Charity: A silent victim of competitive bidding

Friday, September 25, 2015

So much air time in our industry is spent on the tremendous loss that providers and related entities are enduring because of forced market consolidation. We know firsthand that competitive bidding creates a downward-spiraling cycle of sub-standard, less-individualized home care for people who depend on Medicare.  

There’s a hidden victim, though, in the competitive bidding free fall. It’s your local non-profit that supports the families you serve.

Charitable Groups Are Running Out of Charity

Condition-focused nonprofits are reeling from the blow of competitive bidding in such a serious way that many are financially struggling to exist. Like you, all of the charitable organizations who help people with disabilities and chronic medical conditions are being forced to find new ways to keep going. Some are nearer to the brink of collapse than others.  

Please know that I’m not a financially-oblivious, tree-hugging socialist.  I know you want to help their cause but are struggling yourself. I’m on your side.

Yet, it’s also undeniable that nonprofits fill a gap when the hospital stay cuts off and the insurance runs out. Charities that serve people with spinal cord injury, congenital birth defects or other medical needs step in when the hospital sends that individual home, showing the person how to cope with their injury or condition and how to build a life in spite of it.

Without the bridge provided by these organizations, so many people impacted by disabilities or chronic conditions would have nowhere to go for advice, support and resources in moving forward.

The Untold Impact of Missed Connections

Historically, nonprofit organizations that serve HME customers have naturally turned to HME providers and manufacturers for help in funding their programs. Naturally, your customer is their member. But while our industry is being forcibly downsized from 36,000+ care providers to less than 6,000 today, charitable contributions are drying up faster than a liquor store during Prohibition.

As a market adviser, I interact with a lot of companies who are surviving competitive bidding by moving to the model of no-frills service that is demanded by slashed reimbursement. 

Large providers and manufacturers with centralized operations aren’t as close to the local market. A shocking number don’t have anyone who uses their products working in their building. Fewer and fewer bid winners that provide national service have feet on the street, as they are moving to phone-based sales and limited customer support due to margin restraints or shareholder demands.

Companies like these rarely see the overall impact that their operational shift has on small-town charities, because unlike a local HME provider, they have no personal connection to that community. These businesses are losing sight of the vital, personal intersection and the true voice of the customer that charity provides, and in turn, the community is losing a network of necessary support.  

A Growing Mindshift in Sourcing Survival

Nonprofits that want to survive are being forced to evolve too. A great example is the Georgia chapter of the Spina Bifida Association. SBAG Executive Director Kristen DiCarlo has corporate experience in a former life, and she’s using that skill set to drum up support from non-traditional areas.

A recent SBAG event included sponsors from where you might expect—medical equipment providers and manufacturers. The outing for kids was also boosted by neighborhood restaurants, an electrical repair shop, and other local traders. Today, SBAG is even partnering with Kroger and Amazon to benefit from the loyalty rewards programs of these stores.

There’s a lesson to be learned there for HME independents, in terms of what this approach of going deeper into a community means.  Maybe it’s time to move your supply closet from the hospital to your local grocery store, or at least put one there, too, for cash purchases. Make your own Minute Clinic.

Is this Mic On?

The takeaway, though, is this painful point: Nonprofits are being burned by competitive bidding, too. And, the biggest victim of all is still the person we all have in common—your customer, their member.

We need to find a larger microphone to share these charitable stories of distress. No politician wants to be confronted by the local news asking why their actions are causing suffering for a charity that cares for sick kids or disabled veterans, especially not in an election year.

Please consider teaming up with the charities in your hometown to share their stories on your local airwaves. For your community’s sake, for your customer’s sake, for Pete’s sake.

Lisa Wells has helped create several online social communities (Wheel:Life, Life After Spinal Cord Injury & iPush Foundation) to assist wheelchair users in discovering new relationships, lifestyle resources and web-based support groups. Lisa also leads Get Social Consulting. She can be reached at