New products boost Burman’s business

Monday, January 31, 2005

BROOKHAVEN, Pa. - Burman’s Medical Supplies took some hits in 2004, but with a little ingenuity, by the new year the company had bounced back on to even better footing than before.

Burman’s, which had expanded its wound care business after selling its respiratory division to Praxair in 2003, was riding high until March 2004 . That’s when it lost a contract with southeast Pennsylvania’s largest Medicaid HMO.

“[The HMO] basically went from 100 providers down to three,” said company owner and President Steve Burman. “They did a competitive bid, and they basically said one of the reasons we didn’t get it was that we weren’t a full service DME.”

The loss of the contract cost Burman’s 25% of its business, but before long the HMO came back looking for help with reducing its wound care costs. KCI, a wound care supplies maker, had raised the price of its localized negative pressure wound pump, and the HMO turned to Burman to help find a less costly alternative.

“[The HMO] called me and said, ‘We’re spending a lot of money on this modality. Is there anything you can do?’ I did some research and found Blue Sky Medical,” said Burman.

Blue Sky Medical’s negative pressure pump was evaluated by the HMO’s medical director, who found it was equally effective as KCI’s and decided to pay for the new pump under a miscellaneous code. Now Burman’s is back with the HMO providing the Blue Sky pump. He is also getting some of his former wound care business back.

“To me this was kind of fun because that’s the way business is supposed to be. There’s supposed to be competition,” said Burman. “A lot of payers will say if it doesn’t have a HCPCS they won’t pay for it, but [this HMO] was open to taking a look at the product and came up with this solution.

Burman said the HMO could save up to 30% by switching pumps.

After loosing the original contract, Burman started looking for ways to save money and build his business. He began in June by switching to Genairex ostomy products, which were nearly 30% cheaper than his old brand. By January, he had 90% of his patients switched over to the new product.

“Now I have the chance to make this a profitable business and still offer a good product,” said Burman. “Sooner or later the companies are going to have to realize that providers can affect the market share of products, and they will have to become better negotiators or they will end up loosing business.”

Burman’s is also revamping its urological business and creating a compliance program for diabetes strips and supplies.

After selling the respiratory business in 2003, Burman said the company went through a lot of growing pains as it tried to build up other areas of the business.

“The contract was a disappointment, but in essence it made us go out there and look for new business, which now puts us in a better situation,” he said.