At Elyria, Ohio-based Invacare Corp., bariatric products represent a steady niche with few major ups and downs. The relatively sedate nature of the business may not thrill many providers, but Invacare’s Phil Cunningham—business manager, home care beds—said he believes it can be worth the effort for providers.
Many providers believe bariatric products require too great a capital outlay to explore properly, but those who know where and how to build referral sources are seeing success. “It appears cost prohibitive, but in the long run it can be a profitable business,” Cunningham says. “Providers often don’t know where to go for referrals. Go to bariatric centers—not just the surgery centers, but weight loss clinics and rehab clinics that focus on ACL tears. People come out of surgery, and they need equipment.”
Floor space is an additional concern, because most providers do not want a bariatric bed, commode or walker sitting on display for a long time. However, for those who have the space, Cunningham says that it’s a good idea to have at least one bariatric version to show patients that you have what they need.
“Bariatric patients should see some things they can use, maybe an extra-wide wheelchair or a commode with a larger seat area,” he says. “They need to be able to see there are things designed for them that don’t look so different from everybody else’s. It blends in with the normal-width product.”
Challenges to the Market
Deep into the second quarter of 2012, Joe Battiston—president of TFI HealthCare in Petersburg, Va.—says business has been good considering the challenges of manufacturing “low volume U.S.-made specialty items in a market that is saturated with high-volume imported products that are unfairly valued.”
TFI has been forced to raise prices due to tariffs placed on steel and aluminum raw materials produced and shipped from China. Meanwhile, the finished goods made in China from these raw materials are not tariffed. “This gives China another advantage over U.S.-made goods,” Battiston explains. “The only reason we are able to maintain the business while dealing with these adversities is the customers who care about quality and getting what they pay for. They don’t want to deal with inferior products that cause excessive callbacks. This costs more than you can imagine, upsets customers, leads to time spent by staff to correct the problem and replacement delivery costs, just to name a few.”
Like other “standard” product lines, the biggest challenge with bariatric products is trying to find equipment that actually performs the proper job for the patient. “There are products out there today that I would be concerned using at 185 pounds, and certain manufacturers put much higher weight caps on them,” Battiston adds. “We pride ourselves on quality, reliability and being able to trust the product will hold the weight. Providers should look for quality, dependability and longevity of the company’s products and reputation.”
With providers evaluating the merits of large and small manufacturers, differentiation is crucial. Ian Crawford, marketing and media relations at HealthCraft Products, Inc., explores a slightly different area of the market with the company’s SuperPole and SuperBar—equipment with a weight limit of 450 pounds. “While on the lower end of bariatric requirements, the SuperPole with SuperBar can be installed exactly where the product is needed,” he says. “It can assist someone rising from a favorite chair, beside the bed or beside the toilet. Our goal is to eliminate falls and provide quality products for independent living.”
Like the market for other bariatric goods, HealthCraft continues to see a steady increase in business, and Crawford says he believes that trend will gain momentum. “Simply put, the North American market will continue to see a rapidly growing bariatric market that for the most part is underserviced,” he says. “The biggest challenge is to find solutions to safely assist a growing population of bariatric customers. You don’t want to be competing with every big box store selling the same basic grab bars. Fortunately, the products that HealthCraft manufactures are entirely cash-based sales. They are not affected by the competitive bidding program.”
The same cannot be said for other bariatric products. Anything that falls under competitive bidding in the standard category also qualifies for competitive bidding in the bariatric version.
In response to the pressures of competitive bidding, Moshe Klerer, CEO of K2 Health Products, says that the bariatric market is mirroring much of the rest of the industry, with providers seeking ways around traditional reimbursement models and their myriad uncertainties. “They are getting nervous about the competitive bidding and managed care decreases in reimbursement,” Klerer explains from his office in Brooklyn, N.Y. “We are looking forward to a good year, but it will probably be different than last year. People are looking to add to their payor mix with good old-fashioned cash.”
For providers who carry commodes manufactured by Canoga Park, Calif.-based Big John Products Inc., 90 percent of transactions are cash. John Weisman, director of sales and marketing, says he thinks the trend will continue as the economy improves. “People are loosening their wallets a bit and spending for special needs or products that are beneficial to their daily existence,” he says. “People are not getting any smaller or younger. They need additional help in the restroom. Our toilet seat is what we consider to be the most inexpensive way to remodel a bathroom in minutes and make it more accessible to anyone in the household.”
Weisman acknowledged that providers must continue to deal with an overall shyness among consumers who may find it embarrassing to discuss the bathroom. Once these initial misgivings are addressed, making the sale is about filling genuine needs and doing right by the customer.
In today’s bariatric market, many customers have money and are willing to pay for quality products. It’s that willingness to pay for quality that Weisman says he believes will only expand the market. “We build a better product, made in America,” he says. “We build something extremely durable, high quality, easy and functional. When you take all those factors into account, we can separate ourselves on quality alone. A lot of products in the market are inexpensive, but you do get what you pay for."
Whether reimbursable or cash, Klerer says that multiple size offerings can win over vital referral sources. “Referral sources are looking for a one-stop shop for patients,” he explains. “Look for a manufacturer that carries a full product line. We are a cushion manufacturer. It would lead to confusion if some patients were on one brand and others on another cushion. If you’re carrying a brand with all the variables and sizes, you have one demo and you can pick it up and answer questions.”
Stocking inventory is one of the traditional barriers for home care providers who want to get into bariatrics. But there are ways around this problem. “With bariatrics, you have so many different size options that a retailer is going to have a problem with stocking every size cushion,” says Klerer. “Have one model of a bariatric cushion to show as a demo, and have a sign that says ‘available in all sizes.’ Distribution is nationwide, so you are usually only a day or two away from the product you need.”
Many manufacturers offer “just in time” inventory, which considerably reduces initial capital outlay and excess product occupying valuable warehouse space. Using the just in time model is one way to deal with underserved markets, which by all accounts are still out there.
Finding those markets can lead to solid growth. “Providers are not buying into it or exploring it enough,” says Cunningham. “There is organic growth to be had just with dealers building up referrals and getting out and educating referral sources and building the business. The market continues to grow and obesity rates are still climbing, as reports have indicated.”
Responding to Market Demand
Invacare has grown its product line in the last two to three years, but the real work started about eight years ago when the company brought on a complete line—wheelchairs, bath safety and beds. “We have done some things even in the long-term care world,” Cunningham says. “We’ve created bariatric products that look just like their standard size counterparts to increase dignity for patients.”
At Drive Medical Manufacturing and Design, bariatrics is also a growing business segment. Michael Serhan, a partner at Drive, says the company realized many years ago that it needed to be strong in the bariatric space. The Port Washington, N.Y.-based company responded with vigorous product offerings.
Like other manufacturers, each one of Drive’s product segments—hospital beds, walkers, power wheelchairs, cushions—all fall under the competitive bidding program. Serhan saw the concern firsthand at the recent Medtrade Spring show in Las Vegas, and he sympathizes with the plight of providers.
“We must deal in reality right now and prepare for reality,” he says. “And that is a competitive bid situation, which is not really competitive at all. It leaves people with a lower reimbursement, and we must come up with solutions for our providers in that scenario. If any of the other relief were to happen, we would obviously embrace it.”
Under any scenario, referral sources will continue to be the lifeblood of the bariatric market segment. “If referral sources have a patient who needs a bariatric cane, wheelchair or bed and they can’t find it all at one provider, it makes their life difficult,” Serhan says. “In this environment, a provider can take away those uneasy feelings and say ‘I can take care of that difficult patient in every aspect, and for that I’d like to earn the other parts of your business—the standard beds, standard wheelchairs—and other referrals you give out.’”
