Searching for the Sizzle
Most providers and manufacturers hoping for sizzling sales in the beds and support surface market were disappointed in 2012. However, industry veterans quickly followed up their tepid assessments with a caveat: it could have been worse.
Al Flora, sales manager at Virginia-based SleepSafe Beds, opts to look at the bright side, citing “slow and steady growth” in a year that found many providers gearing up for reimbursement that will soon be governed by widespread competitive bidding rates. “We do hear about competitive bidding from DMEs that distribute our product,” acknowledges Flora. “It is hurting their profit, and it’s harder to make money now because of that.”
At Elyria, Ohio-based Invacare Corp., Phil Cunningham, business manager for HME and LTC beds, questions the business shift from rental beds to cap-out beds. Under the old model, he says, providers counted on getting rental beds back after six to eight months, at which point they could be cleaned up and put back out.
“There has been a shift among some of the competitive bidding winners,” explains Cunningham. “With bid amounts being low, they feel like it’s a matter of getting the bed out there and letting it reach the 13-month cap out. In the reduced reimbursement market, it is still going to be more profitable to do more rentals, but the provider will have to minimize service costs.
“The average length of Medicare rental didn’t change from 2010 to 2011, proving the cap-out model still has many unknowns,” Cunningham continues. “That patient is going to use that bed for the next five years. Warranties, repairs, customer satisfaction, patient safety and other factors will affect the overall cost of that product. These factors can impact the perception of the referral source, too.”