Providers Look to Build Sales in HME Retail

ATLANTA–In larger numbers than ever reported, home medical
equipment providers participating in HomeCare’s 2007
Retail Survey said they intend to increase their retail sales this
year. That’s a big jump from the 58 percent of providers who said
they were interested in doing more retail business in 2003, the
last year the magazine’s survey was conducted.

Overall, retail sales average only 14 percent of these
providers’ revenues, but many said they are looking to retail to
replace revenues lost to recent Medicare reimbursement cuts and the
anticipated effects of national competitive bidding.

The survey numbers reflect another shift the majority of
providers reported: 68 percent find their customers are willing to
pay out-of-pocket for the equipment and products they need. And 51
percent said they have seen increased business from walk-in retail
customers over the past year.

Recognition that this retail gap is there to be filled–and that
it’s growing–is fueling plans for many of the home care companies
in the survey group.

–As a whole, providers said they are doing more advertising in
the retail area. Sixty-one percent said they currently
advertise/promote their retail products, and about half said they
now participate in vendors’ co-op advertising programs. Those that
do overwhelmingly said these programs are helpful, but also said
they would advertise on their own without any help from
vendors.

–One-third have expanded or remodeled an existing showroom
within the past three years, while a quarter have added a new
location with a retail showroom. Forty-four percent said they are
considering remodeling/expansion plans.

–Twenty-two percent said they now change their showroom
displays whenever new products come in. That number also has
increased dramatically, up from only 13 percent in 2003.

–Significantly more current respondents also track revenue
separately for retail customers vs. medical referral customers than
did in 2003, 55 percent vs. 30 percent.

In one side note, 67 percent of the providers in the survey
group as a whole said they intend to participate in competitive
bidding. But, of the surveyed companies with revenues under $1
million, only 43 percent indicated they plan to bid.

To gauge your retail business against that of other providers,
see HomeCare’s 2007 Retail Survey in the March issue,
available online at http://homecaremag.com/mag/medical_retail_survey/.