Live from Medtrade

Monday, October 12, 2009

ATLANTA -- Medtrade got off to a positive start Tuesday with a keynote panel discussion on how HME providers can lay the foundation for a prosperous future.

"(Providers need) to go on the offensive," said AAHomecare CEO Tyler Wilson, who moderated the Pride Mobility Products-sponsored panel discussion.

The four provider panelists--Robert Steedley, John Geller, Tim Pederson and Randy Wolfe--discussed "strategies for the future," including diversifying product and payer mixes.

Steedley, president, Barnes Healthcare Services

If providers are going to survive, they need to believe that they can do many things and do them well, Steedley said.

"I hear providers talking about how they specialize in one area," he said. "That infers you're average at best (at all other areas)."

Barnes recently expanded the list of products and services it does and does well to include negative pressure wound therapy (NPWT). Before diversifying into NPWT, however, Barnes considered the following four criteria, Steedley said: consumer safety and security; the "wow" factor (how it could make a mark on the market); financial benefits ("We're here to make money, and I'm not ashamed of it," he said); and improved efficiency.

With that in mind, Steedley told attendees to walk the show floor with purpose, keeping an eye out for potential new products and services.

"(We have to) adopt the attitude that we have to change," he said.

Geller, president, Medical Service Co.

Geller reminded providers that they're all in this together, whether they're in a competitive bidding area or not. He pointed out that, starting in 2011, CMS may apply bidding prices to non-bid areas; and the Senate Finance Committee's healthcare reform bill includes a provision that would require the agency to do this by 2016.

"For those of you not in Round 1, I suggest you pay attention," Geller said. "We don't know what's going to happen."

Since Medical Service Co. is in a bid area (Cleveland), it has been reevaluating its business model in the past few years. The result: It has added a handful of branches in rural, non-bid areas, and it has courted non-Medicare payers.

"We need to plan strategically," he said. "We need to make sure we have a plan A; we have to make sure we have a plan B; and, unfortunately, in this industry, there needs to be a plan C."

Pederson, CEO, WestMed Rehab

Because "this is a war of attrition," WestMed has reevaluated its business model to focus on its core competencies: complex rehab, orthotics and prosthetics (O&P), and respiratory, Pederson said.

"I think there are better days ahead of us," he said. "But there are things that we need to do."

Two of those things: Providers need to keep track of their costs (and not just product costs), and they need to improve operations by implementing measures like product formularies.

Pederson remains "bullish" on the complex rehab market, despite a 9.5% cut to Medicare reimbursement that went into effect this year. He pointed out that the industry has succeeded in getting the product category carved out of competitive bidding, and it seeks to get it recognized as a separate benefit from DME.

"We've increased our investment in complex rehab," Pederson said. "It has been successful."

Wolfe, president, Lambert's Health Care

If providers are going to use retail as a way to diversify their product and payer mixes, they have to have their heart in it, Wolfe said.

That means paying attention to details (the incandescent lights at Bath and Body Works are a good example); relinquishing control ("Customers are in charge; they set the rules," he said); and dedicating more time and energy to inventory management ("The industry's not that far along (in this area)," he said).

It's worth the extra effort, Wolfe said. Thousands of baby boomers are retiring every day and they and their caregivers are "crazy spenders" (they spend about $1 trillion per year, he said).

"It's a great positive to be an asset to (caregivers)," Wolfe said. "We have to find ways to tell our story, and retail is one of the ways to do that."