No better time than now for retail
A few years ago, I teamed up with my good friend Shelly Prial to write a book that instructs home medical equipment providers on how to set up a retail sales operation and succeed at the cash sales game. While I don't mean for this to be a commercial for "Yes, It Really Works - Building HME Retail Sales," (though we do have a few unsold copies in stock), I'm not above borrowing from it to help me sell the notion of HME retail sales, which I believe has never been more important than right now.
The esteemed Mr. Prial, who with nearly 60 years of industry perspective is HME's professor emeritus, kicks off the first chapter of our book by summing up (more like gently condemning) the typical Medicare provider mentality this way:
"You're familiar with cash, aren't you? It consists of green rectangular pieces of paper that have pictures of former U.S. presidents on them. You can be forgiven for being a little fuzzy about it since so few HME transactions involve this commodity. It seems like the only paper HME providers see are certificates of medical necessity, along with forms, forms and more forms. Then you have to wait patiently for either a payment or denial and too often you get the latter."
Sarcasm aside, he gets to the heart of the matter: Many HME outfits are awash in the wrong kind of paper. They are too heavy on bureaucracy and too light on currency. Is it any wonder why so many companies have cash flow problems?
Given that just about everything in the Medicare Part B world will soon be auctioned off to the lowest bidder, providers who aren't already in retail will soon reach a juncture that requires them to either vigorously pursue the winning bid (gooooood luck--you'll need it); shutter the shop; or make strategic adjustments that tap into alternative revenue sources and keep the business running.
Notice I said "business," not "Medicare non-profit support services agency." Contrary to what it often looks like, HME is a for-profit enterprise that must adhere to capitalistic principles. Yet for years Medicare's generous reimbursement rates helped HME operations succeed despite not really following the laws of economics. But with the stroke of a congressional pen, that worm has now turned, folks, and those who want to continue simply must adapt to the new environment.
Take it from me--I have written extensively about the potential of retail sales in the HME community; not just in my book with Shelly, but in HME News and all the way back to the early '90s during my days with the old MPS magazine. I was a staunch advocate of it then and favor it even more now.
I regularly interview long-recognized experts on this topic--Jack Evans, Ed Lemar, Louis Feuers and Avi Weiss--who are all fonts of ideas about how an HME provider can capitalize on the emerging new boomer-fueled cash-friendly marketplace. Lately I've been listening intently and often to a new guy named Kevin Jones, a retail sales specialist with plumbing fixture giant Moen. Yes, that Moen. They firmly believe upscale bath safety equipment is on the verge of becoming a retail bonanza and they want HME providers to be their primary sales channel.
There is good reason to heed Moen's call. The suburban Cleveland-based manufacturer had the same instincts about upscale bath products 20-some years ago and subsequently built a retail empire through its network of plumbing wholesalers and contractors. Many of these establishments had no previous experience in retail, but through diligence and determination became sophisticated merchandisers. I know this to be true because I saw it firsthand as an editor for Supply House Times and Plumbing & Mechanical magazines.
It's not just Moen that recognizes the HME market's cash potential. A large number of vendors offer expert retail advice, and providers should be taking advantage of it.
HME operators who have been reluctant to enter into the "scary" world of retail should take a cue from Winchester, Va.-based Valley Home Care, one of our 2006 HME Excellence winners. Director Angie Fishel attributes a 15% to 20% increase in business to retail and adds that she "can't imagine not having it."
So let's review: The market is there for the taking, there is plenty of help available to get started and there are many examples of providers who have turned retail into a blue-ribbon business.
Time has run out and so have the excuses. Get busy.