Bidding has ripple effects beyond provider

Tuesday, January 31, 2012

Through a combination of luck and persistence, provider Robert Salmon has "grown a nice" diabetes supply business in rural Tallahatchie County, Mississippi.

But it's more than just a nice business for himself and his employees, he's learned. It turns out that his company, The Diabetic Shoppe, has a large impact on the local economy, according to a recent economic impact study by Mississippi State University graduate students. The study found that for every dollar generated by the provider, it adds an additional 27 cents, or $2.1 million to the local economy. It also generates local and state tax revenues of $576,339.

"We were really surprised that a company the size of ours can have such an impact on the local community," said Salmon, president and founder of the Charleston-based company.

The study also highlights the impact the provider has on jobs in the region. The Diabetic Shoppe, the third largest employer in this county of about 15,000, has 60 employees. Another 85 jobs are dependent on the provider by way of those who supply directly to the provider and those who supply to its suppliers.

"If we reduced (our workforce) by 10, then there's another 24, more or less, that would ultimately be laid off," said Salmon. "(For instance) we have a printer. They are almost in business just because we are. We are not their only customer, but without us, they probably wouldn't exist for very long."

In addition to diabetes testing supplies, The Diabetic Shoppe does therapeutic shoes and inserts, and CPAP. Still, if the provider doesn't win a mail-order contract, he stands to lose several million dollars "overnight," he said.

"That's a lot for a small business," said Salmon. "Let's do this auction in a fair minded way so we have an opportunity to say yes or no, but not this all-or-nothing deal where we will most likely be shut out."

With a lot of focus in Congress these days on creating jobs, Salmon finds it hard to fathom why such a job-killing program is being allowed to continue.

"We are talking constantly about jobs and helping small businesses thrive, and they are running a program that will slam the door on thousands of small businesses," he said. "Our politicians need to understand what happens when you put hundreds and even thousands of businesses out of business." HME




great article! I wish more people were aware of the upcoming competitive bid and the facts behind it all. It still amazes me that polititions have let it go this far. Reality is this will end up costing medicare more money because studies show in round 1 that 75-80% of the diabetics arent getting supplies anymore and the others are now going to their pharmacy which medicare pays much more for the supplies. The 75-80% will end up with costly health problems costing medicare more in the end. thanks, leslie :)

Yes this article helps spell things out. The durable medical equipment industry used to have jobs and those jobs contributed to the economy. Those jobs also contributed to the federal tax coffers as well as state and local taxes.