HME providers from coast to coast are feeling the pain of lower
reimbursements from Medicare and facing the prospect of even more
cuts with competitive bidding again on the horizon. The climate has
been tough on the scooter business, although shrinking margins have
not slowed the pace of innovation among manufacturers. These
suppliers see opportunities for HME providers in Advance
Beneficiary Notice (ABN) upgrades or cash sales to a growing, and
sometimes more affluent, baby boomer population.
“I'm somewhat jaded against Medicare reimbursements for
scooters,” says Mike Serhan, executive vice president, Drive
Medical Design and Manufacturing. “Medicare has made it very
difficult. It's not really as profitable, especially after all the
hurdles you have to go through.”
However, he adds, “The scooter market is going to grow one
way or another. If you restrict [your sales] to government
reimbursements, you are doing your business a disservice. If your
business is efficient, you might be able to make thin margins [from
Medicare], but it's very difficult.”
“Scooters have always been on the lower end of the
reimbursement scale, which will only be exacerbated by competitive
bidding,” agrees Cy Corgan, national sales director, Retail
Mobility, Pride Mobility Products. “This doesn't mean that
there won't be a market for scooters. In fact, the market should
expand greatly. The bottom line is that providers should stock a
basic version in each Group 1 code and add scooters to their
inventory based on clientele and market.”
Terry Preston, vice president of sales for Leisure-Lift, warns
against compromising quality to meet Medicare's low payment level
or to promote cash sales. “Low-margin products such as travel
scooters can overwhelm a dealer's service resources if it is a
poor-quality product. Return to quality is an avenue to overall
profitability if you consider the cost of servicing the product as
well. You may not be making enough margin on inexpensive products
to pay for the service costs.”
According to Les Brandeis, director of sales, Merits Health
Products, “it is up to the manufacturer to help design
scooters that can be sold in a retail environment. This would mean
more portable or travel-type scooters, which all of us make but
each one offers different features.
“At present, the market has enough of these. It will be up
to market trends to see how we will either redesign them or stay
the same. Manufacturers can help by offering a very competitive
scooter at a good market price.”
“Decreases in scooter reimbursement are making it
increasingly difficult for providers to be profitable on reimbursed
scooters, and this is driving down the market,” sums up John
Koster, product manager, Consumer Power Wheelchairs and Scooters,
Invacare Corp.
“On the bright side,” he continues, “the
increase in the aging population and number of retirees with
disposable income are having a positive effect on the cash-sale
side of the scooter market. Providers need to focus on attracting
cash-sale customers and growing the retail side of their scooter
business.”
Technology on the Rise
Indeed, manufacturers say, transportability seems to be one of
the most important features in scooter-buyers' minds. People want
to take their scooter to the mall or when they travel, so
manufacturers are continuing to work on ease of transport.
“Generally the market is trying to look at the consumer's
needs related to transportability and aesthetics,” says
Serhan. “Manufacturers are coming out with scooters that are
more visually appealing.”
There have also been advancements in technology, such as motors,
electronics, batteries and chargers, to improve the function,
performance and serviceability of manufacturers' products, notes
Corgan. “The result is that manufacturers can build in
features that were previously unavailable.” For example, he
points to the company's Go-Go Elite Traveller and Victory series
that are equipped with one-hand disassembly and lightweight,
low-profile non-scuffing wheels.
Merits' Brandeis sees scooters changing to more aerodynamic
styling. The company has also increased the speed offerings on its
models (ranging from 5 to 12 mph) to allow patients to travel
faster and farther, and weight capacities have increased to
accommodate the growing number of obese patients. Available
accessories include baskets, holders for oxygen tanks and canopies
to protect from the sun.
Scooter seats are getting larger and more comfortable to
accommodate users up to 300 pounds who want the comfort of a larger
scooter with the convenience of a travel scooter, says Koster of
Invacare.
Convenience features such as quick-adjust tiller positioning,
charger ports located in more accessible locations, sliding seats
for adjustable legroom and headlights and lighting packages are
becoming more popular, he adds.
Currently serving the market with a line of microportable
take-apart travel scooters and a compact three-wheel scooter, the
company is in the process of introducing a new and improved seat on
these models, and will increase the weight capacity of the
three-wheel scooter to 350 pounds. Invacare expects to launch new
mid-sized and large scooters this summer.
DuWayne Kramer, president of Leisure-Lift, says his company has
made multiple improvements to its products, including a better
turning radius on its Fusion model, making it easier to maneuver
indoors and more stable outdoors. The Fusion comes in models for
bariatric patients up to 500 pounds.
Kramer notes custom scooter options to meet specific customer
needs, including custom seating for bariatric patients and even
“stretch” scooters.
The built-in charger on the Fusion can be switched from 120 volt
AC to 220 volt AC for travel. Other features include built-in
diagnostics to help dealers solve service problems over the phone
(using audible error codes).
Another extra is the use of programmable controllers in an age
when many scooters are being “dumbed down,” Kramer
says. “People are trying to cut costs and going away from
those things, a trend that can cost the dealer money [related to
service],” he says.
“From a design standpoint, we operate under the philosophy
of continuous product improvement. We analyze warranty and
non-warranty repairs every month and have quick access to our
manufacturing center to make changes as needed,” says
Leisure-Lift's Preston.
“Wherever a product is made, you have to have the right
quality control so that what's coming off the line is the right
product,” comments Drive Medical's Serhan. The company offers
a second stackable battery that can double the distance range of
its scooters. Being able to remove the battery using a
lunchbox-type handle simplifies recharging, as does a charging port
located up high on the scooter for less reaching, he says.
The use of common parts across a product line — for
instance in a travel scooter and a mid-range scooter — can
simplify service issues, as can the ability to program electronics.
“The cost difference among models is added features. The
motor on a travel scooter needs to be as reliable as a larger
scooter,” Serhan says.
Moving More Scooters
Providers should be creative with their direct marketing, and
they should focus on upselling their scooter customers as much as
possible, suggests Koster. Ideas such as bundling scooters with
lifts and/or ramps will get new customers in the door, and
upselling accessories along with every scooter sale will maximize
profitability, he adds.
Providers should make sure their staff is well-versed and
up-to-date on the procedure involved with an ABN, says Pride's
Corgan. “This knowledge makes it possible for clients to
upgrade their scooter purchases, obtain a scooter that is not
covered or obtain a specific scooter if medical necessity is not
met. This can generate additional revenue opportunities for the
provider.”
If they are not already, providers can also reward staff for
selling the most profitable products in each category and for sales
bump-ups or package sales that include a lift or ramp, he
suggests.
“When someone walks through the door, make them feel they
came to the right place,” advises Serhan. “Don't carry
just one brand. Have a broad choice of product offerings, both in
terms of type of scooters and of manufacturers. If you show up to
buy a car, you don't want there to be just one car in the
showroom.
“For a typical brick-and-mortar provider, I believe it is
good to have both a showroom and a presence on the Web, if for no
other reasons than to educate the customer about your
product,” he adds. “Make someone comfortable with the
scooter. It's new to pretty much everyone. Make your customer
comfortable with the [scooter's] purpose.”
“Dealers are finding a more educated population of
patients, asking better questions,” notes Preston. “The
dealers who provide better education, personal assistance and
higher quality over time will succeed.
“Patients are looking for the best quality they can get
for the dollar. They are learning that some of the low-cost
products won't meet their needs. It is important to pay attention
to the patient's needs and match them to the right
product.”
Providers must be educated as well, Kramer says. “The
dealer has to be able to explain to people why this is a better
product after listening to their needs.”
Experts Interviewed
DuWayne Kramer, president, and Terry Preston, vice president of
sales, Leisure-Lift, a div. of Burke Inc., Kansas City, Kan.; Mike
Serhan, executive vice president, Drive Medical Design and
Manufacturing, Port Washington, N.Y.; Les Brandeis, director of
sales, Merits Health Products, Cape Coral, Fla.; John Koster,
product manager, Consumer Power Wheelchairs and Scooters, Invacare
Corp., Elyria, Ohio; Cy Corgan, national sales director, Retail
Mobility, Pride Mobility Products, Exeter, Pa.
