Interview: Michael DiMarco, CEO of The Outsource Group

insideARM.com recently had the chance to engage in a Q&A session with one of the industry executives leading the charge into healthcare accounts receivable management, Michael DiMarco. DiMarco is the CEO of healthcare collector The Outsource Group. We talked about his career and, of course, healthcare collections.

Q. How did you get started in the collection/ARM industry?

A. I was recruited to OSI in 1998 after they completed seven acquisitions that occurred between 1995 and 1998. OSI was essentially a holding company selling collection services under 14 different brands or distinct service lines. I was brought in to help them develop a go-to market strategy and create the operating and marketing infrastructure to support the strategy.

Q. What were your experiences as a Division President at OSI?

A. I learned a lot about the industry in a short period of time. Most notably: an acquisition strategy needs to be well thought out prior to embarking on it. OSI did not retain the owners of the acquired companies. This created a real void in tribal knowledge, culture, and relationships with key employees and clients. Second, the acquired companies were not always synergistic. We had too many unrelated lines of business and were spread wide across industry verticals. A more narrow focus on a few industry verticals could have resulted in the development of real expertise within a particular industry vertical. Lastly, there was too much reliance on cost synergy from the acquisitions and not enough focus on driving revenue and improving operational performance.

Q. What brought you from OSI to The Outsource Group?

A. Several things. I have always wanted the opportunity to create something on my own. I had spent most of my career running large, complex businesses where my focus was more strategic in nature and the ability to make a significant impact was limited by many factors that were outside of my control. I enjoy operations and sales, and preferred to get closer to those activities and also sought an environment where I could test the ideas and learnings I had gained over the years from my experiences with companies like OSI. As a result of the chapter 11 reorganization at OSI and the consequent dismantling of the management team, the timing was right. I partnered with a very good private equity firm for the purpose of building a leading healthcare receivables management company. We started by acquiring The Outsource Group and focusing on organic growth.