Do your homework

 - 
Sunday, May 31, 2009

Q. How can I tell if there is enough local business to justify adding a new disease-specific product line like wound care or sleep therapy?

A. Adding any product line to your business takes planning and evaluation. The need and opportunities in both wound care and sleep therapy have been well documented as these markets have grown and developed over the last few years. Population-based statistics can be easily found on the Internet with simple searches such as “sleep apnea incidence” or “skin ulcer incidence.” You should start there to develop a feel for the market need and then take that knowledge into your community.

Meet with your referral sources to discuss their experiences and the needs they see for these products and services in your community. This will also add to your competitive market analysis. Listen for unmet needs, service gaps or product limitations. Don’t limit yourself to your current referral base. Contact nursing homes and home health agencies to learn about wound care needs. Visit with both family practice and specialty physicians about patients at risk for obstructive sleep apnea (OSA) and how these patients access services.

If you are in a smaller community, say less than 250,000 people, don’t limit your opportunity to your current “service area.” Disease- specific product lines, like wound care and sleep therapy, meet long-term or continuous needs that can be managed over a larger area than classic DME. Include the surrounding communities in your evaluation; this could expand your base of business.

Additionally, your evaluation needs to include a basic pro forma of the revenues and costs for the product line you are considering. Since you can leverage your existing facilities, overhead and customer base, you may need only a few patients to reach a break-even point for your program. Since you only need to cover the “incremental” costs to make a profit, you may find that even a small community can support adding these products.

So start your investigation now; you may find more opportunity and business than you imagined. 

Jeff Souza is president of HME Advantage. Reach him at 888-880-4463 or jeff@hmeadvantage.com.

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