Good Insurance

“You have to be an eternal optimist to be in this business,” proclaims California provider Cliff Woolard. And he is. Despite reimbursement reductions galore, the possibility of a 13-month oxygen cap on the table and competitive bidding to deal with, he says, “the demand for our product has never been greater.”

But even optimists take out insurance, and that's exactly what Woolard says he has done. After 15 years as a traditional provider, he has opened a retail store, “and I'm kicking myself for not doing it sooner,” he says.

“On the traditional HME side we are told what to provide, where to provide it and how to provide it. The idea of going into retail is almost like taking out a life insurance policy on your traditional HME business. It allows you more freedom to help people with what they really want — and they are paying cash.”

Not only that, a few weeks after opening, the new store was breaking even based completely on walk-in business from a sign. Woolard thinks business will be even better when he starts advertising.

I'm not saying — and Cliff Woolard certainly isn't — that every provider's entry into retail would be as successful. Woolard planned for a year, took six months to find exactly the right location and got help from consultants. Then there was the not-so-little matter of devising a totally different business model, one based on consumers and cash instead of referral customers and reimbursement. Ordering is different. Inventory is different. Vendors may be different. And there's an especially big learning curve when it comes to real estate.

The upside of the effort, however, can be huge, and rethinking Medicare business is something that most providers must be doing in a huge way as the government reshapes this industry.

“There are a lot of people out there willing to pay a fair price for the products they need, and that's a side of the business we haven't seen,” Woolard says. “I still feel the other side of HME is a viable source of business — we're coming off our best year — but this retail is a whole other thing. We've got people who are willing to pay money for something they need if their insurance doesn't cover it.