Do you have a strategy for diversification?
If not, you need one to assure your company’s future viability. The DME world has dramatically changed over the years and I don’t think anyone would argue against that fact. Reimbursement rates have been cut to the bone for CPAP and oxygen, just to name a couple, while the cost of running your business has not. In fact, I am sure your costs have increased dramatically more than the years. Do you find yourself looking back at the days when you billed out and received over $400 per month for oxygen, and were paid timely every month for as long as the patient was using the equipment? It never capped, you retained ownership and you happily billed every month. Well, if you keep reminiscing and don’t develop a diversification strategy, you will find yourself exiting the business, as so many others have, and this could very well be a non-voluntary exit.
So what is a diversification strategy? A diversification strategy is a plan developed to help your business evolve. It gives your business a look at growth opportunities that allow for revenue-generating sources to be implemented that you will need to assure future viability over the long haul. There are numerous areas for growth opportunities and here are some for you to consider.
Home accessibility modification
Perform evaluations and modifications to homes. For instance, modify the countertop sink access to allow for wheelchair clearance. Also, look at modifying bathrooms to make way for a roll-in, accessible shower, along with widening door access points. If you are a complex rehab provider, then you already have clientele in need of this service and they are also a great word-of-mouth advertiser for you.
Private duty care services
If I were a betting man I would bet you already have clientele that are most likely in need of this service. You can provide companion care services for an hourly rate that includes light housekeeping, laundry and food preparation. Find out what the client is in need of and provide those services. This is a labor-based agency model that can be an additional service or a separate entity.
Retail, retail, retail
What retail (cash-and-carry) items do you offer? Aids to daily living items, bath safety items—work with your DME manufacturer to diversify your retail offerings. The baby boomers are going to be here for a while and they want to stay independent and active as long as possible.
If you are respiratory focused, then develop a working relationship with your skilled nursing facilities to provide ventilator services for their patients. You bill them for the ventilators and the services of a respiratory therapist, and they expand their offerings and billing opportunities with a decreased risk and the benefit of experts (you). A great way to make you stand out in this market is by becoming accredited for ventilator services.
Jim Dehler, MS, RRT, is a DME consultant and accreditation surveyor with more than 20 years of healthcare experience. He can be reached at (520) 241-6324.