BGC Helps Kevin Ralofsky Create an “Industry of Self” Case Studies
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Although it’s easy to forget when we’re sitting on the exam table, medicine is a business. Without enormous amounts of capital flowing between researchers, suppliers, and deliverers of care, our entire medical system would collapse. Just ask Kevin Ralofsky, CEO of MedCapital, Inc., a medical consulting firm in Sandusky, Ohio. He sees medicine from the “money side”.
In 2005 Ralofsky, formerly a corporate banker, was running MedCapital in addition to an urgent care facility he had founded three years earlier. When the care facility faced a looming crisis, he faced a personal one. Did he want to continue in health care, or return to banking?
Kevin Ralofsky is an MBA, not an MD, and his path into the medical industry has been non-traditional. He helps hospitals; multi-specialty medical groups, medical supply companies, private practitioners, and other companies in the medical industry obtain capital in order to provide the rest of us with quality health care. In addition, Ralofsky provides consulting for start up ventures, growth, cost-control and profit maximization for the medical industry.
As a banker for eight years, Ralofsky saw the challenges his for-profit medical clients faced in an area in which “life or death” isn’t just a cliché. When a client asked him to oversee a merger of 2 medical groups and secure some capital for the newly formed company, Ralofsky spent a “working vacation” away from the bank. A consulting firm was born. “It snowballed,” he recalled. “Suddenly I had companies and doctors calling, and I didn’t have time for everything.” Taking the giant leap from banker to business owner, Ralofsky founded MedCapital, Inc. in 2000.
Two years later he opened Twinsburg Urgent Care, an independent facility in an underserved market. In partnership with a physician, Ralofsky designed TUC as a freestanding provider of primary and urgent care services, industrial medicine, and diagnostic services such as X-ray. TUC enjoyed rapid success and caught the attention of an industry superstar—The Cleveland Clinic Foundation. “We had gained market share pretty quickly,” he said.
Within two years, both The Cleveland Clinic and University Hospitals of Cleveland announced plans to construct medical centers in … Twinsburg. Flattering, yes—but potentially fatal. Could a well-managed independent company survive? If not, what were Ralofsky’s options? Having spent time as the lone finance guy in a roomful of medical pros, he knew the importance of expertise. He hired a specialist in business growth—Andy Birol.
THE BGC SOLUTION:
Ralofsky needed to decide what to do with TUC, and he had to answer a sophisticated version of “What do you want to be when you grow up?” Did he belong in medical consulting, or was corporate banking his future?
Andy focused on the pressing question of what to do with TUC. “The Twinsburg market would be flooded within three years,” said Ralofsky, “so the window of time was small.” Andy helped him hammer out four potential options:
- Shut down.
- Reinvent TUC as a supplier and supporter of the CC and UH facilities.
- Offer the facility for sale.
Selling seemed the most attractive option, and The Cleveland Clinic had expressed a “casual” interest in TUC. In June 2005, Ralofsky hired a negotiator to iron out the details so he and Andy could focus on his next step. “He helped me figure out my Best and Highest Use, which went beyond my start in banking,” said Ralofsky. “It was almost like a series of counseling sessions. We discussed what I liked and didn’t like, what my strengths and weaknesses were, and some of the answers surprised me.”
The answers showed Ralofsky that he belonged in medical consulting. Andy saw great potential in MedCapital and, more importantly, in Kevin Ralofsky. “This is a guy with so much talent and experience in a critical field,” said Andy. “I thought he could take it nationwide” by focusing on MedCapital. “I had been trying to be all things to all people,” Ralofsky said, “but Andy helped me see what I do best in terms of helping companies acquire capital and work through their various problems in the medical industry. Now I know what my niche is, and I can manage the process confidently.”
“Andy has coached me into creating an industry of self,” said Ralofsky, noting—with humor—that the course hasn’t always been smooth. “The first time I met him I was surprised at how forthright he can be,” he laughed. “Andy doesn’t pull his own punches. He challenges you to do what it takes to get results, and you never know what he’ll say next.”
Twinsburg Urgent Care has become a property of The Cleveland Clinic Foundation (under the auspices of Southpoint Hospital) and Ralofksy, now focused on MedCapital full time, has gained clients throughout the country. “I speak at conferences for [such groups as] UCAOA, the Urgent Care Association of America, and NAFAC, the National Association for Ambulatory Care” he noted, “and Andy has helped me leverage these opportunities. As opposed to selling something, he showed me how to provide valuable information to an audience while at the same time being prepared to capitalize on their interest in what I do.”
What has this process been like for Ralofsky? “Andy says what he thinks, not what you think you want to hear. Owners look at their businesses through rose-colored glasses, but he makes you see all those places where there are blemishes. He made me face reality versus what I had thought was reality.”
Sound grueling? Actually, said Ralofsky, working with Andy is gratifying. “It never feels like work. It feels like business development,” he said, “and it’s fun.”
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