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Ties that bind Featured

5:26am EDT November 2, 2005
It’s all about the relationships for Charley Falcone.

And for Devon Health Services Inc., the King of Prussia-based preferred provider organization, those bonds have meant double-digit revenue and profitable growth over the last five years.

Falcone, now its president, oversaw much of that success as the company’s COO during its growth spurt. The growth has come, says Falcone, by leveraging the relationships the 130-employee company has with its medical providers and with its payer clients, the insurance companies, labor unions and employers that use its provider networks.

“For me, the big focuses are making sure that our relationships with our clients are always in good shape, especially the big guys, and keeping in tune with what’s going on in the market,” he says.

For Falcone, that often means coming up with new approaches to cutting costs and improving delivery of health care services, ideas whose inspiration usually comes out of the problems that his clients face.

“That’s the focus of my job, making sure that we don’t miss those opportunities, that we’re not asleep at the switch,” he says.

By staying in front of clients and listening to them before trying to sell them, Falcone has been able to engineer some innovative approaches to reducing costs for payers and providers and increasing cash flow to doctors by providing novel income streams. And while doing so, the company has been expanding its geographic reach — it enjoys a national presence, yet remains in close touch with its customers.

Falcone talked to Smart Business about how his company stays in front of clients, feels their pain and relieves it with smart solutions.

How has Devon Health Services sustained double-digit growth and profitability over the past five years?
Relationships. We deliver what we promise we’re going to deliver. When we go in and say we’re going to do something, we do it, and we deliver it right. We provide the right customer service and the right follow-up.

It’s not a case where we promise something and we can’t get it done. If we commit to doing the project, we’re going to do it, even if it means it’s not going to be the best benefit for us. Because of that, we’ve developed relationships with some of the biggest payers in the country.

So what made us, over that last five years, achieve this double-digit growth? It was really understanding the relationships we had and tapping into those relationships to put the right products and services in front of the people we know.

What that meant was getting our team together, the key people, the people that were in front of our key clients as well as internally, the people that understood the processes and the things we were doing, and making sure that we could deliver the right products and services to the people that needed them, a group effort to put the right things on the street.

Do you get involved directly with clients or is your role essentially one of interfacing with them through your staff?
Really a combination. Since the beginning, and even today, I do maintain relationships with our clients, especially the bigger ones, and I plan to continue that.

That’s the key to our growth, to make sure our clients are satisfied, and again, understanding what their needs are because, in the health care environment today, the needs are changing rapidly, and we want to be aware of what’s going on.

How do you maintain those close relationships with clients as the company grows?
For us, we always have that group of key clients. Today, we have over 500 clients on our list. They’re called payers to us, and that list has grown substantially.

Obviously, it would be next to impossible to maintain a relationship with every single one of those, but communicating to our salespeople and our client relationship people and understanding what’s going on with them is key. So even though you don’t have a direct link to each one, through the people in our organization, we can understand the needs of each one and the relationship we have with them.

One thing we did — this is going to be probably five or six years ago — we created a new process whose exclusive purpose was to interact with our clients. So before that, where it was just the salesperson who sold the case and maintained the case, the new group was designed to be in front of the client every day or whenever the client needed us to be.

And that group maintains relationships with clients at all levels, from the people at the top down to the day-to-day people so we understand what’s going on. Those groups, the client service groups as well as the sales group, have regular meetings and discussions about our clients so we understand at all times what’s going on.

Twice a month we have our sales meetings, which incorporate those departments. We talk about existing clients as well as new prospects and where we’re going with future products. We do some other things to stay in front of clients. On the anniversary of every client’s contract, depending on how big a client they are, we send lunch to their staff for the day, send something to their office, bring them bagels, whatever it may be.

It’s not something we send to one person but to the whole group that we work with at that client’s office. We get great feedback from that. We also maintain a list of our top clients and we want to make sure we go to lunch with them or dinner with them so we make sure we’re staying in front of them, communicating with them at all times.

Those kinds of programs are keeping me and our key sales group and our client service people in front of our clients and understanding their needs so that we, as a company, can react when we need to make changes.

How have some of the less traditional approaches you’ve taken helped to build the business?
One of the reasons for rapid growth was partnering with other entities in other regions to expand to a national presence. Historically, our footprint was the Mid-Atlantic region, but our clients wanted us to help them in other geographic areas.

So we went out and created relationships to provide services in those other areas. That’s one of the pieces that’s helped us grow, as well as stay on the cutting edge of new products.

We can provide a client with access to networks and products anywhere in the country. But outside of that, we’ve developed new programs directed at payers as well as health care providers to keep us thriving as an organization.

What are some of the programs you initiated that have fostered growth, and how did you develop them?
It all goes back to having the relationships ... so that they’re going to communicate to us their needs and what’s going on with them. That’s what allows us to go into them with products and services that are going to help them save money.

What do the products and services look like? Well, one example is we had a client that was using our network and our geography here in Pennsylvania. However, they had members in other states where they weren’t satisfied with the networks that they were using.

We put a program in place where we wanted to get discounts on 100 percent of their utilization, which meant getting their in-network utilization up, building a network for them wherever we could, making sure they were getting the discounts with the doctors they were going to.

We then negotiated when there were out-of-network claims, so they never paid retail. We’ve implemented it with other groups and we’re still implementing it today, and we’ve having very good success with it.

What kinds of programs have come out of your relationships with providers?
On the provider side, we have a terrific program where we have point-of-care marketing for pharmaceutical companies or any entity that has an interest in marketing their products to patients and physicians. It happens to be a great fit for pharmaceuticals because it encourages patient-physician dialogue about new drugs, new treatments, etc.

The program’s called supply marketing. The original concept was exam table paper. You go into a physician’s office, you see a plain white piece of paper on the exam table.

Well, we saw that as a billboard. We went out and talked to some of our pharmaceutical clients who agreed that they wanted to put their brand on that billboard. So the pharmaceutical company would buy the paper and we would give it to the doctors.

How to reach: Devon Health Services Inc., www.devonhealth.com