Box: Diabetes supply
New reality: Medicare competitive bidding has fundamentally changed the diabetes supply market by whittling down the number of authorized providers and setting prices that are often below cost. Many are exiting the business altogether, though those who are sticking it out are seeking creative ways to wring out enough costs to be profitable.
MADE IN CHINA
Import influx: Cellar-level pricing matrices have led to a flood of imported diabetic supplies manufactured in the Pacific Rim. While some vendors doubt the quality of these products, others view them as safe and adequate for patients.
Seeking alternatives: HME companies shut out of diabetes supply by competitive bidding may want to partner with other providers in an accountable care organization or focus on retail supplies that diabetics commonly use, such as wound care, skin care and ADLs. Some companies are revisiting the ostomy and urology market to maintain contact with valuable referral sources while they pursue other sources of revenue.