How do companies get started?

[Giobobo1]

I hear alot of ambulance companies in the Bay Area are mom & pop shops, but my question is, how did they get their contracts and jobs if there were bigger fish in the sea. idk, it seems really impacted

 

[unleashedfury]

lowest bidder..

its still the pure fact of running business. Just like your local auto shop can do the same job that a dealership or chain store can do only cheaper.

A small mom and pop service has less operating costs, and overhead vs. lets say AMR, with less costs to run the business, I can low bid the competition and still make a profit. A bigger corporation doesn't want to drop the price too low that they lose money to keep a contract.

 

[akflightmedic]

lowest bidder..

its still the pure fact of running business. Just like your local auto shop can do the same job that a dealership or chain store can do only cheaper.

A small mom and pop service has less operating costs, and overhead vs. lets say AMR, with less costs to run the business, I can low bid the competition and still make a profit. A bigger corporation doesn't want to drop the price too low that they lose money to keep a contract.

Sorry but you are wrong.

A smaller business typically has MORE overhead and operating costs and therefore cannot compete with deep pocket companies such as AMR.

AMR WILL go VERY cheap and in some market areas they WILL take a loss or hope for break even. This is called a Loss Leader. Why would they do this? Because even at a loss, the company can carry this for a year or two (if needed), which means that is a year or two the Mom and Pop are not performing or earning. Eventually the M & P will be forced to either close its doors or sell out to AMR.

Either way, AMR wins and then they can adjust their prices as needed once the competition is no longer.

 

[medicdan]

Sorry but you are wrong.

A smaller business typically has MORE overhead and operating costs and therefore cannot compete with deep pocket companies such as AMR.

AMR WILL go VERY cheap and in some market areas they WILL take a loss or hope for break even. This is called a Loss Leader. Why would they do this? Because even at a loss, the company can carry this for a year or two (if needed), which means that is a year or two the Mom and Pop are not performing or earning. Eventually the M & P will be forced to either close its doors or sell out to AMR.

Either way, AMR wins and then they can adjust their prices as needed once the competition is no longer.

Large companies can also use economies of scale to negotiate better pricing on equipment and supplies, and unlike smaller services is too big to participate in shady or illegal practices; they can develop best practices nationally and carry them out everywhere.

http://theambulancechaser.com/2013/11/15/for-your-protection-really/

 

[lwems]

Here in Houston it's all payola.

SNF administrators have become utterly brazen, asking out loud (in a private meeting in their office) what their cut will be. Or demanding free wheelchair mileage even though that is specifically illegal (anti-kickback statute).

One local small EMS provider signed a discharge contract with a local hospital for $100 per stretcher call. That is significantly below Medicare's explicit legal minimum, and so it constitutes an illegal kickback. We tried to explain this to the hospital administrator, and she didn't care. She figured the fraud/risk was on the EMS company making the offer, not on her for signing. She let us know the contract was ours if we beat their illegally low price.

You can also score a contract if you buy off the DON. Lots of DONs have got their boss (SNF administrator) on the defensive, due to a threat of blackmail or walkout. So the DON calls the shots on the floor. She directs her nurses to use whatever EMS company she wants... and her choice is for sale. EMS company then rips off the SNF in order to kick back to the DON, and the SNF's owners take a bath.

I hate it here.

 

[lwems]

Large companies can also use economies of scale to negotiate better pricing on equipment and supplies, and unlike smaller services is too big to participate in shady or illegal practices; they can develop best practices nationally and carry them out everywhere.

You'd think that.

And then there's Acadian.

 

[lwems]

Sorry but you are wrong.

A smaller business typically has MORE overhead and operating costs and therefore cannot compete with deep pocket companies such as AMR.

AMR WILL go VERY cheap and in some market areas they WILL take a loss or hope for break even. This is called a Loss Leader. Why would they do this? Because even at a loss, the company can carry this for a year or two (if needed), which means that is a year or two the Mom and Pop are not performing or earning. Eventually the M & P will be forced to either close its doors or sell out to AMR.

Either way, AMR wins and then they can adjust their prices as needed once the competition is no longer.

Yep yep.

When loss-leaders are used to bankrupt all the smaller competition, it is called predatory pricing. In most circumstances that is illegal, but it's up to the feds to put a stop to it. Unfortunately our federal government suffers from regulatory capture, where the regulators are paid to look the other way... but that's a big boys' game that smaller ambulance companies can't afford to play.

If you are now thinking of Wal-mart putting local merchants out of business, that is not predatory pricing. Wal-mart does not -- as a whole -- sell below cost at any time. They've just got so much bargaining power over manufacturers that they can earn a profit on a retail price below what their competitors are paying wholesale.

 

[looker]

Company's usually get started in few ways. One of them being that you know someone in a facility and they can "refer" to you patients. Reality is you go to dialysis center and give a "gift" in return you are given patients. Eventually if the company's keep growing they will get known, win some contracts etc.