The Road Ahead

The only thing permanent about life is change. Most would agree that this proverb applies to the home medical equipment industry, too.

Granted, the industry has experienced many challenges during the past 10 to 12 years: acquisition mania, “superstore threats,” and concerns revolving around mass retailers, “direct” manufacturers, managed care, accreditation, oxygen reimbursement cuts and more.

Nevertheless, one constant remains: the importance of the local, full-service HME provider. Whether the provider operates independently, as part of a buying group, or as a national account location, an autonomous, local, full-service, experienced and caring HME, mobility or rehab provider still is what best serves people in need of our products, and I fully expect this will continue to be true. There is a saying, “All politics is local.” In our industry, all business is local. I remember thinking, at the turn of 2000, when HomeCare magazine was looking for the HME person or topic of the decade, that the obvious choice was the local provider. This feeling has remained; but the challenges have changed.

I was asked to write about my thoughts about what lies ahead for the industry in 2003. Because the provider is the most essential link in the client-fulfillment chain, I have decided to focus on providers.

Successful providers never are stagnant. Instead, they evolve with industry conditions. Such evolution has led to a wave of specialization. Providers are finding that specialization not only differentiates them from competition, it allows them to become good at their core business.

Standards for Providers

Industry conditions will call for a new set of provider standards. Some of the standards and certifications that industry leaders are discussing target rehab providers and mobility companies, and others target more generalist HME providers. Once such standards are clearly defined, they will make sense for all providers.

I don’t believe any industry professional supports a provider or manufacturer who operates below a generally accepted code of ethics. So it probably is time for new requirements — standards that will further formalize our profession, remove any who don’t belong, and help new participants better understand the level of responsibility that being a provider requires.

Manufacturers will continue to have more responsibility for the ways in which products are distributed. Pride maintains policy standards for Quantum Rehab providers, Pride Mobility providers, and Internet sales. As market conditions have evolved, we have adapted appropriately, serving the best interests of traditional providers.

From an operational perspective, providers will continue to become better business people — gaining the best pricing, managing inventory, using business software systems effectively, employing trained and skilled employees, developing more effective marketing plans, improving financial programs, ensuring faster and more constant payments, and more.

Manufacturers as Partners

Looking ahead, providers should expect more from their manufacturing partners in every area of business. For instance, Pride Mobility has used all available resources to design products, to establish operational and fulfillment systems, and to offer business-building support services, marketing services, financial services and reimbursement services that address providers’ needs. We also have trained personnel to assess a provider’s needs and make available the right services that often are customized to a provider’s real-life requirements.

Such partnerships have created a business relationship that has allowed Pride to do what is in a provider’s best business interest.

A provider recently informed me that our new online service, www.mypride.com, and our increased customer service training saved that provider two hours per day. Although this sounds like a sales pitch, the reality is that these synergies will allow providers to spend their time more productively in the future.

Additionally, Pride helps providers enter new markets, without requiring providers to dedicate enormous resources. One example is our newly developed Go-Go Travel Vehicle, which is intended to provide affordable mobility to individuals with less-severe disabilities. The Go-Go Travel Vehicle, a low-cost, non-POV item, will enable providers to serve a new, larger, more cost-conscious market, and to expand retail business without comprising profitability.

By leveraging our size on a national scale, Pride Financial Consulting Services has set up banking programs that offer qualified providers low-interest borrowing plans. The age of competitive, sound financing plans will replace the age of high-interest leasing. The availability of low-cost capital is essential to improved profitability and market expansion.

Educating Consumers and Payer Sources

One area our industry does need to work on is educating consumer groups and funding sources. We must begin to include consumer groups in the American Association for Homecare, and perhaps at Medtrade, to develop an exchange of information. Obviously, issues such as competitive bidding will affect consumers — our clientele — significantly, and we must figure out how to enlist consumers’ support. We all probably can agree that our clout in Washington is not what it needs to be. Providers face situations that, frankly, no reasonable — or sane — person could imagine.

For instance, we now face the possibility of local or national competitive bidding for durable medical equipment. The Centers for Medicare and Medicaid Services is determined to save $7 billion dollars during an 8-year period, and, at press time, competitive bidding was the only idea on the table. First and foremost, we must supply an alternative. Quality care can continue, and real savings can occur, without overhauling the system and putting providers’ businesses and service quality in jeopardy.

However, if some modified version of competitive bidding legislation becomes reality in 2004 (if competitive bidding passes in 2003, it would be virtually impossible for anything to go into effect sooner than late 2004 or 2005), providers must remember that their bids will set the price. We must not bid with a “survival mentality.”

As Max Cleland, a Georgia Democrat who recently lost his Senate seat, once told me, survivors are for POWs. We should seek better than that! We must bid in a professional manner, based upon what’s in the best interests of our businesses, and the long-term servicing of our clients and products. One modifier worth pursuing is an “inclusive” provision — a patients’ choice provision, for example — which would allow all providers who agree to operate at the bid price to participate.

Limitless Possibilities

By becoming better at what they love to do — by raising standards and capitalizing on our evolved experiences, by setting a business strategy that “faces the realities” of profit and loss, and by leveraging the resources of the right manufacturers — local providers will enjoy many prosperous new years.

Dan Meuser is president of sales for Pride Mobility Products, an Exeter, Pa.-based manufacturer of mobility equipment.