How many home medical equipment companies look for ways to increase revenue by examining existing patients? Unfortunately, not enough. But for those who do, that examination often results in the opportunity to provide patients and caregivers with equipment or supplies they might not otherwise know they need. Moreover, for the provider, looking inward provides an opportunity to create revenue that goes directly to the bottom line.

Obviously, to engage in this existing-patient analysis, you first must determine how much revenue you currently capture per patient. Once you have this information, you can focus on how to increase sales for existing patients and set a goal for your business, such as increasing revenue by 20 percent within the year.

Target Customers by Ailment…

One way to increase revenue per patient, especially for providers with a retail focus, is to examine patient census by disease. First, generate a report that examines primary diseases such as diabetes. Then, look at the profile of your diabetic patients. Where are they in their disease progression? Stable, progressing rapidly, end stage? From what types of products might they benefit? How could you decorate a corner of the store for diabetic patients who currently use blood glucose monitors and supplies?

According to John Balch, president of Pharmacare of Cumberland in Cumberland, Md., diabetic supplies can be used as loss leaders. “Why not put everything in front of the customer?” he asks. Balch firmly believes that if you expose customers to what they might need, especially for comfort and convenience, they inevitably will find something to buy. He carries diabetic shoe inserts, sharps containers, hand and antibiotic creams, diabetic socks and more. And all of these items fit into his 3-foot counter display.

This technique has had a profound effect on Pharmacare's bottom line. “In a three-month period, a provider can easily add $200 in revenue for every diabetic patient,” Balch says.

Balch is even more convinced that this business will grow after April 1 — when patients no longer will be allowed to submit their own claims to Medicare. Pharmacare already is marketing this change in the community.

So how does someone like Balch find the existing diabetic patient? He starts by generating a report that examines all his patients, using ICD-9 codes. Then, Balch matches patients' diagnoses to current and previous sales, which shows the potential for companion sales. Finally, he compares the previous month's revenue to the current month's revenue.

By Location…

You also can use geography to generate revenue, by determining which of your customers live in rural areas and which live in urban areas.

The rural customer may not come directly to your store for supplies consistently, but may instead have the supplies delivered each month. For this type of customer, a direct-mail campaign may promote companion sales. For urban customers who visit the store, visual aids may work to increase sales.

Urban and rural customers also are prone to different diseases, which is another reason to examine geographical sales. For example, urban customers may have a greater need for nebulizers because asthma is more prevalent in densely populated areas. If you were looking for customers who might benefit from an ultrasonic nebulizer, you could target the inner-city population. By using a ZIP code search, you can find this geographical information easily.

By Season…

Seasonal sales also can bring in extra revenue. Mother's Day and Father's Day scooter and lift chair sales, for instance, can add thousands of dollars to a your bottom line. “While scooters are not big sellers in the winter months, we sell many in the spring and summer,” says Velma Goertzen, R.N., and general manager of Health-E-Quip in Hutchinson, Kan. Goertzen also offers promotions during certain months. For Breast Cancer Awareness month in October, she highlights particular women's health items such as wigs and hats. She also hosts a special tea for the mastectomy community. Goertzen claims that retail sales — generated by special events — make up 25 percent of the company's total revenue.

To pinpoint seasonal or special events customers, Health-E-Quip needs only to generate a report that tracks diagnoses, such as breast cancer. Goertzen generates this report in August so she can advertise the program to customers for October. By using Health-E-Quip's annual marketing plan and database, Goertzen is able to focus attention on specific patients at specific times of the year.

Jim Cammack, owner of Jim's Pharmacy in Port Angeles, Wash., also likes to market seasonally. In Port Angeles, the skies are usually so gray that people become depressed, especially during the winter. During this season, Cammack stocks light therapy equipment that rents for $120 per month and requires light bulbs that sell for $6 to $12. These products have been amazingly successful for him, especially because customers seeking light therapy equipment also buy stress-relief products, such as fountains that retail for between $40 and $100.

Or By Equipment Needs…

Another way to increase sales for reimbursable products is to conduct a database search for specific equipment needs, such as hospital beds. For every hospital bed you sell or rent, you also can sell sheets and gowns. Though sheets and gowns may not seem to be revenue drivers, if you sell a $15 gown and $15 sheets to each of your 200 bed patients, you could increase revenue by up to $6,000.

According to Cammack, eight of every 10 of his bed patients buy sheets. His delivery technicians keep a supply of sheets in their vehicles and simply ask if the family has sheets that fit the bed properly.

Many bed patients also may use other equipment such as wheelchairs or oxygen. If so, consider that wheelchair patients might need backpacks or cushions, and that many oxygen patients need nebulizers.

Think Outside the Box

By using existing data and providing training for staff members, both retail and non-retail operations can generate additional revenue from existing patients. After all, increasing sales from existing customers is five times easier than finding a new customer. Take a little time to think outside the box, and measure your success. You will be pleasantly surprised!

Miriam Lieber is president of Lieber Consulting, specializing in operations management and reimbursement for the home medical equipment industry. She can be reached via email at mllieber@pacbell.net or via phone at 818-789-0670.