Rapid changes in the home medical equipment industry—on both the dealer and manufacturer sides—are making a big impact on how home medical equipment (HME) is repaired and serviced. It’s a sector that has experienced a huge surge in demand over the last several years and is ripe for some fresh thinking about how to improve inefficiencies without sacrificing repair reliability.
Here are five market factors impacting this sector and how new thinking on repair can best serve the HME industry of tomorrow.
1. HME dealer consolidation is creating demand for repair options to serve a wide geographic footprint.
Back in the days when small regional and mom-and-pop HME dealers dominated the industry, repair centers matched that trend. There were dozens of small one-location repair centers nationwide—Repair Authority was one of them when we were founded 33 years ago—that could adequately meet dealers’ needs.
As mom-and-pop HME dealers have gradually become rare in the industry landscape, so too have these small repair centers. Consolidation has created HME behemoths with wide geographic footprints that don’t want a patchwork approach to their repair needs, with different vendors in each of their service regions. They are demanding a repair partner that can provide consistent, consolidated service across all of their locations.
This market change is making the pickup-and-delivery model in HME repair increasingly untenable. This antiquated model—a holdover from those days of small local repair centers—adds expense and inefficiency to the delivery of HME repair services, slowing down turnaround times in an era when dealers need their fleets in the field generating revenue, not lingering in a repair center. Forward-thinking HME dealers are recognizing that shipping their equipment to a large repair center with broad capabilities is resulting in faster, more efficient service.
2. OEMs do not want to be in the repair business anymore.
In certain HME market sectors, dealers are still accustomed to sending broken warranty equipment back to the manufacturer for repair. It’s a hard habit to break, but as an authorized warranty service provider for nine major original equipment manufacturers (OEMs), we hear it straight from the top—manufacturers do not want to be in the repair business. They are building and expanding their warranty service networks precisely to circumvent the unavoidable burden of warranty repairs.
Another old practice that is understandably going by the wayside is some OEMs’ policies of automatically sending the dealer a new machine when a unit came in for warranty repair. The equipment shortages the industry experienced during the COVID-19 pandemic brought that practice to an end for many manufacturers.
That shift (not to mention the pandemic itself) generated an enormous surge in demand for warranty service centers that hasn’t abated, but instead continues to mount, even three-plus years later. From the perspective of most OEMs, warranty replacements are out and repair—preferably by an outside service center—is in.
3. Consolidation & new OEM entrants are creating diverse fleets of equipment.
With each acquisition, an HME dealer’s fleet multiplies. A provider that has historically used primarily Drive DeVilbiss and Philips Respironics concentrators might suddenly find themselves managing a fleet containing units of a variety of ages and conditions from a half-dozen manufacturers or more.
It’s just one more market factor that is driving the shift in repair centers from small and local to large and regional. The high cost of testing equipment, tooling and training to maintain certifications makes it untenable for smaller repair centers to adapt to the demands of dealers with diverse fleets. That’s why it’s so important for HME dealers to have a repair center prepared to repair any type of equipment they may find themselves owning after an acquisition.
4. HME dealers are changing their approaches to equipment management.
Some HME dealers are moving away from the disjointed model of managing repair at the branch level in favor of a more efficient, consolidated approach. For example, one large national HME dealer we work with sends all malfunctioning equipment to one of two centralized warehouse locations where units are shipped out for repair by dozens of pallets at a time. The model is more efficient and streamlined on their end and ours, and it allows the dealer to keep tighter controls over their assets.
5. Repair or replace? Market forces are changing how dealers answer this question.
The question of when to repair versus replace is an eternal one for HME dealers. But current market forces are shaking up the pros-versus-cons calculation.
A big one is the influx of new lower-priced equipment being made overseas, which gained traction in the industry during and after the pandemic due to equipment shortages at that time. They’ve had a few years to prove the performance of their units, but some are still building their capabilities for equipment maintenance, parts availability and training that dealers and repair centers require.
Time to Rethink
What worked 10 years ago in HME repair doesn’t work in today’s climate. There are fewer HME repair centers operating today, and all of us are facing extreme demand for our services, compounded by persistent staff and parts shortages. It’s time for dealers and repair centers to collaborate on fresh approaches to equipment maintenance that improve efficiencies and contain rising costs without sacrificing the repair reliability that’s essential to maintaining high-quality patient care.
With capacity on repair lines at a premium, we’re experimenting with allowing dealers to “rent” a production line or pay a package rate for a certain number of repairs per month. We’re also creating new strategies to make it easier for dealers to transition toward shipping in repairs and away from pickups and deliveries, which are not sustainable long-term.
Likewise, we’re working with HME dealers to move away from providing repair estimates—which result in slower turnaround times and more administrative burden for both dealers and repair centers—and instead work under repair caps and flat rates. We’re helping dealers turn the variable costs of repair into fixed costs to achieve more predictability in their fleet management expenses.
Fresh thinking is critically needed in the HME repair sector, and it will take open minds and close collaboration between HME dealers and their repair partners to create strategies that are sustainable for today’s industry and beyond.