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HomeCare has published any number of articles on the
promise of retail in HME. I know, because I've either written or
contributed to a lot of them. So has Jack Evans, one of the
industry's recognized experts in the sector. We've done survey
after survey on the subject, and Jack has often analyzed the
results, laying out step-by-step how providers could use the
statistics to measure and improve their own retail sales.
This month, he does it again. In an article called “Profit
from Retail in HME” on page 12, Jack not only discusses the
secrets to some retail providers' success, he also reveals the
retail benchmarks that differentiate these companies from their
traditional HME competitors.
I believe wholeheartedly in the retail concept for medical
equipment. As a baby boomer, I've grown up at shopping malls simply
pulling out my wallet and buying whatever I wanted (within reason,
of course; I still don't have that villa in the south of France). I
intend to do the same thing when it comes to my wheelchair or my
cane. I'm with billing consultant Jane Bunch on this one. If I've
got the choice, just give me the one with the pink sparkles.
The thing is, although the future for retail HME seems unlimited
at this point — after all, there are a whole bunch of baby
boomers just like me who are ready to spend money on quality of
life and staying active — it's not without pitfalls. You've
got to offer customers the right merchandise at the right price in
the right place at the right time. And you've got to get all of
those things right all of the time. That's a pretty tall order.
Plus, it takes a good bit of fortitude to move into a totally
new business model with new products and new vendors, and away from
the reimbursement checks you've relied on, maybe for decades.
Courage is what California provider Mike Kuller says he summoned up
when he decided to take the retail plunge.
After recognizing that he was going to have to overhaul his
traditional HME, which he founded in 1999, Mike also realized that
with the Medicare changes coming down, an overhaul alone might not
be enough to keep him in business. So he came up with a plan for a
retail store, hired Jack to help, and you can read the rest of what
it took to get that plan from paper to brick-and-mortar in Mike's
“diary” on page 18.
Mike's is only one of the stories we're beginning to hear more
of about venturesome HME companies that are moving completely into
retail. With competitive bidding now snowballing down the hill, I
expect we'll hear more.
The point is, Medicare is not exactly into canes with
rhinestones, but plenty of customers like me might be. Medicare
is into delivering only basic products through fewer home
care providers who get paid less, when baby boomers want
convenience and service and quality equipment with bells and
whistles, and all of that costs more.
There's about to be a giant collision here, and its name is
competitive bidding.
It's not for every provider, but retail HME is an obvious path
that many in this industry can take to move out from under
Medicare's thumb and off the path of the coming train wreck. As
Mike Kuller notes about competitive bidding, “My retail store
now looks like a genius move. Who would have guessed 32 percent
cuts?”
