Manufacturers switch gears

Thursday, November 30, 2006

Wheelchair manufacturers across the country believe Medicare's new allowables for power mobility devices, which cut payments for some devices by up to 35%, will amplify provider demand for power chairs with the lowest acquisition costs.
Though none have plans to knock down production of feature-rich, higher quality chairs and boost the volume of low-cost models, the assembly lines are already switching gears.
"With the current allowables, products will change," said Carey Winkel, president of Sunrise Medical's commercial operations in North America. "Innovation and functions/features will be stripped away. We will have to bring out products--drastically different products by the way--that fit into the magnitude of the reimbursement cuts."
Invacare also predicts a boost in business for lower-end chairs. The company believes that now, more than ever, suppliers will have to select a primary supplier who will support a "formulary" that involves product, parts, education and program.
"The days of prescribing any one of 60 power wheelchairs from 10 different manufacturers and expecting to be able to deliver service that meets the consumers needs while staying in business and making a profit are over," said Lou Slangen, Invacare's senior vice president of worldwide market development.
Like every manufacturer contacted for this story, Invacare declined to detail price cuts, if any, to their PMDs. Pride Mobility Products did say that it had developed a new line of lower-cost chairs, its Jazzy Select series.
"Pride is also working with rehab providers to develop lower cost versions of our Quantum Q6 rehab power chairs," said CEO Scott Meuser.
Like Invacare and its reference to cost-shaving programs, Pride is talking about product planning seminars and Webinars as strategies for lowering supplier costs. But doesn't plan to cut R&D and focus on a bargain basement chair.
"The challenges of the new market environment create the need for an even greater R & D effort to create high performance products at an even lower cost," said Meuser.
Similarly, Shoprider says its engineers "will be busier than ever" on new power chairs as a consequence of the cuts, said Shoprider President David Lin.