Equipped for Life

A decade ago, Mark Ellis started to notice something different about his clientele—they were acting less like patients and more like

consumers.

“People were walking in with a picture saying, 'I want this rollator in purple,'” said Ellis, director of Hagerstown, Md.-based Equipped for Life. “In the DME world, it's usually 'I have gray and gray.'”

It was a lightbulb moment for Ellis, who realized he needed to transform the company—at the time 70% dependent on Medicare—into more of a consumer-focused operation.

Since then, Ellis has reduced Medicare to just 25% of Equipped for Life's $8 million in annual revenues. Annual cash sales in one location alone are at $1.5 million.

Ellis' strategy is multi-faceted. For certain items—such as scooters, lift chairs and ostomy—he doesn't accept assignment. When he does accept a Medicare patient, he upsells.

“We show them what's allowed, then show them other options they might like and sell the difference in cash,” he said.

Ellis invests heavily in TV advertising—the evening news, “Oprah” and “Wheel of Fortune” are his favorite buys—as well as billboards and flyers in the newspaper. He seeks front-end staff with a combination of retail and clinical experience, and has replaced the questions “Can I help you?” and “Would you like us to bill your insurance?” with “What brought you in to see us today?” and “How would you like to take care of this?”

Making the switch from a Medicare-dependent to a retail-focused industry will require letting go of yesterday's profit margins, said Ellis.

“It doesn't mean that you can't have a productive business, you're just not going to see the margin you used to,” he said. “You can fight it and fight it, but eventually you have to deal with what you've got.”