Founders

Jack Tighe of TMG Health Inc.

With his background as a trained pharmacist and years of experience working in state government, national healthcare organizations and for Independence Blue Cross’s Medicare and Medicaid businesses, Dunmore native Jack Tighe realized he had the wherewithal to start TMG Health Inc.

The company, founded in 1998, provides outsourcing services and information technology to insurance companies with Medicare and Medicaid plans. With its corporate headquarters in King of Prussia, a huge facility in the Scranton area, and offices in Pittsburgh and Amarillo, Texas, the company is set to expand even more with the coming of the Affordable Care Act.

Tighe, president and CEO of TMG Health Inc., resides in Merion, Montgomery County, but remembered the “great work ethic” of the people of northeastern Pennsylvania when it was time to find a location for the bulk of his company, which employs more than 1,200 people in the Scranton area alone.

What was the inspiration behind TMG Health Inc.?
I had a healthcare background; I went to pharmacist school. I never practiced a lot, but I worked for several national pharmaceutical associations, both on the retail side and on the manufacturing side, in Washington, D.C. I worked for Gov. Robert P. Casey as his deputy chief of staff, so I developed a lot of experience with government, working on healthcare issues like the Children’s Health Insurance Program.

I left there and went to Independence Blue Cross in Philadelphia, and ran their Medicare and Medicaid businesses for them, which they were in in a very minor way. We grew those businesses in 38 months to billion-dollar businesses.
At the time I was doing that, we were partnering with some other Blue Cross plans, providing administrative services for their Medicare and Medicaid programs, because there was a real lack of knowledge in the industry, on the insurance side, of how to deal with the government.

I thought there was a potential for a company that wouldn’t be owned by an insurance company, that could partner with insurance companies to bring them the expertise on how to run Medicare and Medicaid health plans.

The genesis of the idea was grounded in both my healthcare background and my interest in that area, and the fact that I was in government service and learned and understood how government worked. And I had the practical experience of growing the (Independence Blue Cross) businesses and having other Blue Cross plans asking for help.

After all that, I started thinking about creating such a company. After seven or eight months of hearing me talking about it, my wife said, “I’m sick of hearing about your good idea. Do something about it.”

I took a week off and created 50 overheads (projected images), and approached friends I knew in the venture capital business who had approached me over the years to run companies that I wasn’t interested in. They gave me an hour, and it turned into three, and I pretty much sold them on it in that one meeting. They thought it was a good idea.

How has the business grown over the years?
We had a small corporate office in Wayne, near Merion, where I still live. Several months into it, I purchased Walsh Associates, a company in northeastern Pennsylvania that was outsourcing work for various insurers, in a small building on James Avenue in Scranton. Then we moved to downtown Scranton, in the Scranton Enterprise Center. We added our Dunmore facility in 2005. We consolidated all of our facillities last year to a 150,000-square-foot building in Jessup, (Lackawanna County), in the Valley View Business Park.

We now have 1,200 to 1,300 employees there; about 150 employees in a call center in Amarillo, Texas; 25 employees in a technology center in Pittsburgh and about 30 employees in our corporate office in King of Prussia.

What resources did you take advantage of in launching your company?
The venture capital firm did the original funding. Along the way, around 2003, we received about $300,000 in funding from the Northeastern Pennsylvania Ben Franklin Partners for a technology initiative (to design, test and implement Health Insurance Portability and Accountability Act (HIPAA)-compliant software modules).

In 2005 we got Economic Opportunity and Economic Development loans from the state as we were expanding into the Dunmore facility. In 2011 we got additional money from the state to expand into our Jessup facility. . . We had a track record of creating jobs, so both the (Gov. Ed Rendell and Gov. Tom Corbett) administrations have been very supportive of what we’re doing.

Behind the scenes in all of this has been the Scranton Chamber of Commerce, which has helped with all these funding sources, and guided us along the way. . . They have been very good partners all along.

What was the biggest challenge you had to overcome?
We had really rapid growth. I think most people in business would think that’s a really good thing, but most of the people in private equity and other firms that fund companies will tell you that rapid growth has killed many good companies.
When you’re growing to two or three times your size every year—at one point we had 250 employees and were hiring 400 to 500—if you don’t have the administrative structure to handle that, it can be very challenging. Managing rapid growth has its own dynamics and difficulties. . . It can sink the company.

How did you handle that?
You have to be very focused, and I don’t panic. We had a plan; we were methodical and diligent about trying to work the plan, doing it one step at a time. There is no quick fix. If you have the right team and you’re all focused on the right issues, and you get some good advice from the funding sources and the board members who have seen various rapid-growth companies, you go through it day-to-day, dealing with mundane issues, keeping the ball rolling.

In retrospect, I would have spent a little more time and money on two areas in the beginning: training and development of our workforce, and human resources and recruitment.

What’s the differentiator for TMG Health Inc.?
One is our total focus on government programs. There’s no other single entity that has their complete focus on that exclusively, both from a technological and services standpoint. There are many companies that provide technology to support government programs. There are companies that will do pieces of the servicing of government programs. There are companies that do what we do in a comprehensive way, but as only one part of their business. I think what distinguishes us is that this is our only business.

The second is that we’re very compliant-centric. Our mission is to keep our clients in compliance.

The third thing is the expertise of our people. When we got started, most of the people we hired didn’t know Medicare from Medicaid. They grew their expertise with the company. I would say—and other people in the industry would support this—that we have some of the foremost experts in the country on running government health plans.

What’s next for your company?
At one time, commercial insurance companies didn’t want anything to do with government programs. Now they’re all coming our way . . . The government is more involved in private insurance today that they were last year or two years ago, and they’re going to be more involved than they are today five years from now.

So once the government does that, their rules, procedures and what they want to oversee in health insurance, private or semi-private, in the exchanges, will be the same as the Medicare and Medicaid programs of the last 15 years. We have a lot of opportunity for expansion, because we understand that. This is going to fuel growth for us.

The Affordable Care Act has expanded the Medicaid business, with more people eligible, creating dual-eligible plans for people who are covered by Medicare and Medicaid—the older poor people—and that’s fueling a lot of growth out there for us, too.