LONGMONT, Colo. — It's been a year of change for Sunrise
Medical and more of the same likely lies ahead, according to
Thomas Rossnagel, the Longmont, Colo.-based company's new president
and CEO.
As HME manufacturers and providers attempt to navigate the
industry's treacherous waters and avoid running aground, some, like
Sunrise, are resetting their courses. Last year, Sunrise took a
hard look at its business, decided to focus on mobility and seating
and in November divested its U.S. and Canadian Guardian product
line (sold to Medline Industries). In May, the company announced it
was exiting the Group 2 wheelchair market to focus on complex
rehab.
And this month, Rossnagel took the
helm at Sunrise, succeeding Michael N. Cannizzaro (who will
continue as chairman of the board of directors).
So where does Sunrise go from here?
Rossnagel, who earned kudos for being an excellent strategist as
the senior vice president and managing director of Sunrise Europe,
sees some rough waters ahead, he told HomeCare Monday, but
he believes Sunrise is now in a better position to ride them
out.
Q: What are your goals for Sunrise in the coming
year?
Rossnagel: Sunrise is a dynamic company and
continuously improving what we are doing. I believe that change,
per se, is a good thing, if it is to the better. The recent changes
[at Sunrise], the divestiture of certain businesses and exiting
certain product lines, were predominantly geared around our U.S.
business. These activities help us become a more focused and more
profitable company in the U.S.
Our customers in the U.S., on a broad basis, applauded us for
this and have assured us of their continued support. You could say
that this speaks for itself. On that basis, we are confident to
become even stronger in the U.S. with regard to our core rehab
manual, rehab power and seating/positioning business.
Q: Can you talk about what the next level is for your
company?
Rossnagel: The future will show what else we
will have to do in order to grow further, both top-line and
profit-wise. In the U.S., the market has followed all the changes
our U.S. commercial team ... has implemented, and we are feeling
the increasing trust of our customers in what we do on an almost
daily basis.
In other parts of the world, we are very successfully competing
in certain areas that we have decided to exit in the U.S. In fact,
in Europe, we are very successfully competing in product lines we
have never been able to compete in within the U.S., such as
scooters.
We are thinking globally, but executing on a regional basis.
Sunrise's expectation cannot be anything less than to be within the
top three competitors in all the segments we are competing in,
worldwide. The regional strategies that lead to this goal can vary,
and there is nothing wrong with this, in my opinion.
Q: How do you think the home medical equipment industry
will evolve over the next year?
Rossnagel: The future of the HME industry is
very difficult to predict. A lot of things speak to the fact that
there needs to be consolidation, especially when considering the
overcapacity in our industry.
However, this is something that has been discussed many times
over since I joined the industry segment over 13 years ago and, in
reality, it has not really happened yet on a true, broad scale.
Hence, I assume that in the near- to mid-term, it will be about
staying very innovative and competitive to cope with the challenges
on hand and ahead, while always keeping an eye on the consolidation
opportunities that may arise.
I am optimistic that the leaders of this industry, be they
manufacturers, dealer customers, institutions,
reimbursement/funding organizations or others, will find ways to
cope with the dynamics of this environment. This is our
responsibility to our patients and end-users as well as our
associates and the shareholders/financial sponsors. This change
likely will be painful.
We are missing the influence that other industry segments enjoy,
which helps them maintain and, in some cases, even increase their
relevant funding pools. Having said this, I do appreciate that no
reimbursement system on this globe is able to spend money it
doesn't have available to them, but if you look at how many
wheelchair-users are underprovided with regard to the product they
get funding for, this is concerning to me.
The overall cost to the health care system on an ongoing basis
to address the consequences far exceeds the "savings" that have
been realized on the individual product. I am not criticizing the
reimbursement systems for this, but do believe that our government
leaders worldwide should rethink the funding approach and develop a
transparent methodology that fosters more of an integrated approach
while looking at the "total cost of ownership" more than the
"purchase price."
This will take time, but I am confident we will get there
because we have to. Societies and governments, in my opinion,
should take care of their people as one of their prime duties.
Sustainability is an important piece of this. We need to especially
treat the elderly population, who need medical aids, with the
respect they deserve, recognizing their lifetime contribution. Each
of us should be aware that something could happen to us any day
that could change our lives and make us reliant on the meaningful
provision of a medical device.
