HME Retail Done Right Can Make Up for Lost Reimbursement
How to build a caretailing basket
by F Chris Nelson

There are many challenges the HME industry currently faces, not the least of which is the lost revenue once generated by high reimbursement rates. With the government’s increased pressure on insurance companies to reduce costs and lower premiums, the likelihood of reimbursement relief is slight to none.

As an industry, we need to find alternative sources of revenue to get past the disruption of reimbursement changes. In this column, I am going to introduce the concept of “caretailing” to some of you, and to others who are already familiar with the term, I hope I can impart additional insight into how to execute it more profitably.

The HME industry has traditionally been one where a customer would enter your store or office with a prescription and an insurance card, and walk out with whatever device or instrument had been recommended by their physician. I don’t believe that will change, which is good news. It’s the “what else can I introduce to them during that visit,” approach that we want to learn. In big retailers across the country, that’s called “building the basket.”

HME Past and Present—New Approaches

Let’s take a walk into what I see too often: an old, tired and outdated assortment of commodity items, an uninspiring sea of blue packaging. You could have fallen asleep 20 years ago and woken up in the same aisle and not known you had slept for 20 years.

Locations such as Freedom Mobility in Maryland or HomeHealthSmith in Rhode Island are popping up, fortunately. But unfortunately, there are still too many medical equipment business owners that have not changed their approach to take advantage of today’s opportunities.

Caretailing is an ever-more important dimension of the HME business. Without access to cash sales and with continued reliance on reimbursements, the merchant will never grow and, more likely, will cease to exist.

Having come from the sporting goods industry, which is based on fashion, one of the things I notice most about homecare products is the lack of inspiring packaging. Even a donut seat can be updated with a new approach to visual merchandising.

I once had a consulting engagement where a very technical, medically sound accessory was having difficulty getting placement in a sporting goods chain. The company had been in the medical device industry for years and was very successful. They felt their products would be beneficial to an athlete.

The problem was that the packaging looked medical, orthopedic and assistive. Athletes do not want to buy something that makes them appear weak or hurt. When it comes to HME, we are getting near—we may even be at—this point. Packaging has become so nondescript and uninspiring, that people have no problem looking for a comparable product they like better—this is where sites such as Etsy and Amazon are finding a growing niche.

The new generation of adults entering this market includes consumers who are attracted to bright, fun packaging and without a doubt, their children are, too. They don’t want to buy a product that makes them look or feel old.

Ideas for Your Store

HME retailers and manufacturers need to step up. Replacing tired merchandising displays, such as grid walls and pegboard with a slat wall, will do wonders for displays. Take the bedside commodes and other assistive products out of your front windows. Move the low-margin items to the back of the store and the high-margin, fun, innovative and new accessories up front where customers will see them upon walking in. And why can’t a donut have a pattern or colors?

Be Thoughtful—Take Time to Build a Basket

My guess is that you have built a basket before, while shopping for yourself. A few examples:

  1. You buy an appliance, and the sales person asks you to buy an extended warranty.
  2. You bought a pair of shoes/sneakers, and the sales person asked you to buy socks and insoles.
  3. You bought a newspaper or book at an airport shop, and the clerk asked you if you wanted gum and a bottle of water.

You need two things to build a basket:

  1. Ability to ask a question
  2. Options (services or products) to offer

In a self-serving example, my company manufactures accessories that clamp on to wheelchairs, walkers, rollators, bed rails and more. If an HME retailer were to sell a wheelchair, the question would be, “How would you like to see an accessory that can hold your tablet or smartphone hands-free, so you can easily video chat or go online wherever you are?” The customer may say “no,” but they may say “yes,” and you just put a cash sale on the register that you would not otherwise have made from the same transaction—you built the basket.

And, before we get too carried away in Xanadu, let’s talk about the 800-pound gorillas— and Walmart.

Experience is a wonderful thing. It doesn’t make one smarter, but it does make one wiser. It amazes me there are any retailers still in business today. Since 1983, I can’t tell you how many times I have heard, “Your company is putting me out of business—selling to superstores, home shopping, big box, clubs, Walmart, [nameit].com or Amazon.”

The fact of the matter is if you value the service that you can offer a customer, and you offer your service in a comfortable and current environment, you will survive. When it comes to medical devices and health services, do you believe you offer more than a big box or Amazon? I do. Do not sell your knowledge, your experience or yourself short.

The opportunity for an HME to not only survive, but thrive, with caretailing is huge. The time is now to make the commitment as a business owner and as an industry.