LONGMONT, Colo. — It's been a year of change for Sunrise Medical and more of the same likely lies ahead, according to Thomas Rossnagel, the Longmont, Colo.-based company's new president and CEO.
As HME manufacturers and providers attempt to navigate the industry's treacherous waters and avoid running aground, some, like Sunrise, are resetting their courses. Last year, Sunrise took a hard look at its business, decided to focus on mobility and seating and in November divested its U.S. and Canadian Guardian product line (sold to Medline Industries). In May, the company announced it was exiting the Group 2 wheelchair market to focus on complex rehab.
And this month, Rossnagel took the helm at Sunrise, succeeding Michael N. Cannizzaro (who will continue as chairman of the board of directors).
So where does Sunrise go from here?
Rossnagel, who earned kudos for being an excellent strategist as the senior vice president and managing director of Sunrise Europe, sees some rough waters ahead, he told HomeCare Monday, but he believes Sunrise is now in a better position to ride them out.
Q: What are your goals for Sunrise in the coming year?
Rossnagel: Sunrise is a dynamic company and continuously improving what we are doing. I believe that change, per se, is a good thing, if it is to the better. The recent changes [at Sunrise], the divestiture of certain businesses and exiting certain product lines, were predominantly geared around our U.S. business. These activities help us become a more focused and more profitable company in the U.S.
Our customers in the U.S., on a broad basis, applauded us for this and have assured us of their continued support. You could say that this speaks for itself. On that basis, we are confident to become even stronger in the U.S. with regard to our core rehab manual, rehab power and seating/positioning business.
Q: Can you talk about what the next level is for your company?
Rossnagel: The future will show what else we will have to do in order to grow further, both top-line and profit-wise. In the U.S., the market has followed all the changes our U.S. commercial team ... has implemented, and we are feeling the increasing trust of our customers in what we do on an almost daily basis.
In other parts of the world, we are very successfully competing in certain areas that we have decided to exit in the U.S. In fact, in Europe, we are very successfully competing in product lines we have never been able to compete in within the U.S., such as scooters.
We are thinking globally, but executing on a regional basis. Sunrise's expectation cannot be anything less than to be within the top three competitors in all the segments we are competing in, worldwide. The regional strategies that lead to this goal can vary, and there is nothing wrong with this, in my opinion.
Q: How do you think the home medical equipment industry will evolve over the next year?
Rossnagel: The future of the HME industry is very difficult to predict. A lot of things speak to the fact that there needs to be consolidation, especially when considering the overcapacity in our industry.
However, this is something that has been discussed many times over since I joined the industry segment over 13 years ago and, in reality, it has not really happened yet on a true, broad scale. Hence, I assume that in the near- to mid-term, it will be about staying very innovative and competitive to cope with the challenges on hand and ahead, while always keeping an eye on the consolidation opportunities that may arise.
I am optimistic that the leaders of this industry, be they manufacturers, dealer customers, institutions, reimbursement/funding organizations or others, will find ways to cope with the dynamics of this environment. This is our responsibility to our patients and end-users as well as our associates and the shareholders/financial sponsors. This change likely will be painful.
We are missing the influence that other industry segments enjoy, which helps them maintain and, in some cases, even increase their relevant funding pools. Having said this, I do appreciate that no reimbursement system on this globe is able to spend money it doesn't have available to them, but if you look at how many wheelchair-users are underprovided with regard to the product they get funding for, this is concerning to me.
The overall cost to the health care system on an ongoing basis to address the consequences far exceeds the "savings" that have been realized on the individual product. I am not criticizing the reimbursement systems for this, but do believe that our government leaders worldwide should rethink the funding approach and develop a transparent methodology that fosters more of an integrated approach while looking at the "total cost of ownership" more than the "purchase price."
This will take time, but I am confident we will get there because we have to. Societies and governments, in my opinion, should take care of their people as one of their prime duties. Sustainability is an important piece of this. We need to especially treat the elderly population, who need medical aids, with the respect they deserve, recognizing their lifetime contribution. Each of us should be aware that something could happen to us any day that could change our lives and make us reliant on the meaningful provision of a medical device.
