BIGGER IS BETTER

As your organization looks toward 2008, it is a good time to evaluate your performance for 2007 and get ready for next year's growth. Take the time to review where you stand and plan for the changes your company will need to make to be in a great position to grow your revenue.

There are three strong tools that can be used to evaluate your business: (1) strategic thinking; (2) forecasting; and (3) sales planning and monitoring. These tools will work for a home medical equipment provider of any size, from a very small privately held company to a large public firm.

1. Strategic Thinking

   Strategic thinking is the process in which you analyze what your organization does well — and what it does not. There are several areas that should be considered:

   • Product Line Concentration

     Many HME companies are reliant on a few core product lines, including oxygen, sleep apnea, beds, support surfaces and rehabilitation. While these core lines represent a great opportunity, managers need to be cognizant of the degree of diversification that should be maintained in the business. Is your company too reliant on these core lines? Should you think about expansion into other lines? Think about how you want your business to look a year from now. Do you want more or less reliance on oxygen? More or less reliance on sleep apnea?

   • Reimbursement Mix

     The average mix of reimbursement in the HME industry includes about 40 percent Medicare. But this segment is under siege. Should your organization ramp down its reliance on Medicare? Should it be closer to 20 percent? Or, do you want to continue to bet on this segment at least through 2008 because your geographic area will not be part of competitive bidding? Do you think that you can win a bid?

   • Geographic Coverage Areas

     Providers need to segment between home deliveries and shipping through common carriers. Not every product needs to show up on the same day.

     What are those products that need to be delivered and those that can be shipped? Has your company developed the procedures and guidelines for the most cost-effective delivery of products? How far can your drivers go, cost effectively, within your geographic area? Could they go farther than you expect? Do you need to rethink how they stock their vans? Could they be mini-delivery and repairmen?