HME providers from coast to coast are feeling the pain of lower reimbursements from Medicare and facing the prospect of even more cuts with competitive bidding again on the horizon. The climate has been tough on the scooter business, although shrinking margins have not slowed the pace of innovation among manufacturers. These suppliers see opportunities for HME providers in Advance Beneficiary Notice (ABN) upgrades or cash sales to a growing, and sometimes more affluent, baby boomer population.
“I'm somewhat jaded against Medicare reimbursements for scooters,” says Mike Serhan, executive vice president, Drive Medical Design and Manufacturing. “Medicare has made it very difficult. It's not really as profitable, especially after all the hurdles you have to go through.”
However, he adds, “The scooter market is going to grow one way or another. If you restrict [your sales] to government reimbursements, you are doing your business a disservice. If your business is efficient, you might be able to make thin margins [from Medicare], but it's very difficult.”
“Scooters have always been on the lower end of the reimbursement scale, which will only be exacerbated by competitive bidding,” agrees Cy Corgan, national sales director, Retail Mobility, Pride Mobility Products. “This doesn't mean that there won't be a market for scooters. In fact, the market should expand greatly. The bottom line is that providers should stock a basic version in each Group 1 code and add scooters to their inventory based on clientele and market.”
Terry Preston, vice president of sales for Leisure-Lift, warns against compromising quality to meet Medicare's low payment level or to promote cash sales. “Low-margin products such as travel scooters can overwhelm a dealer's service resources if it is a poor-quality product. Return to quality is an avenue to overall profitability if you consider the cost of servicing the product as well. You may not be making enough margin on inexpensive products to pay for the service costs.”
According to Les Brandeis, director of sales, Merits Health Products, “it is up to the manufacturer to help design scooters that can be sold in a retail environment. This would mean more portable or travel-type scooters, which all of us make but each one offers different features.
“At present, the market has enough of these. It will be up to market trends to see how we will either redesign them or stay the same. Manufacturers can help by offering a very competitive scooter at a good market price.”
“Decreases in scooter reimbursement are making it increasingly difficult for providers to be profitable on reimbursed scooters, and this is driving down the market,” sums up John Koster, product manager, Consumer Power Wheelchairs and Scooters, Invacare Corp.
“On the bright side,” he continues, “the increase in the aging population and number of retirees with disposable income are having a positive effect on the cash-sale side of the scooter market. Providers need to focus on attracting cash-sale customers and growing the retail side of their scooter business.”
Technology on the Rise
Indeed, manufacturers say, transportability seems to be one of the most important features in scooter-buyers' minds. People want to take their scooter to the mall or when they travel, so manufacturers are continuing to work on ease of transport.
“Generally the market is trying to look at the consumer's needs related to transportability and aesthetics,” says Serhan. “Manufacturers are coming out with scooters that are more visually appealing.”
There have also been advancements in technology, such as motors, electronics, batteries and chargers, to improve the function, performance and serviceability of manufacturers' products, notes Corgan. “The result is that manufacturers can build in features that were previously unavailable.” For example, he points to the company's Go-Go Elite Traveller and Victory series that are equipped with one-hand disassembly and lightweight, low-profile non-scuffing wheels.
Merits' Brandeis sees scooters changing to more aerodynamic styling. The company has also increased the speed offerings on its models (ranging from 5 to 12 mph) to allow patients to travel faster and farther, and weight capacities have increased to accommodate the growing number of obese patients. Available accessories include baskets, holders for oxygen tanks and canopies to protect from the sun.
Scooter seats are getting larger and more comfortable to accommodate users up to 300 pounds who want the comfort of a larger scooter with the convenience of a travel scooter, says Koster of Invacare.
Convenience features such as quick-adjust tiller positioning, charger ports located in more accessible locations, sliding seats for adjustable legroom and headlights and lighting packages are becoming more popular, he adds.
Currently serving the market with a line of microportable take-apart travel scooters and a compact three-wheel scooter, the company is in the process of introducing a new and improved seat on these models, and will increase the weight capacity of the three-wheel scooter to 350 pounds. Invacare expects to launch new mid-sized and large scooters this summer.
DuWayne Kramer, president of Leisure-Lift, says his company has made multiple improvements to its products, including a better turning radius on its Fusion model, making it easier to maneuver indoors and more stable outdoors. The Fusion comes in models for bariatric patients up to 500 pounds.
Kramer notes custom scooter options to meet specific customer needs, including custom seating for bariatric patients and even “stretch” scooters.
The built-in charger on the Fusion can be switched from 120 volt AC to 220 volt AC for travel. Other features include built-in diagnostics to help dealers solve service problems over the phone (using audible error codes).
Another extra is the use of programmable controllers in an age when many scooters are being “dumbed down,” Kramer says. “People are trying to cut costs and going away from those things, a trend that can cost the dealer money [related to service],” he says.
“From a design standpoint, we operate under the philosophy of continuous product improvement. We analyze warranty and non-warranty repairs every month and have quick access to our manufacturing center to make changes as needed,” says Leisure-Lift's Preston.
“Wherever a product is made, you have to have the right quality control so that what's coming off the line is the right product,” comments Drive Medical's Serhan. The company offers a second stackable battery that can double the distance range of its scooters. Being able to remove the battery using a lunchbox-type handle simplifies recharging, as does a charging port located up high on the scooter for less reaching, he says.
The use of common parts across a product line — for instance in a travel scooter and a mid-range scooter — can simplify service issues, as can the ability to program electronics. “The cost difference among models is added features. The motor on a travel scooter needs to be as reliable as a larger scooter,” Serhan says.
Moving More Scooters
Providers should be creative with their direct marketing, and they should focus on upselling their scooter customers as much as possible, suggests Koster. Ideas such as bundling scooters with lifts and/or ramps will get new customers in the door, and upselling accessories along with every scooter sale will maximize profitability, he adds.
Providers should make sure their staff is well-versed and up-to-date on the procedure involved with an ABN, says Pride's Corgan. “This knowledge makes it possible for clients to upgrade their scooter purchases, obtain a scooter that is not covered or obtain a specific scooter if medical necessity is not met. This can generate additional revenue opportunities for the provider.”
If they are not already, providers can also reward staff for selling the most profitable products in each category and for sales bump-ups or package sales that include a lift or ramp, he suggests.
“When someone walks through the door, make them feel they came to the right place,” advises Serhan. “Don't carry just one brand. Have a broad choice of product offerings, both in terms of type of scooters and of manufacturers. If you show up to buy a car, you don't want there to be just one car in the showroom.
“For a typical brick-and-mortar provider, I believe it is good to have both a showroom and a presence on the Web, if for no other reasons than to educate the customer about your product,” he adds. “Make someone comfortable with the scooter. It's new to pretty much everyone. Make your customer comfortable with the [scooter's] purpose.”
“Dealers are finding a more educated population of patients, asking better questions,” notes Preston. “The dealers who provide better education, personal assistance and higher quality over time will succeed.
“Patients are looking for the best quality they can get for the dollar. They are learning that some of the low-cost products won't meet their needs. It is important to pay attention to the patient's needs and match them to the right product.”
Providers must be educated as well, Kramer says. “The dealer has to be able to explain to people why this is a better product after listening to their needs.”
Experts Interviewed
DuWayne Kramer, president, and Terry Preston, vice president of sales, Leisure-Lift, a div. of Burke Inc., Kansas City, Kan.; Mike Serhan, executive vice president, Drive Medical Design and Manufacturing, Port Washington, N.Y.; Les Brandeis, director of sales, Merits Health Products, Cape Coral, Fla.; John Koster, product manager, Consumer Power Wheelchairs and Scooters, Invacare Corp., Elyria, Ohio; Cy Corgan, national sales director, Retail Mobility, Pride Mobility Products, Exeter, Pa.
