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."