Medtrade Keynote: We Will Survive

ATLANTA — No, that’s not a line from disco queen Gloria
Gaynor, whose hit “I Will Survive” topped the charts exactly 30
years ago in 1979, the same year Medtrade put on its first show.
But the sentiment is just as heartfelt today, according to four HME
providers who have learned to adapt and thrive in spite of industry
conditions — and who intend to keep their companies viable
through various business strategies designed to produce additional
revenue.

With an audience of Medtrade attendees eager to do the same, the
quartet of savvy business executives at a keynote discussion titled
“Strategies for the Future” shared their insights on winning a bid
(or not), building on current product lines and diversifying into
retail.

Medtrade
2009 was held Oct.12-15 at the Georgia World Congress
Center.

Since the industry’s unstable conditions are likely to continue
at least for the immediate future, it’s imperative for providers to
have a backup plan, said John Geller, president of Medical Service
Co., Cleveland. The 59-year-old HME was a bid winner in Round 1 of
competitive bidding,
which was both the good news and the bad news, Geller said.

But the company had another strategy for maintaining profits
that management thought would shelter it from the Medicare bid no
matter how things turned out: They opened branches in
less-populated areas. That, however, may or may not work if the HHS
Secretary is given the authority to expand the bid nationwide
— perhaps without a Round 2 — or to apply bid pricing
to all areas, Geller said. A statement to that effect is included
in the Senate Finance Committee’s health care reform bill, which
was passed by the committee last week.

Nevertheless, Geller said, there are a lot of other ways to
acquire patients, such as workers comp, hospice and home health
agencies. By focusing on areas that will remain profitable, so can
your company, he said. However, he advised, providers must “plan
strategically. Make sure there’s a Plan A, make sure there’s a Plan
B and then … follow it up with a Plan C.”

Robert Steedley, president of Barnes Healthcare Services,
Valdosta, Ga., advised providers to get on board with change. “Our
company starts with one premise: As a home care company, we can do
many things well. There is not a reason why you cannot do many
things and be great at many things. That attitude is very important
because it removes all the barriers that prevent us from evolving
and changing.”

In the case of Barnes, which has 20 locations in Georgia,
Florida and Alabama, Steedley said, the company used a systematic
approach to investigate and enter negative pressure wound therapy.
Now, Steedley said, NWPT is paying off as those patients are also
bringing in additional sales of beds, support surfaces, wheelchairs
and bath aids, “and we continue to grow that business.”

“You’ve come to the right place,” he advised Medtrade attendees.
“You have the opportunity over the next few days to walk through
the booths at the show with a purpose: Go and look for partners,
for products, for services that are appropriate for your customers
… and believe that you can do it.”

According to Tim Pederson, CEO of WestMed Rehab, Rapid City,
S.D., “I think we are six months away from seeing what the ‘new
normal’ will be for respiratory care, so we are focusing on the
more stable elements of our business.”

For WestMed, that’s complex rehab. “If you’re already in complex
rehab,” Pederson said, “it’s a logical extension of your business
because the business model is very similar.”

It’s not an easy market to enter, he said, noting that it takes
capital and patience in addition to creating a lab to produce the
products. But after several years, Pederson said, “Now we have a
strong presence in our market providing O&P, and it is the
perfect complement to our complex rehab business.”

Added Pederson, “We’re in a war of attrition in this industry,”
and those companies that can find ways to bring in new business
will be the companies that are left standing whenever the “new
normal” arrives.

Provider Randy Wolfe, president of Lambert’s Health Care,
Knoxville, Tenn., reminded the audience there is HME business that
has nothing to do with Medicare.

“Thirty thousand baby boomers turned 60 just since I’ve been at
Medtrade,” he said, and those boomers are “crazy spenders” willing
to pay for products. In fact, he said, consumers are spending $256
billion out-of-pocket for HME, and that number is only going to
grow.

“The long term is looking good,” Wolfe said, but in the
meantime, “we have some work to do.” Retail business, he said, is
one way to weather the current uncertainty. “If you’re tired of
your quarterly pay cuts from Medicare and insurance companies,
retail could be for you.”