Kevin Larson looks at the coming year and sees potential.

In late September, his company, the Billings-based health care service provider EBMS, joined with Water Street Healthcare Partners to expand the reach of EBMS nationwide. 

"We're gearing up to go national," Larson said. "We're positioning for transformational growth." 

Larson is company president, and bringing on Water Street was an inevitable step forward, but also a step into the dark. EBMS, which started as a mom-and-pop operation in Billings in 1980, has never worked with an outside partner before. Water Street, a private equity investment firm, partners exclusively with health care service providers and will provide cash and strategic planning for EBMS.

Water Street's experience is what made the investment firm so attractive to EBMS, Larson said. It will help EBMS improve the quality, cost and experience of health care for its customers, he said.

EBMS began as Employee Benefit Management Services Inc., launched by Larson's parents, Rick and Nicki Larson, who had the idea in the late 1970s to set up self-funded health benefit plans for employers and serve as a third-party administrator of those plans.

Since then, the company has steadily grown to 325 employees — 260 of them in Billings — across 13 states. EBMS works with companies in 16 states, including Alaska and much of the Mountain West. 

Along with the third-party administration services it offers, EBMS also manages miCare healthcare clinics, which serve the employees of those self-insured companies; and miRx, pharmaceutical distribution centers that supply the medications for the clinics. 

Setting up the miRx pharmaceutical distribution centers allows EBMS to buy medicine wholesale, which helps keep costs down for the patients visiting the miCare clinics. That, in turn, keeps healthcare costs down for those companies that self-insure. 

"We've created a better mousetrap," Larson said. 

Last year, Larson and the executive team at EBMS looked at the company's future, months and years down the road. They talked about what they thought the company should look like and where it should go. They discussed whether they'd need help getting there. 

"We saw a lot of opportunity," said Melissa Lyon, EBMS executive vice president of human resources.  

They knew the company would need massive upgrades to their technology systems if they were to grow, reach more customers and better serve the companies they already support. That carried a hefty price tag. 

That opened the door to discussions about bringing on an investment firm to help carry the costs of technology improvements and company expansion. They were eventually put in contact with Water Street, which was impressed by what EBMS had built. 

The company "is known for its history of innovation," said Max Mishkin, principal at Water Street. "And (for) going above and beyond to serve its clients."

"We are very progressive," Larson said. "We're on the leading edge of this industry." 

It was a good sign for officials at Water Street. 

Steve Cosler, a Water Street operating partner, will serve on the board of directors along with EBMS’ founder, Rick Larson.

The goal is to boost EBMS to operate on a national level. The company had a strong year in 2017 and has set targets for 20 percent growth for the next several years.

"I think it's very realistic," he said. "2018 is going to be a telling year for us."

One of the big challenges for the company will be attracting the right talent.

"As we grow, we'll need more managers, IT techs, sales people and entry-level personnel," Lyon said. 

With its technology upgrades, EBMS recently hired James Vertino as its chief information officer. Before joining the company in Billings, Vertino was the CIO of HealthPlan Services, a support services company for insurance groups in Tampa, Florida.

EBMS is now searching for a top-level chief financial officer who will be capable of helping shepherd the company's growth to a national player.

"Every employer has this challenge," Lyon said. "Finding good talent."

As EBMS plots and plans its rapid growth, Larson is confident his company will keep its balance and bring on the right people to help it. And he knows Water Street will give him the room to do it and the guidance to help. 

"They're not operators, they're an investment firm," he said. 

Water Street has no plans to take over the company or make the big decisions — it's not what they do, Larson said.

He pointed out that it was EBMS' success that attracted Water Street and led it to invest in his company. 

"They want to let us do our thing," Larson said. 

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