HomeCare has published any number of articles on the promise of retail in HME. I know, because I've either written or contributed to a lot of them. So has Jack Evans, one of the industry's recognized experts in the sector. We've done survey after survey on the subject, and Jack has often analyzed the results, laying out step-by-step how providers could use the statistics to measure and improve their own retail sales.
This month, he does it again. In an article called “Profit from Retail in HME” on page 12, Jack not only discusses the secrets to some retail providers' success, he also reveals the retail benchmarks that differentiate these companies from their traditional HME competitors.
I believe wholeheartedly in the retail concept for medical equipment. As a baby boomer, I've grown up at shopping malls simply pulling out my wallet and buying whatever I wanted (within reason, of course; I still don't have that villa in the south of France). I intend to do the same thing when it comes to my wheelchair or my cane. I'm with billing consultant Jane Bunch on this one. If I've got the choice, just give me the one with the pink sparkles.
The thing is, although the future for retail HME seems unlimited at this point — after all, there are a whole bunch of baby boomers just like me who are ready to spend money on quality of life and staying active — it's not without pitfalls. You've got to offer customers the right merchandise at the right price in the right place at the right time. And you've got to get all of those things right all of the time. That's a pretty tall order.
Plus, it takes a good bit of fortitude to move into a totally new business model with new products and new vendors, and away from the reimbursement checks you've relied on, maybe for decades. Courage is what California provider Mike Kuller says he summoned up when he decided to take the retail plunge.
After recognizing that he was going to have to overhaul his traditional HME, which he founded in 1999, Mike also realized that with the Medicare changes coming down, an overhaul alone might not be enough to keep him in business. So he came up with a plan for a retail store, hired Jack to help, and you can read the rest of what it took to get that plan from paper to brick-and-mortar in Mike's “diary” on page 18.
Mike's is only one of the stories we're beginning to hear more of about venturesome HME companies that are moving completely into retail. With competitive bidding now snowballing down the hill, I expect we'll hear more.
The point is, Medicare is not exactly into canes with rhinestones, but plenty of customers like me might be. Medicare is into delivering only basic products through fewer home care providers who get paid less, when baby boomers want convenience and service and quality equipment with bells and whistles, and all of that costs more.
There's about to be a giant collision here, and its name is competitive bidding.
It's not for every provider, but retail HME is an obvious path that many in this industry can take to move out from under Medicare's thumb and off the path of the coming train wreck. As Mike Kuller notes about competitive bidding, “My retail store now looks like a genius move. Who would have guessed 32 percent cuts?”
