MED, VGM continue to define their roles

Wednesday, February 28, 2007

As the needs of HME providers have changed over the years, so have the offerings of the industry's largest member-service organizations, The MED Group and The VGM Group.
In fact, Jim Walsh, president of VGM Management, agrees with anyone who "wants to say that the buying portion of group service has become less relevant" as the years have passed.
"We haven't relied on group purchasing as a significant part of our business for a number of years," he said. "It's not unimportant, but other things have come to surpass it in terms of our offerings to HMEs."
Indeed, both MED and VGM, the Coke and Pepsi of industry provider service organizations, have broadened their portfolios of services significantly over the years. Last fall, for example, MED signed contracts with three vendors, giving members access to revenue cycle management services, online sales lead generation and telemonitoring technology. VGM has recently debuted programs to help members follow up with CPAP patients and enter the home modification business.
"We don't see ourselves expanding the number of manufacturers we work with around the traditional product categories," said MED CEO Bill Elliott. "Just like any other business, you've to go continue to redefine your value offering. That is what we have to do. The MED of 10 years ago wouldn't be meeting the needs of MED members today."
Walsh agrees. In this Internet age, information on product pricing has never been more accessible. In turn, that decreases its value, and MED and VGM have had to give providers new avenues for success.
"We're in a period of rapid change, which requires and puts a high value on information and adaptability," he said. "Effectively delivering information to providers is critical to their being able to morph and remain profitable in a changing environment."
In 2006, MED membership jumped 15% to about 260 members, said Elliott. VGM grew its membership by about 10% last year and retains about 89% of its members annually, Walsh said. When discussing HME member-service groups, Elliott compares them to similar groups in the hospital sector.
"Twenty years ago,manufacturers were saying that hospital group purchasing organizations had run their course--that all they were doing was leveraging scale for better price," he said. "But if you look around, those GPOs are still there providing more value than ever."