As usual, there is a heaping helping of challenges on HME providers' plate: the oxygen cap, the 9.5 percent cut, the post-cap payment rules, a $50,000 surety bond, any number of other reimbursement and regulatory changes and, to top it all off once again, the impending threat of competitive bidding. It's hard to imagine 2009 could be tougher than 2008, but that's exactly how it's looking so far.
And that's exactly why I was surprised when industry consultant Jack Evans asked me what I thought about HME franchising. It's always been an intriguing concept, but now, I asked? In this environment? Of course, he replied. Now is exactly the time for providers to think about new ways of growing revenue.
Consultant Miriam Lieber recently told me she thought HME companies should be staffing up. Now, I asked? In this environment? Sure, she said. With an abundance of job-seekers in the market, now is exactly the time for providers to take their pick and hire on. These people will bring an eager attitude, fresh ideas from the industries in which they have been working and may come in at well under what their qualifications would normally command.
Consultant Velma Goertzen, a well-known industry veteran and former manager of a successful HME company, shared another thought. She believes providers should jump on the staff development bandwagon with both feet. Now, I asked, when some providers are wondering whether they will even be able to stay in business? You bet, she said. The employees are exactly the people who can pull those businesses through.
I'll admit it takes a bit of attitude adjustment to catch up with these consultants, especially with the crunch HME providers are in right now. But they are not looking at HME business the way it has been; they are looking at how this industry is going to change, and at how providers must change to remain in it.
Although you can usually find him giving advice not to providers but to the industry's manufacturers and investors, consultant Terry Pageler's perspective brings into razor-sharp focus the issue of doing business in the “same ol'” manner. Those looking at the market from the outside, such as those hoping to bring in new technologies, he explained, generally hold a largely unflattering view of providers, describing them at best as risk-averse. As an example, he wrote in a recent note, “I have a press kit for a new technology. One that will revolutionize oxygen delivery in times of declining reimbursement. It's circa 1997.”
More than a decade later, few have embraced the solution, although POCs are now offered by a half-dozen companies. But such an investment now, I asked, when HME owners need to be preserving their cash? “Providers have opportunity before them,” Terry replied. “This is a prime market to be in and new technology companies are eager. But will providers demonstrate that they can serve as the enabling channel, or will they continue to steer themselves and the market with the rear-view mirror?”
I think these consultants are right (and you can read more about their reasoning in this issue). It is becoming increasingly difficult to try to protect business the way it has been. While patient needs may be the same, the way those needs are served is being shaped by reimbursement pressures and guided by advancing technology as the country moves toward a health care delivery system that will — I'm sure we all hope — function better. The reality is there are probably many more changes to come.
It's a painful shift, but “that's the way we've always done it” just doesn't work anymore. If you are an HME provider, particularly if you are an oxygen provider, you are going to have to hit one out of the park this year. You can't afford to let any idea go unnoticed or any possible revenue source, no matter how far-fetched or impossible to achieve it might seem, go unexplored. As the consultants tell us, it's time to grab hold of the growth and opportunity this new scenario presents. It's time to harness the power of now.
