Celebrating HME Business Successes

Even in the competitive bidding era, there are paths to success. In the northeast, Gary Sheehan, MBA, owner of Cape Medical Supply, Sandwich, Massachusetts—with locations in Canton, Massachusetts, and Kittery, Maine—has largely focused on the burgeoning sleep market. It’s a calculated tactic that has served him well since taking over the 36-year-old business in 2006. In Portland, Maine, Jim Greatorex, co-owner of Black Bear Medical, has gradually expanded his retail operations to about one-third of total business, while decreasing his Medicare reliance to roughly 18 percent of overall revenue. Both businesses thrive by focusing on the strengths of owners and staff members. Sheehan has navigated the twists and turns of government policy by honing in on the sleep business, along with orthopedic soft goods, oxygen and general DME. He points out that the economics of slumber are not all Medicare, a phenomenon buoyed by tremendous awareness of sleep disorders in the mass media. “We have a good process outlined for servicing sleep patients,” says the 36-year-old Sheehan. “About 25 percent of sleep is Medicare business, and sleep represents about 40 percent of our total business. When you combine that broad market with good control over the processes that support patient care, it makes us very bullish about sleep therapy and our ability to expand with it.” The secret to Sheehan’s success is a willingness to convey Cape Medical’s dedication to physicians and sleep lab directors. Taking away the headaches involved with getting patients qualified, quickly set up and compliant with CPAP therapy resonates with referral sources. With the right combination of charm and professionalism, Cape Medical sales reps make face-to-face calls that get results. “The reps have to work at it,” says Sheehan. “It’s not like people are sitting around waiting for sales reps to occupy their time. However, it’s gotten more complex for physicians to manage patients with sleep apnea and to get referrals through to folks like us who can take care of them. There’s a general receptivity because it’s a pain point for physicians and sleep labs.” Every time Cape Medical, with locations in Canton, Massachusetts, and Kittery, Maine, can ease some of that pain and contribute to good outcomes, their reputation grows. This gradual approach to building the business appeals to Sheehan’s meticulous nature, and he has stuck with it through slashed reimbursement rates brought on by competitive bidding. Greatorex, on the other hand, has little interest in knocking on physician doors, instead preferring to do most of the marketing for his four locations (Bangor, Portland and Bar Harbor, Maine, and Greenland, New Hampshire) directly to consumers. “One of the best things we’ve done is a couple of open houses on pain management products that were extremely successful, but it took a lot of promotion work in and outside of the store,” says Greatorex, who serves as president of Black Bear Medical. “We did a media campaign through print mostly. We also did a digital marketing campaign where we used our email contacts and clinical contacts. “Our marketing manager went out to some key clinical referrals to pin up notices for the patients and asked the clinical people to come to the event,” he says. “We sold more product than we had on hand and had to backorder, which is a wonderful problem. That was probably the most successful campaign, as a stand-alone thing, that we’ve done in the last three years.” Jack Evans, owner of Global Media Marketing in Malibu, California, draws a clear distinction between traditional HME marketing and retail HME marketing. “In the old days, we had relationships with the medical community,” he explains. “In retail, we go for the low hanging fruit. Most of our referrals come from chain pharmacists, independent living, assisted living and urgent care. We might call on a few specialists if we have a huge orthopedic section, or perhaps go to PTs. Basically, we call on a different population, and it’s easier because we’re going for a private-pay cash market.” Without the referral pipeline so common for traditional HME, Evans recommends advertising for the retail world in an effort to generate customers. “Many successful retail stores advertise on a continuing basis,” he says. “They have contracts for either print, radio or television, and advertising is ongoing—daily, weekly or monthly. For print advertising, we’ll have at least two or three print ads a month. The stores that are running radio will run probably two or three weeks out of the four, and same with TV.”

The Yellow Pages are no longer an effective way to bring in traffic, but websites are still important if search engine optimization (SEO) can bring business to the first page. “It’s very important when someone searches for medical equipment in your community that you come up on the first page of Google,” stresses Evans. “That means you need a website and someone who understands SEO. You need to have a lot of content on there. Your website is a part of your community visibility, your community image.”

New Location in Tourist Area

The newest addition to Black Bear Medical is a retail-only operation in Bar Harbor, Maine, which is essentially a tourist town fueled by the immensely popular Acadia National Park. Opened in May, the store is part of a newly rebranded retail division of Black Bear dubbed “This Active Life.” “Right now we have two This Active Life stores, and the concept is that we carry products for people to help them remain active in their life, however they define it,” explains Greatorex, “whether it’s seniors who need products to help them live their lives to the fullest, athletes looking to perform at their best or they’ve had an injury and need help getting back on the field. We have the experts to help.” Opening a new store is a major commitment, and Greatorex kept his eye on the “quaint little town” of Bar Harbor for the perfect opportunity. A chance to be near Acadia, one of the five most popular national parks in the country (with more than 3 million visitors per year) ultimately motivated him to pull the trigger. “The park has a big influx of tourists during the months of June, July, August, September and some into October,” he explains, “so we have leased a somewhat modest space, and we are trying our retail concept there.” This willingness to experiment with new locations, products and concepts has generally served Greatorex well, but knowing when to drop a losing strategy is also the mark of a successful business. For example, when manufacturer support waned, Greatorex stopped carrying “spring shoes” and high-end mattresses. Years ago, a major investment in the uniform business also fizzled due to what Greatorex admits was a failure to truly understand the business. “Sometimes you have to regroup and do things a little differently,” he says with a chuckle. “When we opened our uniform division, there was one major competitor in town. People were dissatisfied with it, but evidently there were two other start-ups. We all opened within three months of each other. We now had four competitors. “We also realized that selling clothes is way different than everything else that we sell in our industry,” says Greatorex. “With clothing, you leave people alone. We’re used to going up to help people. We had a special design that had decorative pigs on the shirt, and you just never tell a lady she looks good in pigs. It just doesn’t work.”

Get Out of the Office

Regina Gillispie, RRT, has seen her fair share of ups and downs in the DME world. Through it all, the owner of Best Home Medical, Bar-boursville, West Virginia, and Best Medical Equipment in nearby Hurricane, has relied on products and knowledge from trade shows such as Medtrade and Medtrade Spring. “In the last three years, I have gone to Medtrade Spring, and I am making plans to attend Medtrade in Atlanta [Oct 20-23, 2014] this year,” says Gillispie. “Last year, I enjoyed the Vegas show. It was one of the best that I have been to. I really got a lot of information, and I got a lot of one-on-one time because it is a smaller show. You get to spend time with the vendors and the new products.” Regular Medtrade attendees know Greatorex as a frequent presenter who readily shares his product ideas and marketing strategies. He will again be at Medtrade this fall, where he hopes to gain as much as he gives. “I want people to know that there are other avenues out there that you can pursue, and it is possible to generate a profitable store with something different than what you’re doing now,” he says. “There is also a bit of selfishness involved in why I attend and present at Medtrade. I want to be on the cutting edge and know about the latest and greatest new products. I learn twice as much as I share at Medtrade.” As the owners of North Carolina-based Active Healthcare (AHC), Steven Feierstein and his wife, Lisa, a registered nurse, have managed to succeed with the regional business thanks largely to their willingness to learn. The Feirsteins have attended many Medtrades throughout the years, and they see it as the ideal venue to find new products and keep up with the latest industry education. “We go so that we can stay current on all the latest products and trends occurring in the industry,” says Feierstein.