HME NewsPoll feedback

Wednesday, December 31, 2003

YARMOUTH, Maine - When it comes to investing in technology as a way to reduce an HME’s overall costs, providers break apart along two lines.

They either feel that: 1.) Given the stagnant/uncertain reimbursement climate they dare not risk or can’t afford to invest in sophisticated technology. 2.) Because of that stagnant/uncertain environment they have no choice but to invest.

According to last month’s HME News Poll, a scant 12% of the 54 respondents said they had invested in sophisticated technology (sleep, oxygen, billing, record keeping, delivery, inventory) as a way to reduce their overall costs. Twenty-eight percent of respondents said they would make such an investment in the next year, and 25% said they would do so over the next five years.

“We believe that there is no choice in this matter as revenues continue to decline as a result of reimbursement cuts and specific expenses (employee health insurance, liability insurance, etc.) continue to grow at a geometric rate,” wrote Richard Lamb, general manager of Freedom2Go, a full-service HME in north central Texas. “We are being squeezed from both ends and must find ways to lower costs in order to maintain an acceptable measure of profitability.”

Said Raymond Nixon, president of Paris Medical Supply in Paris, Texas: “The DME environment is so unstable. With decreased reimbursement and competitive bidding in the news daily, the uncertainty does not promote long term investment.”

Those same pressures have convinced Allina Home Oxygen & Medical Equipment that it’s crucial to invest in technology, said Vice President Pat Belland.

“With stagnant reimbursement, each DME organization needs to find other methods - i.e. cost savings, productivity increases, finding lost revenue, etc. - to ensure our margins do not go backwards,” he said. “In addition, it is good business to invest in technology that on a long term basis will result in increased efficiency, improved customer service and improved return on investment.”

Even if a provider commits to technology, he faces another challenge: What technologies are worth investing in and how do you determine the return on investment? wrote Chuck Currie, president of ProMed in Buffalo, N.Y.