There are some things you shouldn't have to leave the house to get, Lincare Holdings believes oxygen therapy is one of them. The company helps some 800,000 patients with chronic obstructive pulmonary diseases (including emphysema and severe asthma) by providing oxygen therapy services through a network of offices. Lincare's local service centers deliver oxygen equipment to patients in their homes, trains them, and monitors use of the equipment. Lincare offers positive airway pressure (PAP) machines for sleep apnea, as well as other home medical equipment. It also provides home infusion, such as chemotherapy, pain therapy, and parenteral nutrition. Global gases firm Linde owns Lincare.
Change in Company Type
Linde, a Germany-based maker of industrial and medical gases that also provides engineering and logistics services, purchased Lincare for some $4.6 billion in mid-2012 to expand its medical home care and gas delivery operations. The purchase was conducted through an all-cash share tender offer. Lincare benefits from Linde's international presence and its extensive lineup of gas-based products and technologies.
Lincare serves more than 800,000 customers in 48 US states and in Canada through 1,108 operating centers.
Sales and Marketing
The company conducts its sales activities through sales representatives located at its local operating centers.
A series of changes to Medicare rules have lowered reimbursement rates for many of the company's services, including some inhalation drug therapies and oxygen equipment. Additionally, proposed health care reform laws will likely affect Lincare's operations (probably both positively and negatively) as a number of measures are being introduced that will expand Medicare, change the way it is reimbursed, and impose new restrictions to decrease fraud and abuse.
Lincare's oxygen and respiratory therapy services account for about 90% of the company's revenues and it derives more than half of its sales from Medicare and Medicaid reimbursements. The company's revenues grew by 11% in 2011 thanks to acquisitions and internal growth, offset by Medicare price reductions and payment changes.
The 2% decrease in net income in 2011 was due to a cut in operating income caused by Medicare payment changes and higher expenses attributable to the development of new product lines.
Despite those changes, the company has thus far managed to expand its customer base and geographic reach through selective acquisitions and internal growth. Lincare prefers to acquire smaller regional home respiratory service providers to enter into new markets and increase its market share in existing geographic markets.
In 2011 the company acquired the business of fifteen local and regional companies with operations in several US states and in Canada.
In 2010, Lincare made a larger-than-usual acquisition when it purchased the respiratory, infusion, and home medical equipment division of Gentiva Health Services for an undisclosed amount. The acquired business added about 40 agency locations in seven states. In total, Lincare acquired six businesses in 2010 with operations in multiple states.
Lincare also depends on referrals from physicians and hospital discharge planners to keep its business operating at full capacity. The company then supplies its referred patients with information regarding medical and insurance coverage and coordinates the delivery of care.
The company is a subsidiary of Linde North America Holdings Limited, which is a wholly owned subsidiary of Linde AG. – less