Could there be a vibrant new opportunity lurking in the starched garments of work uniforms? Randy Wolfe asked this question more than 15 years ago, and today the specialized duds represent more than a third of his business. But Wolfe says whether it's in uniforms or DME, success requires independence, honesty — and diminished reliance on Medicare.
As owner of Tennessee-based Lambert's Health Care, Wolfe believes his model is ideal in today's business climate, but he didn't always feel that way. In the mid-1990s, he had six locations in the state when things started to go sour with TennCare, a state Medicaid managed care program that has had more than its share of fiscal problems.
Heeding lessons learned from dealing with the TennCare system, Wolfe deliberately shuttered four of his locations in 1998 and decided to expand retail sales at his remaining stores in Knoxville. More than a decade later, Medicare accounts for just 10 percent of the revenue at Lambert's. The change has not always been easy, but Wolfe says it gives him peace of mind.
Unafraid to take chances, Wolfe and his wife Elizabeth invested heavily in the non-medical side of the business, specifically uniforms, which became a thriving endeavor on its own. Now the clothing for nurses, veterinary technicians and other medical professions represent 35 percent of Lambert's total sales.
Wolfe says that it was really Elizabeth who took to the uniform trade and made it her own. "It was about 1993 when we got into this, and it was a time when uniforms were becoming fashionable and going away from dreary prints," recalls Wolfe. "We took the high-fashion approach, and we have built this cash business in that way. Our local market was appropriate for this."
Appropriateness is ultimately the key, and Wolfe says that even today uniform businesses in America are still fairly small, with limited sophistication. Using tricks of the trade that he developed from the retail side of the home care business, Wolfe and his wife brought crucial savvy to inventory-intensive uniform selling. With uniform styles often obsolete after just four months, the fashion-conscious uniform buyer resembles a purchaser of women's clothing. If too many uniforms are on hand — or too few — money will quickly be wasted.
Fortunately, the CPAP business is not quite so tricky, and sleep also has the added benefit of greater reliance on private insurance, says Wolfe. The remaining 65 percent of Lambert's business on the medical side goes mostly to retail, such as products for activities of daily living (ADLs), with PAP devices rounding out the respiratory side.
"We do have an ATP on staff for wheelchairs," adds Wolfe. "We sell power wheelchairs, scooters, orthotics, hosiery, bath safety and typical rentals such as beds. After so many years of having and losing business, and being involved in so many regulatory battles, we have deliberately set up this product mix."
Standing Up for Home Care
It's appropriate that Wolfe lives in the Volunteer State, because for more than two decades, he has spent countless days in Washington, D.C., and in his home state lobbying on behalf of HME providers and patients. As a member of the American Association for Homecare's competitive bidding task force, Wolfe battles the government program, which he calls "probably the most wrongfully designed thing that we have on our plate."
Like so many advocates, Wolfe has witnessed the relentless focus on fraud and abuse in the mainstream media.
As chairman of AAHomecare's Stand Up for Homecare initiative, Wolfe is raising money for public relations efforts to turn opinion among voters and legislators.
"You can go find a pirate in any industry, and they blame our industry for problems that are common in all sectors," laments Wolfe. "Where are the other stories that could be told? Blaming the industry for some of those problems is like blaming the tree for the sins of Adam and Eve. I am most frustrated by the fact that CMS has had such a terrible time figuring out how to keep up with their role in this industry. Their answer to a lot of these problems is more rules and regulations, such as competitive bidding, but they are not effective rules and regulations."
The uncertain business climate, along with the continuing unknowns of health care reform, would seem to be deterrents for many young people — including Wolfe's own daughter. Handing down the family business may have a long and illustrious history in the United States, but how many 20-somethings would take a look at today's HME industry and opt to take the reins? It's hard enough to run a business successfully, but if your father is Randy Wolfe (past winner of HomeCare's HomeCaring Award), a tradition of advocacy is also part of the deal.
For 28-year-old Ashley Plauché (Wolfe's daughter), visiting Washington was actually a plus, and one of the reasons she got involved with home care. As an advertising major in college, she wanted to use the power of media and public relations to sway public opinion and bring attention to advocacy causes. "I originally thought I'd save polar bears, but soon after graduation my father said he was going to Washington, D.C.," remembers Plauché, who now serves as director of marketing and government affairs at Lambert's.
"He sarcastically said, 'I know you wouldn't be interested in this at all, but I'm going to Washington to fight for seniors' rights to live at home and choose home care instead of being forced into a nursing home. You wouldn't want to come along and be an advocate for seniors, would you?' I was instantly hooked."
As a dad, an employer and industry champion, Wolfe gives Plauché the opportunity to spend time developing campaigns, meeting with legislators and volunteering for leadership roles to help the industry. "When I get frustrated with the bureaucracy … he helps bring me back to why we do what we do," says Plauché. "As his preacher eloquently says, 'When you know the why, you can put up with the how.'"
Over the past several years, Wolfe and Plauché have developed a daily ritual of sorts. They often eat lunch together and discuss home care, politics and how to change the world over Chinese food and iced tea. They don't share the same political opinions all of the time, but father and daughter are ultimately able to challenge each other to think and evolve. Both believe that home care is essentially a bipartisan issue, and no matter which side of the aisle you're on, common ground can be found.
Growing up, Lambert's was the sixth member of the family in many ways. "My sisters and I didn't come to understand the value of Lambert's and the role it played in our community until much later," says Plauché. "For us, the products were simply toys to make new games with, like racing each other across the warehouse using crutches. One of my most fond memories is the day my sister and I convinced our parents to adopt the puppy an employee brought to work. We drove one of the rental scooters around all day at work with our homemade signs that read, '"This puppy needs a home — ours!'"
"I never dreamed that any of my daughters would be attracted to this," says Wolfe with a chuckle. "However, after a trip to Washington, Ashley was on board. She has always been close to my parents and my wife's parents, and she has always been fond of elderly people. She loves what our business is able to do for older people."
Now with several years at Lambert's and a keen business sense of her own, Plauché is looking toward the competitive bidding marketplace and warily evaluating the landscape. Several MSAs in Tennessee, including Knoxville, are included in Round 2.
"It would be nice to say we absolutely are not going to worry about it and just not bid, but even with only 10 percent of our business as Medicare today, we do not know the future well enough to be cocky about it," says Plauché. "So we will give it a try, but it's not a do-or-die situation for us, and our bids will reflect that."
Low Medicare billings have been the case for a while now, but in the early days, Lambert's had an 80 percent Medicare reliance. Over time, the company has purposely and aggressively looked for other types of private pay and commercial revenue to offset some of the constant risks with the government program. "The key to making this type of transition is to first recognize that Medicare is no longer what it used to be," laments Plauché. "It has changed drastically, and the risk associated with it is far more significant than years ago. To transition away from a Medicare-dominant payer mix, dealers must force themselves to be honest and open-minded to what is going on with Medicare. Once you see that, you find ways to not rely on it."
At last year's Medtrade, Randy Wolfe spoke about what it takes to diversify into retail and other non-Medicare areas as a strategy for surviving the current industry climate. He also addressed the advocacy efforts of AAHomecare and others, while stressing the importance of speaking with a solid, unified voice.
Wolfe thinks this is where the Stand Up for Homecare campaign can help. "We must focus attention on the big picture that shows how truly valuable home care is to this nation and what an opportunity it offers our ailing health care system," he told show attendees.
Plauché believes that getting more young voices in the mix can be helped by generating leadership opportunities via new outreach efforts. "My generation looks for work that is purposeful and meaningful," says Plauché. "We want to participate but need to be 'plugged in.' I became involved in these organizations largely because Randy and our company management have always believed that this is important for our future.
"Other industries may not require this level of participation and involvement, but ours does — and we need to own up to that fact. Our trade associations and various industry organizations must do a better job at addressing this. All groups must do a better job at developing and grooming the next generation to become leaders."
