Busy Medtrade Reflects HME Sea Change

ATLANTA — Competitive bidding, audits and
other government challenges loomed over Medtrade this year
like the rain clouds on the first day of the show.

In spite of it all, HME providers packed into the conference
sessions, and trade show exhibitors reported brisk booth traffic.
Many attendees were looking for ways to improve business
efficiencies, others sought to expand into retail and almost
everyone wanted to get educated about the ramifications of the
bidding program, other government regulations — and what
might be next.

South Carolina provider Joe Pearson of Coastal Rehab &
Supply in Greenville (slated for Round 2) summed up the mood of
many HME owners, enthusiastic about business yet, at the same time,
wondering whether he would make it. “We are not certain that we
will bid [in Round 2] because bigger companies obviously have
buying power that we don’t have. We hope that competitive bidding
is done away with; I don’t know that’s going to happen.” Pearson
said.

“It’s tough,” he continued. “In one sense I feel optimistic
about our future because there are more and more people —
baby boomers — that are going to be needing our products and
equipment, but on the other hand with what the administration has
done … and competitive bidding and all the stuff that CMS is
doing that’s making it more difficult, I’m afraid that it’s going
to put a lot of small businesses out of business.”

Fundamental Change

All in all, the three-day show at the Georgia World Congress
Center Nov. 16-18 seemed not so much to reflect an industry under
siege as one planning to continue doing business no matter
what.

Show-goers packed the house for regulatory updates and sessions
on retail. Software and information technology sessions were also
crowded. The NextGen Medtrade Accessible Home, constructed on the
show floor with design features and products that will make it
easier for aging baby boomers to remain in their homes, captured
the beginnings of an industry migration away from complete
dependence on reimbursement toward a future incorporating a wider
range of products, many paid for in cash.

“The reason for the enthusiasm is that people have begun to
realize that there are beaucoup million baby boomers coming into
our market, many of whom can afford to pay for this [equipment],”
said Mike Hamilton, executive director of the Alabama Durable
Medical Equipment Association. “On the other hand, Congress cannot
continue to take credit for providing a benefit that doesn’t exist
because they have taken it apart a piece at a time and made it
impossible to cover. We’re not going to let them keep on forever
taking credit for something they don’t provide.”

Janet Young, office manager of Ortho-Tec Medical, Webster,
Mass., a small DME and orthotics supplier, was a first-time
Medtrade attendee who was impressed with the scope of the show. She
was looking for billing software for her company, which still uses
paper-based systems.

Ted Rollet, a service technician for Mobility Plus in
Yadkinville, N.C., said this year’s Medtrade seemed to be “a lot
more informational,” especially related to the impending
elimination of the first-month purchase option for power
wheelchairs. He appreciates that PWC and scooter manufacturers are
offering 13-month financing with attractive rates to manage the
upfront cost burden for providers who will have to wait for
reimbursement. “We are looking for different ways to cut, a little
here, a little there,” Rollet said.

“The ground’s moving under our feet,” said Carl E. Otis,
manager, VNA Home Care Services, Williamsville, N.Y., who has been
attending Medtrade a dozen or so years. One session he went to
clarified the new rules on oxygen reimbursement. Otis also attended
a sales session for the first time this year “to keep a hand on
what salespeople are doing,” but as the company’s director of
respiratory, he came to the show looking for new ventilator
equipment. “Every year I bring something home that saves my company
money, some enlightened idea that we can implement that more than
pays for my trip here. If I come back better educated, I can
educate my staff,” he said.

Adrian Knight, director of sales, the Americas, for San
Diego-based SeQual, said a larger number of providers were asking
more in-depth questions and becoming more adept at choosing oxygen
equipment among a wider array of product options. In addition to
meeting patients’ clinical and lifestyle needs, Knight said, “As
non-delivery has become a more accepted solution in the industry,
they want to know how this can help grow their bottom line.”

Attorney Jeff Baird, chairman of the health care group at Brown
& Fortunato, Amarillo, Texas, believes the noticeable energy at
Medtrade may reflect acceptance of fundamental industry change.
“Now we are undergoing a sea change, and the DME is having to
operate in a brand new landscape with competitive bidding and lower
reimbursement. Change is traumatic, but the old way of doing
business no longer works,” he said.

“I am seeing entrepreneurs coming out of the woodwork,”
continued Baird. “I’m seeing fresh ideas. Over the last six to 12
weeks, people have been calling me with ideas, and I’ve had these
aha moments where I sit back and think, ‘Wow, I have not heard that
before, that’s a great idea.’ I am seeing people making peace with
the fact that competitive bidding is here to stay (although
hopefully it will go away). They are accepting it for what it is
and making the business model work …

“I have talked to people who are not scared of competitive
bidding,” he said, echoing Pearson’s thought that some providers
are refusing to bid because they can’t afford the low rates and
instead are looking to expand their business in other ways.

Retail Strategies, Search for Efficiency

At a Nov. 17 session on retail strategies, Cy Corgan, national
sales director, retail mobility, Pride Mobility Products/Quantum
Rehab, urged providers to make a commitment to retail and to look
for a competitive edge in the marketplace. “You really need to be
engaged,” he said. “You need to have the product, have the service,
have the well-trained staff. Ask yourself: How can I be the easiest
company to do business with? What’s my value proposition? What do
we stand for? Are we willing to take a risk?”

Many other exhibitors also offered resources to expand retail. A
new program for Golden Technologies’ lift chair line, for example,
offers specialized merchandising and sales training.

“We’re not trying to tell providers how to run their business,
but we want to bring in our director of merchandising and sales rep
and sit down and evaluate the showroom layout and talk about retail
and merchandising strategies,” said Pat O’Brien, director of
marketing. “They all say, how soon can you come? They can’t wait to
get help and an outsider’s perspective of their showroom, sales
presentation and merchandising. We’ve talked about doing something
like this for years. Now is the right time for the industry to
embrace it.”

Jay Williams, sales manager, west, for QS/1, Franklin, Tenn.,
said many more attendees at Medtrade this year were looking at HME
management system software including elements such as
point-of-sale, GPS and IVR automated telephone systems. Williams
moderated two technology sessions at Medtrade, and both had heavy
attendance.

Other technology booths were also busy. “Potential clients are
definitely looking for ways to increase efficiency,” said Kent
Barnes of TeamDME, Brentwood, Tenn., whose product is a complete
operations package for inventory control, accounts receivable and
back-office financial management. “They are looking to use
technology to improve productivity,” he said, noting that the
company’s system allows providers to know at the end of the day how
much money they have made and what their profitability is.

“There’s definitely a lot of concern about competitive bidding,
including concern about doing more with less in response to
shrinking margins and having to serve more customers if they win
the bid,” he said. Barnes said he had seen greater interest at this
show for the company’s POS component. “We have heard some people
talk about retail being the only thing they will do. That’s new at
this show.”

Making Education and Ideas Pay Off

“The biggest reason we come to Medtrade is to keep up-to-date on
the new products in the industry,” said Chris Pallotta of WV
Durable Medical Equipment, Fairmont, W.V., one of the few DME
companies that handle both Medicare and Medicaid for West Virginia
and whose biggest product is diabetic shoes.

WV manager Gregory J. Amendolea started the business and later
brought in childhood friend Pallotta to help him operate it. “I
have been coming to Medtrade for about five or six years,” said
Amendolea. “The first year I came by myself. When I went back home,
I told Chris that if I had to handcuff him, I would bring him down
to Medtrade. You can’t describe how big it is, how much information
there is to absorb.”

This year, Amendolea found a wheelchair that can handle 550
pounds for a bariatric customer, and saw a cane by TruMotion that
provides the support of a quad-cane with the mobility of a
single-point cane. “We want to be the first on the block,” he
said.

The two businessmen flew in from Pittsburgh for all three days
of the show. “To be in this business, you have to come to
Medtrade,” said Amendolea. “We’re better educated because of all
the regulation. There are a lot of dos and don’ts that we are now
informed of. Now you really have to know what to do and what not to
do.”