“You have to be an eternal optimist to be in this
business,” proclaims California provider Cliff Woolard. And
he is. Despite reimbursement reductions galore, the possibility of
a 13-month oxygen cap on the table and competitive bidding to deal
with, he says, “the demand for our product has never been
greater.”
But even optimists take out insurance, and that's exactly what
Woolard says he has done. After 15 years as a traditional provider,
he has opened a retail store, “and I'm kicking myself for not
doing it sooner,” he says.
“On the traditional HME side we are told what to provide,
where to provide it and how to provide it. The idea of going into
retail is almost like taking out a life insurance policy on your
traditional HME business. It allows you more freedom to help people
with what they really want — and they are paying
cash.”
Not only that, a few weeks after opening, the new store was
breaking even based completely on walk-in business from a sign.
Woolard thinks business will be even better when he starts
advertising.
I'm not saying — and Cliff Woolard certainly isn't —
that every provider's entry into retail would be as successful.
Woolard planned for a year, took six months to find exactly the
right location and got help from consultants. Then there was the
not-so-little matter of devising a totally different business
model, one based on consumers and cash instead of referral
customers and reimbursement. Ordering is different. Inventory is
different. Vendors may be different. And there's an especially big
learning curve when it comes to real estate.
The upside of the effort, however, can be huge, and rethinking
Medicare business is something that most providers must be doing in
a huge way as the government reshapes this industry.
“There are a lot of people out there willing to pay a fair
price for the products they need, and that's a side of the business
we haven't seen,” Woolard says. “I still feel the other
side of HME is a viable source of business — we're coming off
our best year — but this retail is a whole other thing. We've
got people who are willing to pay money for something they need if
their insurance doesn't cover it.
“It's exciting,” he continues. “I've
personally worked the showroom since it opened, and most people buy
more than what they came in for. People don't think that with beds
there are a lot of accessories they need, like sheeting, pillows,
wedges, tables, support rails. And there are lift chairs and the
whole bath area and everything else that's available in the market
to show them. They really like the fact that someone is there to
help them.”
I've related this conversation because each year when
HomeCare takes an account of the state of retail in HME,
results show the amount of business that retail sales represent
hasn't budged, averaging less than 15 percent of the typical
provider's revenues.
So, instead of hearing about its promise from me again, I hope
you'll consider what Cliff Woolard has to say about expanding into
retail: “It's excellent. It's unbelievable. It's
instantaneous. It's in the bank the next morning, and I can use
that money to run the other part of the business.”
