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New England O and P Systems Company Grows through Co-Ownership
By Mary Bach Fleming 
Would all of you O&P practice owners harassed by
qualified practitioners beating down your doors please raise your
hand? If thats not a problem at your company, you may be
interested in a strategy used by New England Orthotic and
Prosthetic Systems LLC (NEOPS), a relatively new player in the
O&P field. The key is co-ownership, and its more than sharing
profits.
Would all of you O&P practice owners harassed by qualified
practitioners beating down your doors please raise your hand?
If thats not a problem at your company, you may be interested in a
strategy used by New England Orthotic and Prosthetic Systems LLC
(NEOPS), a relatively new player in the O&P field. The key is
co-ownership, and its more than sharing profits.
The Connecticut-based company also provides attractive salaries,
generous health coverage (about 100 percent of family coverage),
equal gender opportunities, and the usual slate of professional
staff benefits. But it seems sharing profits from the onset is what
attracts ambitious and talented practitioners to this five-year-old
firm. Managing partner Ron Manganiello couldn't be happier.
"We currently have a waiting list of ABC [American Board for
Certification in Orthotics & Prosthetics] -certified
practitioners who are applying to join our company. From Day One, a
co-owner holds 20 percent ownership and gets 20 percent of the
branch's net pre-tax profits. That's in addition to salary and all
the other benefits," he related.
A businessman whose expertise is finance, Manganiello started
NEOPS in 1998 with investment partners New Canaan Capital and Pat
Donnelly, CPO. He and Donnelly opened the first facility in
Branford, Connecticut, with Donnelly owning 20 percent of the
company. There are 16 branches now.
"As we started to grow, we'd open a new branch with a certified
practitioner as a managing partner owning 20 percent of that
branch," Manganiello explained. "They don't buy in' as
investors--we give them the 20 percent. Nor do we have
profit-sharing in lieu of salary--it's in addition to salary and
the other perks.
"In the last five years, we've only had to terminate one
partner/manager, and one left for health reasons," Manganiello
said. "This has been a very good model which works equally well for
the practitioners and for the company.
"For one thing, it retains good practitioners and keeps them
involved in the success of their branch," Manganiello continued.
"For a practitioner to be named as partner/manager' on a business
card not only strokes the person's ego, but it's also good for
marketing. When the practitioner is dealing with referral or
reimbursement sources, it tells the person on the other side of the
desk that this practitioner is someone of consequence who has the
ability to make decisions."
Keeping the Reins Loose
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Labs are clean, well-organized, and efficient. |
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Another fundamental NEOPS policy is maintaining a
loose rein. "There is no noncompete agreement in our organization,"
Manganiello stressed. "We feel if someone's not happy working for
us, we don't want them to stay. Different people perform better in
various working environments, and we appreciate that. Some
practitioners don't want any administrative responsibility at all.
We tend to attract those of a more entrepreneurial nature.
"We retain people by keeping them happy. And we do that
essentially in two ways: we treat them very well, and we give them
a stake in the business.
"In today's economy, starting your own O&P practice is
extremely difficult because of the need to have insurance
contracts, among other things. I'm not saying that's a good
thing--but it is a reality. Instead, we give our partner/managers a
part of the business. The result is we have virtually no turnover
among our owner/managers. And now, since word has spread about us,
we're getting more and more resumes from qualified people who want
to join the company," he added happily.
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Peter DiPaulo, CPO, is partner/manager in NEOP’s Hamden, Connecticut, facility. |
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New England Orthotic and Prosthetic Systems consists of 16
offices in four states: seven in Connecticut, five in New York,
three in Massachusetts, and one in New Hampshire. Expansion is
generally based on either of two situations. NEOPS identifies an
area contiguous to an existing location; feedback is then collected
from referral sources who often have offices or practice in
hospitals in the secondary area. If there is agreement that the new
location would generate sufficient work and be a convenience for
doctors and therapists, the groundwork begins for a new branch.
In the second scenario, an established practitioner approaches
NEOPS about opening a branch at a particular location where the
practitioner already has a following.
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Shelley Sherbondy, CO, is partner/manager in the Hamden office, along with Peter DiPaulo, CPO. |
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"We have not solicited one practitioner to join our company, nor
have we advertised," the administrative partner emphasized. "They
have all found us via word of mouth. And we presently have a
backlog of qualified people waiting for an opening."
Under the NEOPS organization, each branch has a certified
prosthetist, orthotist, or CPO as a partner/manager. Four are
headed by men, five by women, and five have co-partners who share
ownership and administrative responsibility. One small branch
specializes in compression therapy and is managed by a woman who is
a certified compression therapist.
Women Prominent in Organization
About 40 percent of branch owner/managers are women, and in
cases in which ownership is shared, four out of five branches
feature male/female practitioner duos.
"I'm not sure why this happens. It certainly wasn't by
intent--but it tends to work out exceptionally well. They seem to
be our best branches," Manganiello noted. "Maybe it's because every
patient has the option of being seen by a practitioner of the same
sex. At any rate, we do have quite a high percentage of female
practitioners compared to the industry as a whole. In fact, our
corporate staff consists of two women among the three
highest-ranking positions."
Success and Growth Factors
As to how he accounts for his enterprise's success and growth
within five years, he responded, "We have all the advantages of a
big company in terms of access to capital, buying strategies,
sophisticated computer management information systems and
communications, and insurance contracts. But we function more like
a series of small businesses, with co-owners having a vested
interest and a genuine participation. Some of the branches also
have staff practitioners who either prefer that arrangement or
they're waiting for a new branch to open."
Another policy is that each facility handles its own
fabrication. "I agonized over having a central fabrication system
for years," Manganiello admitted. "But then we agreed that it's
very difficult to make central fab truly work. It's almost
impossible to do fabrication a little differently for each
practitioner. So we don't do it that way. We let our practitioners
control how they want their prostheses or orthoses finished."
Another success factor, Manganiello feels, is the attractive,
patient-friendly design and ambiance at the facilities. "Every
facility is newly built, and each branch manager has been involved
in the design of his or her own facility," he said. The décor
features bright colors, attractive plants, and interesting fish
tanks. Small kitchens are available to patients as well as
staff--so a patient can get a cup of coffee while waiting. A
patient hospitality room with a television, computer, and a
comfortable couch make often lengthy visits for casting and fitting
easier. There are no glass walls separating the waiting room from
the office/receptionist area; everything is open. The warm,
attractive environment may also be a factor in attracting NEOPS'
large percentage of women practitioners, Manganiello noted.
Although he isn't a practitioner, Manganiello gained his
knowledge of the field after acquiring the former J.E. Hanger Inc.,
Washington, DC, in 1985. He added Capitol Orthopedic in 1987 and
took the company public, continuing with acquisitions from 1987
through 1995. Today, he and former colleague Ivan Sabel, CPO,
chairman and CEO of Hanger Orthopedic Group, remain good
friends.
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Waiting rooms are designed to be inviting and patient-friendly. |
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As to NEOPS' further growth, Manganiello dropped his jocular
tone and said earnestly, "I know every employee in this
company--there's about 60. I know them on a first-name basis; I
know their families, their life history. They all have my home
phone number; they've been entertained at my home.
"I will stop the growth when it gets to the point that I don't
know them this well any more--when we have to hire middle
management. I think middle management can ruin a company.
"This company is really a lot of fun for us. I don't ever want
it to not be fun any more." Mary Bach Fleming is the lead writer and manager of editorial services at Ron Sonntag Public Relations, Milwaukee, Wisconsin. A graduate of Marquette University College of Journalism, she has been a newspaper writer, columnist, editor, and acute-care hosp 
Table Of Contents - December 2003
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