Gas prices keep biz from further growth

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Friday, July 27, 2012

ELMHURST, Ill. – High gas prices have serious consequences for HME providers, Phil Kerr told the House Small Business Subcommittee on Economic Growth, Tax and Capital Access June 25. Kerr, president of Elmhurst, Ill.-based Home Medical Express, recently told HME News why gas prices and competitive bidding are putting the industry in a tough position. 

HME News: What has been your experience with rising fuel prices?

Phil Kerr: In 2009 my fuel costs were $126,000; they were $247,000 last year. My business grew 43% in the last two years and our fuel prices went up 95% during that time.

HME: How did you make up that extra expense?

Kerr: We spent less on vehicles and employee costs trying to offset the impact on the business. We could have had four more technicians on the road, four more vehicles on the road and four more sets of health insurance for those employees. 

HME: You told the House Committee that competitive bidding would only make the gas price problem worse.

Kerr: In the first nine cities they eliminated 85% of the companies from the program. The service areas are going to be broader. Because of competitive bidding, we’re going to be getting less revenue with less economies of scale (because of the increased travel). 

HME: What are you looking for from Congress?

Kerr: Create some way to get fuel prices down.

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