Invacare to close Roadrunner Mobility
ELYRIA, Ohio – Distancing itself even further from the services side of the business, Invacare announced July 26 that it will close Roadrunner Mobility by the end of this year.
Invacare acquired Roadrunner Mobility, a company that provides power wheelchair repairs through a nationwide network of technicians, in 2007.
“This is related to reducing complexity and focusing on our core equipment product line,” said Lara Mahoney, director of investor relations and corporate communications at Invacare. “Roadrunner Mobility was a great additional service to offer customers, but we’re at a point where we need to focus on our areas of strength and that’s equipment for the home and long-term care industry.”
Roadrunner Mobility is the second services-related company in as many months that Invacare has decided to close. Invacare announced in June that it will close Invacare HCS, a billing company that it acquired in 2008, by Aug. 30.
Invacare added Roadrunner Mobility to its portfolio as part of a strategy, at the time, to evolve from a products business to a products-and-services business. But “things are different now,” Mahoney says.
First, Invacare has had to invest significant time and resources into resolving a dispute with the U.S. Food and Drug Administration that has limited production and dampened sales; and second, competitive bidding has made the repair business less attractive from an administrative and financial perspective.
“Roadrunner Mobility is facing similar challenges in billing Medicare,” Mahoney said. “With competitive bidding, there’s a whole other level of complexity.”
Mahoney declined to say how many providers are currently using Roadrunner Mobility’s service. Back when Invacare acquired Roadrunner Mobility, company officials stated that 100 providers were using the service, with five to 10 providers signing up per month.
“This is going to have a huge impact on those providers,” said Scott Meltzner, operations manager at Charlotte, N.C.-based Network Medical Supply, which does a brisk business in repairs. “They’re going to lose the person that’s fixing their wheelchairs, and it’s not an easy business.”
Not an easy business is right, says consultant Martin Szmal.
“The logistics of sending someone out to repair equipment, possibly provide a loaner and bring equipment back, is costly these days,” said Szmal, founder of The Mobility Consultants. “Any profit left on repairs these days gets eaten up by those costs.”
The long wind-down will allow Invacare and Roadrunner Mobility to honor existing business and to work with customers to transition their business elsewhere, Mahoney said.
“We’re trying to coordinate service and support through other potential service providers in the industry,” she said.