For years, many of HomeCare's contributors have called for providers to take advantage of the opportunities that exist in retail. Unfortunately, according to sales guru Louis Feuer, “Most HME dealers seem to find cash a foreign substance. They often have no place to put it or store it, and find those CMNs so much easier to deal with.”
Because over-the-counter sales are so unknown to some providers, Shelly Prial often quips that “cash” is not a dirty word. “The transaction is completed when money changes hands. No paperwork, no forms to fill out,” Prial says.
The jokes are funny, but they reflect reality. According to our recent Retail Survey (page 22 in this issue), revenues generated from retail sales comprise only about 14 percent of most HME companies' income.
Providers give lots of reasons for not developing this business: the population base isn't right; their building is in a bad location; there's not enough showroom space; the product mix is wrong; it would take too much of an investment in marketing or inventory or staffing.
Maybe so. Retail certainly isn't right for every single HME company, and it does take time, effort and sharp management. And, of course, there's the matter of a new focus for dealers whose model is based on medical referrals and professional services. But with third-party reimbursement on the way down, and consumer awareness of home health care products going up, retail seems a natural winner that deserves a fresh look. There are indeed no forms — and, no one controls your retail business but you.
In analyzing the results of our survey, consultant Jack Evans points out that drug stores already have been successful in expanding HME cash sales. Many now bank about $140 per customer in this category — that's in addition to any Medicare referral or rental sales.
“Dealers have got to have a new point of view about running their business,” Evans believes. “The problem with most HME businesses is that people walk in with a prescription, get their product and walk out. We aren't helping them improve their quality of life. We aren't helping them gain independence and dignity. If you qualify a customer and find out their medical needs and concerns, then you will find a whole array of products that they need.
“Providers have to learn that if they are going to be successful in HME today, they are going to have to meet their customers' health care needs, not just provide them with one product,” Evans continues. “It's a whole new concept.”
A new concept, an old opportunity. Are you ready for retail?
As you might imagine, our offices have been busy with calls and e-mails regarding Medicare-reform legislation. You can read about the new law and its expected impact throughout this issue. If you have specific questions, please let us know, and we will add them to our list for future coverage.
