Pick Your Prophet

Ask a question of three home care providers and you will receive three different responses. At a least, that was the case when HomeCare queried Jim Binson, chief executive officer of Binson’s Home Health Care in Center Line Mich.; Todd Christopher, chairman and chief executive officer of Home Care Supply in Beaumont, Texas; and Joel Mills, president of Advanced Home Care in High Point, N.C., about their 2003 forecasts for the industry.

HomeCare: How would you characterize the upcoming year for the HME industry?

Jim Binson: Challenging and rough. A shaky economy, reduced reimbursement from state and federal programs, HIPAA, compliance [issues], lack of manufacturer support, competitive bidding, specialty providers, Wal-Mart and Walgreens entering our industry — all of these are equally challenging.

Todd Christopher: To paraphrase Dickens, it will be the best of times, and it will be the worst of times. By “best of times,” I refer to the demographics of the industry — the aging population — and to the fact that we are finding more efficient ways of taking care of patients. By “worst of times,” I refer to the possibility of reimbursement cuts due to inherent reasonableness.

Joel Mills: It is a year for us to get ready. With inherent reasonableness and competitive bidding looming, and with the question about whether the 15 percent cut in [reimbursement for] home health will occur, we [providers] need to be very aware of what it costs to provide our services.

HC: What is your prediction about national competitive bidding? Do you feel strongly that it will or will not happen?

Jim Binson: Competitive bidding is a foregone conclusion. I don’t know what the big problem is — we have been doing it for 20 years, whether with the Veterans Administration, BlueCross, the state of Michigan. Everybody is doing it.

Todd Christopher: Now that both houses of Congress are controlled by Republicans, NCB is inevitable.

Joel Mills: NCB will be a continued point of discussion on Capitol Hill, but nothing will happen with NCB legislation until later in the year.

HC: Are you prepared for NCB if it is implemented? What preparations are you making?

Jim Binson: We are prepared to compete, and believe that, properly applied, there are merits to competitive bidding.

Todd Christopher: You’re preparing for things you don’t know the details behind. As a company, we are well-positioned to respond to what we think will happen: We’re large, we have good economies of scale, we have a good management team and we have good access to information. Five years ago, we took the strategic position to be a diversified company. We offer a broad mix of products, and Medicare represents only about 45 percent of our payer source.

HC: Do think HME providers, as a group, are prepared for NCB? What preparations do you think providers should be making?

Jim Binson: Providers, as a group, are not prepared for anything. One of the best things independent providers can do is affiliate with a network that can act as a whole while protecting the entrepreneur and supporting the efforts of small business. That way, the little guys can compete.

Todd Christopher: My biggest fear is the government will whack us by 15 percent this year and then implement NCB in 2004. Therefore, we need to say to [CMS Administrator] Tom Scully, “Look, don’t impose an IR cut on this industry prior to implementing NCB. That’s a double jeopardy that would be tremendously harmful to our industry.”

Joel Mills: Even when [the government] implements NCB, there will be several roll-out phases. The preparation will be as cost-competitive as it can be, but providers will also be cost-competitive because of IR and because there has been very little change in reimbursement [for DME]. The key is to be very cost-conscious.

HC: If NCB is perceived as a major development in 2003 that will have a negative impact on HME providers, what might have a positive impact on HME providers?

Jim Binson: I’m not sure that NCB will have an overall negative effect. If a bid were awarded to a network, many small providers would finally be able to operate on a level playing field. This could add years of security to the industry.

Todd Christopher: The HME industry has about a 6 percent to 8 percent internal growth rate. This bodes well in years to come. Another positive is that NCB hopefully will eliminate IR — and will eliminate that pall that hangs over the industry that says, “When is the next cut coming? What is going to be cut?” [By allowing] the market to dictate pricing, NCB could stabilize this industry.

Joel Mills: The positive piece of it is that all of this upheaval will cause the industry to unite, and that unity is something we need in order to combat what’s happening on Capitol Hill. I also believe that the government will continue to try to weed out the bad actors in the industry, which will help those of us who are doing [business] the right way.

HC: Is there anything further you would like to address?

Jim Binson: The coming year presents an opportunity for the HME industry to band together — to join networks to protect the health and wellbeing of our people.

Todd Christopher: I don’t think NCB will wipe out the industry. If that line of thinking held true, then the [Balanced Budget Act of 1997] would have put us all out of business. We’re a smart bunch of people. We’ve survived other challenges, and we’ll survive this.

Joel Mills: [This year], cuts will come from all areas. Therefore, it is that much more important for providers to become educated and involved. If they sit on the sidelines and expect 30 or so leaders in the industry to foot the bill, they will be left behind.