Heard at the Summit: Start early, crunch numbers
CHARLOTTE, N.C. - It's no accident that the HME News Business Summit was held here last week. Charlotte is, after all, a Round 1 competitive bidding area, something very much on the minds of the HME providers who attended the event.
The Summit, held Sept. 11-13 at the Marriott City Center, wasn't all about competitive bidding, however. When attendees weren't networking with fellow providers or enjoying the exhibits at the Levine Museum of the New South, they heard presentations about reducing hospital readmissions, the value of home care and the state of the industry.
Start early, crunch numbers
Contract suppliers Kim Brummett of Advanced Home Care and Rick Perrotta of Network Medical Supply shared their experiences with crafting winning bids for competitive bidding. Know every facet of your costs and bid only on what's essential to your business, they said. Still, the elephant in the room remains: The suicide bid.
What are you worth?
Although the market for HME providers is still lukewarm, there are more buyers out there these days, say M&A analysts. However, sellers need to be more realistic about what their businesses are worth. Thanks to competitive bidding, buyers can price businesses themselves, says Don Davis, president of Duckridge Advisors. "It's simple math, and sellers need to understand that," he said. "You need to talk about the intangibles that make your business different."
From dinosaur to cutting edge
Dr. Steve Landers of the Cleveland Clinic started doing house calls as part of his practice, and while many colleagues considered him a "dinosaur" for doing so, he saw the value of it. These days, he said, several key trends are driving an increase in home care: demographics, technology and consumerism. It is also safer and less costly, he pointed out. "The home is the healthcare venue of the future," he said.
Hospital to home
Greg Spratt, homecare chairman of the American Association for Respiratory Care, shared some results from a recent survey of home- and hospital-based respiratory therapists. With hospitals required to start reducing readmission rates in 2012, HME providers should take notice of these stats: Only 12% of hospitals partners with HME providers, even though 81% of RTs believe oxygen noncompliance contributes to hospital readmissions. "That's linked to patient education and that's something you guys are involved in," Spratt told attendees.
Rick Glass, president of Steven Richards & Associates, and Scott Lloyd, co-founder of Extrakare, discussed the results of the 5th Annual HME News/SRA Financial Benchmarking Survey. Revenue growth declined for 27.4% of poll respondents. Additionally, "many providers are showing slim profit margins of 8% to 10%," Glass said.