VMI Courts the Cash Market

PHOENIX, Ariz. — In the wake of CMS’ recently announced competitive bidding rates, HME providers are once again seeking to rely less on Medicare dollars. Converting vans to wheelchair accessible vehicles is one thriving business that is not entangled within the federal program, and officials at Vantage Mobility International (VMI) think it’s worth a fresh look.

Consumer demand for such products, in fact, has led VMI to increase its workforce by 25 percent and hire additional people to support new projects at its Arizona manufacturing facility. The company is also capitalizing on the interest by expanding product selection.

Demand for Honda, Chrysler, GM and Ford-based wheelchair vans “continues to be strong,” said Doug Eaton, VMI president and CEO. “While it was a tough year for many businesses, we’ve accelerated manufacturing to fulfill orders and we’re adding specialists to help develop our next generation of vehicles.”

So far this year, VMI has added 32 permanent employees and 18 contract workers in positions from production to skilled labor to quality inspectors and engineers. The company is also actively recruiting 40 people for the development of new products.

Known for its van conversions, platform lifts, wheelchair lifts and transfer seats, VMI produces lifts and conversion equipment primarily for occupied wheelchairs that carry people who spend virtually all their time in chairs. While this type of equipment may be relatively low volume, Eaton said providers who are looking will find ample opportunity to build cash business.

“Our modifications are not funded by Medicare,” Eaton said. “I have always felt that when Medicare changes came to the DME business that providers would start looking more seriously at our model and see the growth that we have experienced, the margins we are creating and the customer satisfaction. Being super-reliant on Medicare is putting too many eggs in one basket.”

Those who take the plunge and become certified modification dealers must have the space necessary for welding and fabricating, plus the personnel to get it done. “You’ll need electrical technicians and mechanical technicians that have specific automotive skills,” said Eaton. “There are also some personal liability and injury implications, because if you put a quadriplegic behind a steering wheel, there is a chance that person could crash. I think some dealers have probably stayed away because it is somewhat sophisticated, has lower volume, and has some liability issues. But I think they will be looking at it a lot more closely as the winds shift and cash becomes a much more prominent model.”

With sales up 30 percent in 2010, VMI is experiencing solid growth in unit sales and market share. Eaton attributes the numbers to better efficiency at the factory — a 116,000-sq. ft. conversion facility in Phoenix — and an exclusive deal with the Honda car company.

“We’ve spent the last two years improving our lift manufacturing processes with our lean quality initiative,” Eaton said. “We also have the only supply agreement with Honda, and the Honda Odyssey is torrid hot with almost 40 percent of the U.S. market for personal mini-vans. We are the only one that is authorized to convert and supply that vehicle, and that has been our bread and butter for the last couple of years.”

The company, which has 700 dealers worldwide, is also capitalizing on consumer interest by expanding product selection with items such as its next-generation Ricon Slide-Away platform lift. The new lift advances the design to allow full functionality of the front passenger seat and provide greater access for able-bodied passengers. Enhancements over previous models include a pressure relief valve in the hydraulic pump to better protect platform components and an upgrade from steel to extruded aluminum on the outboard barrier material to reduce overall platform weight.