Divergent paths for wheelchairs, scooters

Tuesday, December 23, 2014

The future of mobility equipment lies with wheelchairs and scooters and, based on their current situations, it could end up going in different directions, manufacturers say.

Manual wheelchairs face a stiff uphill climb going forward as Medicare competitive bidding has winnowed down the number of sanctioned providers and those still furnishing chairs for the program are scrambling to find ultra-low cost products for patients. Conversely, scooters appear to be an attractive retail business for mobility equipment providers as manufacturers search for ways to attract consumers.

HME providers operating under the competitive bid are at a disadvantage, says Lawrence de la Haba, senior vice president of business development for Atlanta-based Graham-Field Health Products, because they have to somehow find a margin within the low reimbursement levels.

“Those that won the bid are doing everything possible to reduce their acquisition and operating costs so they can make money at the new reimbursement rates,” de la Haba said. “This, in turn, is forcing manufacturers to lower their costs through standardization of components, reduction of SKUs and in some cases, the quality of a component. However, manufacturers cannot reduce the cost to the point that it jeopardizes the safety of the patient.”

Competitive bidding has forced a much stronger emphasis on price, which is causing a ripple effect in the supply chain, de la Haba says.

“Unfortunately, while the winning bidders are seeing greater volumes, the reimbursement rates are forcing them to focus on the price and are assuming the same quality will be there,” he said. “No one wants to put an unsafe product under a patient and as a manufacturer, we’ve drawn a line relative to quality that we will not cross.  We believe there are markets, providers and end-users that place a greater value on the quality and cost in use of the product than the initial acquisition cost.”

Weathering the costs

To Jim Stephenson, rehab reimbursement manager for wheelchairs at Elyria, Ohio-based Invacare, competitive bidding pricing hasn’t interfered with providers’ ability to furnish manual wheelchairs, “but it has changed what products are provided and how they are provided.” The significantly lower margins created by competitive bidding “have forced providers to look for cost efficiencies in their operations, such as product acquisition, service and delivery,” he said.

In the post-competitive bidding landscape, Stephenson says a provider’s contract status is the primary driver of the decisions they make regarding product acquisition.

“Contracted providers seem to lean more toward price due to the challenges they face with the single payment amounts in the competitive bid areas,” he said. “Providers who are either non-contracted or outside of a competitive bid area still seem to favor quality a little more. Providers typically want the peace of mind that the products they offer are not going to become headaches after delivery. The single payment amounts make it difficult for providers to afford that level of quality so they end up providing the best they can with what they have to work with.”

Manufacturers are facing the same situation, Stephenson says—“they’re trying to offer high quality products at the lowest prices possible.” Moreover, manufacturers have been trying to educate providers on areas where they can find efficiencies in their business practices to help them save on expenses. 

“Everyone is trying to do more with less and as much as we would all like to help from a pricing perspective, it’s just not practical with the ever increasing costs of materials,” he said.

Scootin’ along

The scooter market, on the other hand, is brimming with optimism. Andi Barness, director of marketing for Scottsdale, Ariz.-based EWheels, paraphrases pop star Justin Timberlake by saying, “We’re bringing sexy back.”

EWheels prides itself on creating mobility scooters that users are excited to be seen on, Barness says, adding that the company is focused on products that “turn heads and get you noticed.” The company is also committed to the “fun” factor in its models, he says.

“Let’s face it, nobody looks forward to the day when they need help getting around, so why should a mobility scooter be any different than any other mode of transportation?” Barness said.

The key to scooter sales, he says, is offering plenty of options for consumers.

“Choices, choices, choices,” he says. “The more different options you have for your customers, the more you are going to sell. Just because you are a simple person with simple taste, does not mean that all of your customers like ‘simple.’ Promote that you have scooters for everyone, and then deliver this when they come into your store. Put colorful scooters in your front window or out on the sidewalk to turn heads and get people in the door to learn more about them.”