest you can't see the trees. A lot of the people working in the industry you know for whatever reason didn't gravitate that way. But it's you know it was it was a deliberate decision the decision was made probably 2015. We spend 2016 retooling the business from a personnel perspective from an equipment perspective from a training perspective. So it was about a two year process to Thailand that first major health system contract that since then we've landed four additional in South Carolina and then have some further expansion in the state and even some outside of the state that that will be happening over the next 12 months.
: Great. Fantastic. Now are other companies following your footsteps as well and also trying to target hospitals as their main source of of business.
: You know I'd say there are certainly companies that that have arrived at the same place that we are or are the same conclusions I should say. But the reality of it is there's a limitation on the number of hospitals and it's probably the highest the most complex client to serve in this industry. So the barrier to entry is really the clinical requirements and just the business Akman required to do that well. And you know our clients are being challenged right now from a reimbursement perspective so they're looking for great partners that help them you know save money. Help them make money in some cases. And in a big way help them manage risk so quality and understanding where we fit in the continuum of care. That's the story that is really winning for us and there's other companies that we certainly look look to as leaders in the industry and we would learn from those folks but we don't really measure ourself typically against a competitor we measure ourselves based on what's possible. And I think that's because of the makeup of the leadership group being so diverse. We challenge the status quo almost too often. But what I would say other companies I'm sure do some similar things but you know in South Carolina for instance there's just a 100 ambulance companies. There are I think 10 that have more than 15 ambulances. It's a very very fragmented industry. So we're kind of the exception based on the size and the scale and and those things
: From a comparison perspective how many how many ambulances Do you have.
: Currently have 33. Although we expect that number to kind of be exponential over the next 12 months. Expect to probably be in the 50 to 60 range by the end of 2019.
: We're without a place that many ambulances. How. How big a player will you be in the market.
: So I would say that would put you in the top probably well in South Carolina it would place us you know in the top 3 percent. And from a regional perspective which is kind of our long term goal are three to five year goal is the Southeastern regional focus and footprint. I think that would put us in the probably the top 10 percent maybe 15 top 10 15 percent
: Ok good. Early on in the conversation you mentioned how winning the hospital contracts is very difficult but at the same time once you win it it's it's also equally challenging for your competitors to take it away from you. Can you shed more light on your process for winning the new business and at the same time maybe shed some light on on how it's so sticky
: Sure sure well I mean at the end of the day it's basic blocking and tackling for most industries. We come with a multi level engagement with a hospital both before they become a client and after. So we really come alongside the client and learn you know what those same problems are that they all are trying to solve for in them what the unique challenges are. And you know it's something that really surprised me that it's not more prevalent in this industry. What we find and time again that nobody's attacking the problems that way. Many people look at. The services we provide as as kind of a commodity based service more logistics play you know what happens after the end of the medical care that the hospitals doing. But we very much look at our role as a we call it medical between medicine between the buildings. So we're actually engrain more with our clients and we start that process before they ever become clients by meeting their folks on the clinical side meeting their folks on the administrative side and then really important artist connecting what the expectations are of those two groups because they're different CFOs concerns the CEOs concerns are different from the chief nursing officer or chief medical officer and how do we how do we. How do we solve both of the problems you know and that's that's what we do it's a fairly long sales cycle typically. If we're talking about a new relationship that can be a year or longer. But there's also opportunities that happen faster because of need or are a failure of the current
: Ok when you start working or reaching out to the hospitals. I take it there probably aren't that many hospitals for you to target that are large enough or open and interested in all hospitals.
: I would say you're open and interested. But the funnel narrows fairly quickly. So what we are looking for is hospitals that have an equal commitment to quality hospitals that are interested in process improvement hospitals and are open to their vendors or partners engaging in a way that is beyond the kind of client vendor typical relationship. We really like to engage and meet with often and dig in and some some you know some structures some hospitals some personalities of the hospitals just aren't set up for that to be successful. So I would say it looks as if it's a larger funnel but when it's you know when it comes down to brass tacks at the end of the day they're probably the top 25 percent of the hospitals are the folks that we're focused on
: Right. How many of those are there in the South Carolina area.
: I'd say in South Carolina there's probably 20 potential clients maybe 25 if you look at you know some of the hospitals and have satellite locations smaller locations maybe 2025 target clients in the state.
: And how many of those are working with you now.
: Right now we're 5
: Oh while you got some some good opportunities ahead of you that you're only at five now.
: We have right now some of the some of the largest systems in the state. So you know a number of hospitals versus dollar value or or run or transport volume or kind of two different things so we work with some of the folks on the on the larger end of that top 20 or 25. So it's probably out of that group about a 40 percent market share 35 percent market share and state right now
: Ok. So you know once you're working within you're working closely with them you're partnering with them to help them with you know reducing risks reducing costs maybe carrying some revenue opportunities for them as well. Are your competitors doing the same sort of thing or are they just taking a different approach. Okay
: Now what they typically do or at least what we hear again this all it all depends on who you're competing with. Right. But what we're typically hearing is some competitors are either not sophisticated enough to even start that kind of conversation or they may be very large or cocky or both and come in and say we're the experts in our Art of the business. Let us tell you how this is going to work. And we believe that there is a sea of opportunity in the middle of those two mindsets. You know being nimble enough to work with clients on an individual basis but yet big enough to bring systems and process to solve problems.
: Right. So do your clients at the end of the day when you factor in the value that you provide. I mean the value you provide isn't simply just a lower cost per right. Right.
: Oh no in fact our cost our cost is we're in a weird industry so we have very little pricing plasticity. If you take a compliant mindset there really is a price that you should not go below. And that's in our world that's the Medicare rate that's kind of the floor if you will now I'm not saying competitors don't do that in an effort to gain business but we know and most great hospitals. That's really I don't want to say it's an afterthought. But in the big scheme their overall financial PNL it's it's it's a rounding error. So for us the it's really a value question because they're going to pay the same amount for bad service rate service. So where we come in sometimes they do agree to pay you know pay that debt get compliant. And they're happy to do that because the great service they're getting. But usually their hospitals say hey you know we're we need to get the budget to come here and cut there. And as long as we can do it in a compliant way then we'll we'll talk with him about that. We'll learn you know are there appropriate things that can be done. We can you know weigh in on. But at the end of the day we're very clear that Medtronic is a combined company. Will be able to sleep at night knowing that we will not be the reason why a regulator or the OIG or the attorney general or the FBI or any of those folks are going to be in their building will not be because of us
: Right. Yeah the cost of all those would be
: Oh it's astronomical.
: Have you lost the client yet so far. And if yes what happened.
: So we haven't yet. Obviously there's um there's a couple of initial clients that don't necessarily fit our current focus on hospitals. And we regularly kind of revisit that list and and look to see how to manage that. But we've taken the position that Charlestons are home that's our headquarters. These folks that we are partnered with in Charleston that are not hospital facilities are really what has helped us build a foundation. And you know we take a lot of pride in the fact that we have not lost a client lost a contract etc. So we have not at this point done that. If we were to ever separate from a client that would be because our focus is too far removed you know from their focus. And if that becomes the case I think from a from a business perspective it's the right thing to do you know to allow the client to get someone more aligned with their business. But at this point we've been able to manage that
: Fantastic. Now how are you keeping track of of what the client's alignment is and what your firm's alignment is and measuring the gap between the two and you're making the decision maybe 19 make some adjustments to minimize that gap as opposed to letting them go. How are you tracking that.
: Well a lot of in our world is geographic based so if we had a client for instance that was in an area that we serve. That was the only kind in that geography. Everything else is you know 30 minutes away a you across town. That's a big driver because again there is a portion of our business is logistics based. So if we're unable to serve that client well or if they add to Hiam a level removed from our ability to serve the hospital and other clients well then geography would drive a lot of that analysis. And so we measure everything we're a very data driven company so we measure on time performance we measure what they call time on task. So how long it's taken us to do various pieces of the transport cycle. We measure performance of course from a training perspective. So we're really looking to see is there a trend or a pattern that is is that they are adversely affecting our core business or are they being adverse mostly affected by our core business and so there's six rate K.P. accidents that question and we watch those and if there's movement them every time we kind of see a variance that's plus or minus 10 percent then we're going to start asking that question again just reevaluating that it's still a good fit.
: Right. When he when you have seen those variances happen how quickly is your team able to make an adjustment to bring it back in line with what you're targeting.
: Well it depends. While you know you have to do a root calls and figure out what's causing the variance and here do a gap as you mentioned to understand whether it was a systemic issue or an occurrence or or even singular issue. But I'd say for the most part we're able to adjust we try to use data from an analytics perspective statistically so what you don't want to do is whipsaw based on a bad day or even a bad week in some cases although we're aware of that and watch it. We do some rolling analysis for 6 8 12 week analysis and depending on the severity of the variance we may we may start making minor adjustments. You know after a week of seeing it but the the total cycle time of Princeton's change changing deployment or add additional resources in an area all of those things can take you know as little as a day and as long as 30 days if the variance is you know 20 percent or 30 percent then it may take longer because it requires additional you know ambulance assets or additional staffing to be hired Accenture but most of the time it's more weeks. We call it turning the knobs.
: It's hey we've got the right number of ambulances on. We have the right number of you know hours allocated that maybe they are not in the exact right place. We do things called Demaine analysis where we trained at all times and when did they come in and how does that look our day of week by hour of the day by area of the town. And you create kind of hop maps if you will that that that's really what we're looking at you know are we do we have the resources where they need to be at the right time
: And if the answer is yes then maybe you need more resources if the answer is no you don't have to spend the more money you just have to manage.
: Right at the beginning of our call you had shared with me how you're on track to make 10 million dollars this year. Right and you're almost doubling your business from from last year. Is that simply because you have new contracts with new hospitals that are all about ready to be signed and done or are you somehow able to get more business from your existing client base.
: So part of that is we were we were on about 8 million dollar run rate at the end of 17. But from an annualized perspective you know at the end of year total number was as you mentioned you know roughly half of what it will be at 18 so a lot of our onboarding took place in 17 between April and November. And so the impact of all of that Ed. A lot of that is being felt for the first time this year. And then on top of that yes we want some additional new business and you know have have figured out how to you know it's drub is just with our existing accounts. But I would say a lot of the impact this year has been kind of fully realizing the wins from 2017 and then picking up a couple of smaller wins. But we did that on purpose so we we made a decision last year to to focus on some smaller more complimentary tuck in type business geographically complimentary to what we're doing with the larger systems. And the idea was you know we had really almost 400 percent growth from 2016 to 2000 into 2017. From a resource perspective. So we added you know a hundred and twenty employees. We built out processes that would work for 40 employees but not for 118. What he said you know so we determined that now is the time to press pause and rebuild the foundation out again relook at all of our systems again so that we can kind of double again. So that's basically the place we're at right now as the back office the functional areas the software scaling all of those things have been relooked at reachable is necessary to allow us to go from kind of 10 to that next level you know 25 million 30 million or so
: Right. So having the capacity to deliver the services that you or your clients want.
: Yeah and a lot and a lot of really key hires you know you were very flat from an organization perspective that at 40 employees. Not a lot of layers. Not a lot of a lot of people wearing a lot of hats. Now as we've grown and spread out a little bit geographically and you know from a headcount perspective a lot of a lot of my relief is being able to peel off those hats and hand them to the people that are experts in those areas. You know moving from hey I can do that thing too. Hey I'm an expert of that thing and that's really what's happened. This year we focus on that and 5 or six key members to our leadership team that are really focused on their functional areas as opposed to the overall
: Right now you talked a little bit about generating more business from your current clients. How does your team do that. How do you maximize the value that you're providing to your clients and in turn getting maximizing the amount of sales business is doing with them as well.
: So a vast majority of it is performance driven. So you know unlike many industries at the end of the day a hospital has to make the decision that's ultimately right for the patient. So if our efficiencies and understanding of the client allows our resources to be deployed more effectively then we are going to be the right answer more often. So we're the the you know the primary or first call in a contract situation. But if we're unable to perform to expectations. Obviously the facilities are going to call another provider. A lot of our growth is in how well we understand and then tweak our business to be the right answer more often. So whereas you may capture 90 percent of a contract opportunity in the first 90 days. Over time you're able to get better and move that from 90 to 92 93 in life. And we have metrics internally you know we have an expectation to capture you know greater than 95 percent
: Right. How often does it does the discover a new opportunity. That's a bit outside of your skill set or service set at this time. And then you say this looks like something that I can offer to all of our clients as well so we're going to invest and put this into our tool kit that we can offer to our clients. Hauff and does not occur.
: I mean for us that happens in many different areas so it can happen on the software side. For instance there's a tool that will help our clients have better visibility to their transferal or or the performance and many times we'll make those types of investments. And you know often that the clients visibility and transparency is very much a part of our you know our make up. And so a lot of those things are software related and just giving that transparency but also it could be as specific say especially a hospital has a specialty in a certain area that requires many trusts to invest in additional training or additional equipment to serve that that patient population. We may say okay that's now become a core competency we're able to deliver that in a particular market. Let's raise the baseline of our core competency and spread it out over all clients even if they don't specialize in it. Now we're able to offer a service or offer an expertise that that wouldn't typically be available so we for instance if there's a hospital that focuses on pediatric care we in that area that particular area are going to build a program that has specific training to that patient population and then we may take that pediatric program. It's been said let's spread it out over all of our footprint and offer to everybody
: Right. One last question for you Josh for the hospitals out there who are listening to this interview now who are interested in doing business with metrics. What's the best way for them to contact your team.
: You know I'll preface this a little bit. We we have a number of folks that are involved in that kind of conversation. From a clinical perspective from a straight business development type perspective. But you know I'd want someone to reach out directly to me. I know that's Leavenworth. KNOX But I'm very involved in the business and certainly can direct traffic if you will so my email is Josh not wots at Ryde med trust not com. So my email is probably a good first place to start and I'll certainly get someone to the right person to answer their questions.
: Fantastic. Thanks for joining us today Josh and sharing how you grow your company so fast.
: Thank you so much appreciate the time.
: We've been speaking with Josh Watts, the CEO and Co-Founder of MedTrust Medical Transport, about his company's rapid growth. For interviews with other fast growing companies or to learn how we can increase your firm's high ticket sales through automation, visit Eversprint.com.