Economic downturn weakens cash sales for some providers

Saturday, May 31, 2008

YARMOUTH, Maine--Most providers consider the HME industry recession-proof, due to the graying of America. But the current downturn in the economy--driven by a shaky stock market, record-breaking oil prices and ballooning food costs--has put a damper on cash sales, some providers report.

Providers like Bill Lamberson have noticed that customers aren’t as willing to drop cash on retail equipment like walkers, aids to daily living, scooters and lift chairs anymore because money’s tight.

“We’re in a recession, and that affects everybody and everything,” said Lamberson, president of Lamberson’s Home Care in Duluth, Ga. “I had a man in here the other day looking for a walker for his wife. She didn’t qualify for a walker with a seat and when I told him how much it would cost, he said she didn’t need the seat. Before, that customer would have said, ‘I’ll pay extra; here’s my credit card.’”

Needless to say, providers are worried. For years, as Medicare reimbursement has dwindled, they’ve looked more and more to cash sales to make up for lost income.

Provider Jim Greatorex said he’s felt the sting of a 10% drop in cash sales in the past five months. His customers, he said, have been strapped for cash over the winter due to sky-high heating and snowplowing bills.

“(The drop in cash sales) is a noticeable trend,” said Greatorex, president of Black Bear Medical in Portland, Maine. “We’re recession-proof when it comes to the prescription business, but we’re no different than anyone else when it comes to the cash business.”

For Mark Ehlers, owner of Ehlers Health Supply in Stockton, Calif., cash sales have remained steady. But that may be because Ehlers is the only provider in the area to supply retail equipment, he said.

“Things are still clipping along,” Ehlers said.

The same goes for Marcia Togami, the billing manager for A&R Medical Supply in Albuquerque, N.M. She has actually seen an increase in cash sales of about $10,000 per month for the past two months.

“We’re working really hard at it,” she said.

Provider Tyrrell Hunter anxiously awaits what spring and summer hold. They are her busiest months for cash sales.

“When you depend on cash sales for 40% of your business, you’re going to feel the impact from a down economy,” said Hunter, president of Majors Mobility in Topsham, Maine. “I’m watching and I’m hoping.”