Brandy Baker / The Detroit News
Arcadia officials VP Lakshu Sundaram, from left, CEO/ Chairman John Elliott, and Larry Kuhnert and Cathy Sparling plan to offer a host of medical services.
Local spotlight
Southfield firm joins the health care field
By Eric Pope / Special to
The Detroit News
Arcadia Resources Inc.
• Projected annual revenues: $100 million
• Ticker symbol: ACDI (OTC)
• More information: www.arcadiaresourcesinc.com
SOUTHFIELD --Michigan natives John Elliott and Lawrence Kuhnert want
to provide home health care services on a national scale, and
they're using a Southfield-based staffing company, Arcadia Services
Inc., as the springboard.
Elliott and Kuhnert are
merger-and-acquisition specialists who had both owned health care
companies. Early last year they led a group of investors in the
acquisition of publicly traded Critical Home Care, a New York-based
durable medical equipment supplier with annual revenues of $5
million. Elliott is chairman and CEO, and Kuhnert is president.
Last May, they acquired Arcadia Services, which had
2003 revenues of $75 million in 21 states, and Arcadia RX, a mail
order pharmacy with revenues of $3 million. They moved the parent
company's corporate offices from New York to Southfield and changed
its name to Arcadia Resources Inc.
According to Elliott, combining prescription drugs and
medical equipment with home health care staffing is a unique
approach that should provide a competitive advantage. "Our whole
goal is to give people all they need to keep them out of the
hospital, assisted living or a nursing home," he said.
Another goal is to make Arcadia a household name in the
highly fragmented health care services industry.
Arcadia Services got its start in 1978 under another
name as a business staffing company. The nonmedical side of the
business has nine offices in southern Michigan and annual revenues
of $17 million.
Most of Arcadia's growth should come from
providing services to the country's elderly population, which is
expected to grow from 35 million to 79 million in 2030. The
private-duty home health care market that Arcadia specializes in is
projected to grow from $41 billion to $193 billion by then,
according to The Remington Report, a magazine covering the home care
industry.
Elliott expects existing operations to maintain
the recent growth rate of 18 percent a year while he and Kuhnert
aggressively pursue acquisitions, particularly in popular retirement
states like Florida and Arizona. During 2004 they acquired two
staffing and two medical equipment companies in Illinois, North
Carolina, Massachusetts and Florida.
All but five of Arcadia's 75 home health care
staffing offices are licensed to independent affiliates like Julie
Nye of Metrostaff in Lathrup Village, which provides health care
staffing for about 120 private clients and several hospitals and
nursing homes.
Arcadia handles payroll, billing, collections, employee
benefits and quality assurance for Metrostaff. "Being affiliated
with Arcadia allows us to concentrate on recruitment, placement and
client satisfaction," Nye said.
According to Nye, the new owners have made recruitment
and retention easier by beefing up the health and retirement
benefits program and opening it up to employees who work less than
30 hours a week. Many health care workers have part-time schedules,
and only 4,000 of Arcadia's total work force of 12,000 are working
at any one time.
The financial incentives for signing up patients
for Arcadia's prescription drug service or medical equipment also
will help with employee retention, according to Elliott.
Bringing Arcadia Resources to Michigan is a
homecoming of sorts for Elliott, who grew up in Detroit, and
Kuhnert, who grew up in Adrian, but they aren't moving back
themselves. They both live in Naples, Fla., where they will maintain
offices.
Eric Pope is a Metro Detroit free-lance writer.
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