Betting on Bariatrics

Take a stroll through any mall in America and you will see an HME market segment in the making.

Nearly two-thirds of American adults are either overweight or obese, according to the National Health and Nutrition Examination Survey for 2003-2004, the most recent available. (The survey defines “overweight” as poundage in excess of ideal body weight; “obese” is weighing more than 20 percent over ideal body weight.) And most of those people still want to be active. They want to go to the mall, go to the movies, visit friends, travel.

But often, they can’t do it without help. Enter bariatric mobility. It’s an unsung sector that could expand a provider’s bottom line, say those working in the field.

“It’s growing rapidly,” says Michael DiFranco, bariatric product manager for Elyria, Ohio-based Invacare. He estimates the demand for bariatric products could grow between 10 and 15 percent in the calendar year. “It does represent new business for the provider.”

Both manufacturers and providers point to three reasons HME companies might consider establishing a presence in the bariatric mobility market:

1. The prevalence of obesity in America — and its growing numbers;
2. The fact that many in the obese category are baby boomers and therefore are not Medicare-reliant, which could mean more cash sales;
3. An increasing availability not just of bariatric mobility items but also other bariatric equipment.

Could it be a market for you?

BARIATRIC BENEFITS

If you’ve been in the HME business a while, it’s likely that when someone mentions bariatrics, you envision a limited selection of product, the need for a warehouse to store oversized equipment and waits of up to six weeks for many products. Indeed, that’s the way it was not too many years ago.

Then, says DiFranco, there weren’t many manufacturers developing bariatric products. “Products cost a lot, oftentimes above the Medicare allowable,” he points out.

Providers shied away from the market.

“In the old days when people came in for bariatric products, dealers weren’t as familiar with them or [didn’t know] how to get them,” says Harvey Diamond, executive president and CEO for Drive Medical Design & Manufacturing.

The Port Washington, N.Y., manufacturer began making a big push into the bariatric sector about five years ago. “We try to get [providers] not to say no to those people, to realize [that the products] are available, they are in stock, they’re available for quick shipment.”

Today, according to HomeCare’s 2007 Buyers’ Guide, nearly 65 manufacturers build bariatric wheelchairs and scooters alone. Costs have dropped and availability has soared. Driven by what some have labeled the “epidemic” of obesity in America, the bariatric product segment has exploded. And products are available, from canes, walkers and rollators to bathtub products, beds, lift chairs, transport chairs, commodes and lifts.

Even CMS has recognized the variations in bariatric products. The new coding for power mobility devices, for example, includes 23 codes for bariatric products, and it clearly defines categories of “heavy duty” (301-450 pounds), “very heavy duty” (451-600 pounds) and “extra heavy duty” (610 pounds plus) with allowables for each, according to executives at Pride Mobility Products in Exeter, Pa.

A number of manufacturers are designing chairs to fit those codes, and that’s making the sector much more provider-friendly.

“Manufacturers are producing more wheelchairs. It makes the market more easily accessible,” according to Tony Rollins, operations manager for Fuller Medical in Gadsden, Ala.

John Velekkakan, owner of American Home Respiratory Care, which does business as Monroe Oxygen and Medical Equipment in Rochester, N.Y., agrees. “Basically, we can get things even the next day if it is private pay,” he says. “If it is Medicare or Medicaid, we need to go through all the procedures and that may take more time.”

But the days of waiting for weeks for a bariatric wheelchair to arrive are pretty much gone.

Still, many providers are reluctant to explore this new market, says DiFranco. “Providers are in a passive mode where they take orders as they come in the door. No one is establishing themselves in the market,” he says. “They are unfamiliar with it. They are probably distracted by all the other Medicare things going on [so there’s] inertia going into another market and selling it in a different way.

“The thing is,” DiFranco continues, “providers sell beds, they sell walkers, they sell power wheelchairs. It’s not really a stretch to get into bariatrics.”

Now, with swift availability, decent profit margins and an expanded product line coupled with demand, the bariatrics market is one providers would be wise to consider, DiFranco and others say.

Jim Leedom, owner of Home Health Depot in Lomita, Calif., has been working in bariatrics for about five years. It was his late partner, a man who himself weighed 450 pounds, who persuaded him to get into the market. “It has been rewarding. I have done things for people who haven’t been outside for two years,” says Leedom, pointing out the personal side of providing bariatric products.

Beyond that, Leedom says working in the sector has improved his bottom line, and he notes one of the pluses of being in this market is little competition. “The fact that you do it and no one else does sets you apart from the competition,” he says. “Most [providers] won’t take the time to learn it.”

Diamond sees other benefits. “Along with regular mobility, it can probably give the dealers a better blended gross profit margin,” he says. “Another good thing is that while some of the mass merchandisers have gotten into mobility, they have not gotten into bariatric mobility.”

Adds Dale Nash, director of standard HME products for Longmont, Colo.-based Sunrise Medical, while there certainly are challenges in bariatrics, “the overall business is constant and offers the opportunity to expand a provider’s market penetration.”

MARKET CHALLENGES

It may be a bright light in the current HME mobility market, but there are some challenges for providers, namely knowledge, inventory and advertising.

Providers not only need to know what’s available in the market, they need to know how to find the best product for the bariatric patient. And that can be tricky, since not only size but a variety of physical conditions — even skin breakdown — can come into play.

“Bariatric mobility requires some extra effort and expertise than that of the standard business,” says Nash. “Naturally, there are different levels of need and challenges for the client due to their specific physical conditions.”

Because of that, Leedom says he works closely with the manufacturers when he is fitting someone for a bariatric wheelchair.

“We rely on the manufacturer to guide us,” he says. “We do the specs and the measurements, and then the manufacturer chooses the right product based on the measurements. Even then, you have to tweak it. It doesn’t take as much time as a rehab product, but it does take more time than [a standard chair].”

With the increasing popularity of gastric bypass and other bariatric surgeries, providers must also do some research to find out whether the end-user plans to go that route, Leedom says. “If you know they are going in for gastric bypass or gastric banding, then you consider that as you try to fit them. I’ve seen people drop 100 pounds in a year, and they no longer fit the power chair. Then you have to fit them again.”

A home assessment is also a must, providers say. Door and hallway widths, table heights, bathroom accessibility — all must be considered in choosing the right kind of wheelchair to provide.

Because bariatric mobility products are heavier than standard equipment, Rollins says he even asks how someone plans to transport the wheelchair. “How are they going to get it in and out? A husband or wife love each other, but you get a blinding rainstorm, and are they going to love you enough to disassemble your wheelchair when they’re getting soaking wet?” he asks.

Rollins underscores the need for knowing and understanding the Medicare guidelines related to bariatric products, and also knowing the exact products that are available in this market sector. It’s critical for the provider to have that information, he says, because referral sources often do not.

“Usually [the end-user] comes in with a physician order for a specific item. And most times, the physicians don’t know the criteria [for Medicare qualification]. It’s one of the biggest problems in the industry. They just say to the patient, ‘Go get this.’”

It’s up to the provider, then, to try to figure out exactly which equipment will work best for the patient and his or her individual lifestyle and needs. “There are a lot of things that go into getting someone into a wheelchair,” says Rollins. “It’s not just signing some papers and it’s yours. It goes back to total patient care.”

WHAT ABOUT INVENTORY?

For many providers, one of the biggest stumbling blocks to entering the bariatric market is the matter of inventory. How do you make space in a showroom for over-sized beds and wheelchairs, for example?

Leedom says he keeps bariatric bathroom equipment on the showroom floor because it’s regular retail. “But there’s no reason to keep a bariatric bed on the floor,” he says. “It takes up a lot of room, and your square footage use is not good. So I rarely put bariatric products on the floor because it doesn’t pay.”

Manufacturers provide him with product catalogs so people can at least see what the products look like and what their special features are, he says.

Monroe Oxygen’s Velekkakan and Fuller Medical’s Rollins warehouse some items. Rollins also has a showroom where he displays a limited number of products.

“You have to have the ability to warehouse to whatever extent you feel you need to have it available,” says Rollins. “In this society, we want it and we want it right now. So the companies that do have the warehouse ability, it’s better for them.”

Velekkakan notes that warehousing bariatrics can be complicated. “You need more space,” he says. “We try not to have too much inventory. Our inventory runs about $150,000, and we try to turn it over as fast as we can.”

But providers and manufacturers alike say it is important for providers to offer a full spectrum of bariatric products if they want to be successful in the field.

Invacare’s suggested Starter Kit 1, for example, includes two types of commodes, a walker and walker wheel kit, crutches, an offset cane and two quad canes, shower chairs, a transport chair, a transfer bench, a rollator, a full-sized bed and an air mattress.

Smart providers will also recognize their patients’ need for a lift chair or other equipment that will help with accessibility. For example, says Leedom, “we also offer non-covered services — outside ramps, elevators, things like that.”

Points out Nash of Sunrise, “If the client has the need for mobility, they will also have the need for many other assistive products.”

ADVERTISING IS ANOTHER KEY

But having knowledge and inventory won’t lead to success in the bariatric mobility field by themselves.

“You can stock the equipment, but if you don’t promote yourself to the individuals, it’s probably going to sit there. Use the manufacturer to help advertise,” recommends Invacare’s DiFranco.

It’s important to market to referral sources to let them know about the bariatric products you carry and the services you provide, notes Nash.

Since Velekkakan sees bariatrics as a growth market for his company, he is advertising the fact that the store carries bariatric products with visits to each of his referral sources. “Close to 500 doctors refer to us,” he says. With each source, he goes over exactly what bariatric products are available and shows them photos.

He’s also trained his staff about bariatric products so that every person at Monroe Oxygen is alert to patients who might need such equipment.

“We’re not going to leave anything to chance,” he says.

Rollins doesn’t rely on print or TV advertising. “Your biggest marketing is word of mouth — informing the public and informing the referral sources, the doctors’ offices and discharge planners,” he says. It’s important, he believes, to get the word out that “because of someone’s size, it doesn’t mean they have to go home and sit on the couch for the rest of their lives. They can continue with somewhat of a normal lifestyle.”

Home Health Depot’s Leedom says he markets mainly to hospitals. “They are the ones who get the patients for gastric surgery. The discharge planner is still the key person,” he says.

In the end, providers who want to enter the bariatric mobility market will have to do their homework. And for those that do, it could pay off.

A Helping Hand

Manufacturers are a good source for help if you are considering entering the bariatric mobility sector. Most offer pamphlets, catalogs and other marketing tools, and they can help you decipher Medicare coding as well.

Elyria, Ohio-based Invacare has even created a Web site to help — http://bariatrics.invacare.com

The site’s goal, according to Invacare, is to “provide a pathway to bariatric solutions, education and information for consumers/family members, medical professionals and Invacare providers.”

HME companies not only can point their customers to the site for support and information, they also can find a bariatric product catalog and arrange a bariatric conference or training seminar in their area. In addition, there’s a tool by which providers can actually calculate their profit on bariatric products, according to Michael DiFranco, Invacare’s bariatric product manager.

The company also offers a bariatric marketing kit that contains suggested starter kits, information about the Medicare HCPCS coding for its bariatric products, a marketing guide and a full catalog of bariatric products.