New England providers turn up the heat on Invacare

Thursday, September 23, 2010

ELYRIA, Ohio - Invacare's got some serious damage control to do in New England, where providers are upset that the manufacturer bought a company that competes with them for hospice contracts.

"It is and will be (messy) until Invacare fixes it," said Jim Greatorex, past-president of the New England Medical Equipment Dealers association (NEMED). "We need to know their end game."

In June, Invacare acquired Specialty Medical Equipment, which is headquartered in Norwood, Mass., and operates seven warehouses throughout New England. Invacare acquired the company to get access to its long-term care contracts, say company officials.

No problems there, say providers, who do very little of this business.

Another arm of Specialty Medical, however, services local hospice contracts--business that many providers also pursue. At a NEMED meeting Sept. 15, providers gave Invacare officials an ear full and, at one point, the meeting had to be adjourned so tempers could cool, according to several association members.

"I had two people that I was sitting beside and both said we are done (with Invacare)," Greatorex said. "One guy said he'd been done for three weeks."

By the next day, "emotions had settled down a bit," and providers felt better that Invacare would "figure a way out of this," Greatorex said.

Carl Will, Invacare's senior vice president, homecare, said that when Invacare's continuing care division purchased Specialty Medical, officials in that division did not completely understand how the hospice division operated.

"They couldn't carve (hospice) out of the deal, and they didn't understand, in enough detail, the conflict that it would create," Will said.

Will said he flew directly from an industry event to the NEMED meeting "to talk directly to our valued customers and to work with them to figure out how to resolve this."

Because Invacare is a publicly traded company, Will said, he cannot discuss how it might do that.

Invacare has always been a great business partner and industry advocate, NEMED members said, and that's why this turn of events has left them befuddled. They plan to watch closely how the industry's biggest full-line manufacturer resolves this controversy.

"They have been a good partner, but we are a little bit concerned about this and will continue to monitor how they take it forward," said Gary Sheehan, president of Cape Medical Supply in Sandwich, Mass. "To the extent they continue to compete for business with us, that's going to cause us to re-evaluate where we make our purchasing."

Will stressed strongly that, "this is clearly something that we are going to work out with the providers." He said Invacare has absolutely no interest in competing against its customers or bypassing them in the distribution chain.

"For as long as we've been in existence, we've always aligned ourselves with providers--that has been for 30 years," he said. "It has been a strong point of ours, and we are going to continue to do that."