It’s the small things: Providers see savings at the pump

Friday, January 23, 2015

YARMOUTH, Maine – With gas prices dipping below $2.00 in some parts of the country, HME providers say they’re grateful for the extra cash.

“At $2.25 a gallon, I wish I could dig a hole and put a tank in,” says John Letizia, president of Ebensburg, Penn.-based Laurel Medical Solutions. 

Because the vast majority of providers don’t charge patients a delivery fee, they absorb the blow when gas prices are high and enjoy a small windfall when they’re low.

With 16 vehicles to gas up, Letizia, who personally drives about 40,000 miles a year for deliveries, estimates that he’s saving $2,000 a month with lower gas prices.

Meanwhile, Orbit Medical, which delivers DME to patients within 150 miles of the Chicago area, as well as parts of Wisconsin, Indiana and Michigan, saved $1,000 at the pump in December.

“We’ve really only seen the benefits over the last month,” said Justin Thomas, director of operations at Chicago-based Orbit Medical, who expects this month’s gas savings to be even greater.  

Still, providers aren’t exactly ready to pop the champagne. Gas prices will likely continue to go up and down—and they’re only part of the equation.

“If we started servicing more areas because gas is cheap, at some point it still becomes expensive,” said Thomas. “There’s (service), vehicle maintenance, insurance—there’s a lot more that goes into it than just gas.”

What savings providers are realizing, they’re re-investing back into their businesses.

“The savings aren’t significant enough to go into any type of rainy day fund,” said Letizia.

Plus, providers say it’s not a matter of if gas prices will go up, but when.

“I think it’s going to take awhile to get back up to where it was,” said Jim Greatorex, owner of Black Bear Medical in Portland and Bangor, Maine, which has 12 vehicles on the road in Maine and New Hampshire. “It probably won’t go much lower, but I think it’s going to stay below the peak levels we’ve had over the last few years for quite awhile.”