Now, more than ever, collaboration is key

Tuesday, September 30, 2003

In last year’s HME News address, we looked together at four areas of vulnerability faced by our industry, areas of concern for all providers:

- Government/reimbursement

- Dealer profitability

- Quality

- Technology

This year, let’s approach these same issues from a different perspective. What can we , as participants in this industry, do about them?

Let’s start with government/reimbursement. First, the climate is intense. States are challenged economically. Medicaid pressure is being felt across the nation. Medicare’s future is in question as well.

Now, what can we do? Stay together. It is more important than ever that we align in areas where we find common ground. Form new relationships, traditional and non-traditional, exclusive and non-exclusive, from which we can build new, stronger initiatives.

Nowhere is the value of partnership and collaboration more compelling than supporting efforts in the funding area. We all have a shared interest in policy outcomes.

Meeting this threat is going to take more than an association or a few well-connected individuals stepping forward. Getting our message out and our expertise into policy discussions will take a cooperative effort among all the players in the industry.

The above example seems intuitive because all players in the industry share a common goal, but the same cooperative thought applies to dealer profitability. Strategic partnerships are valuable wherever there is shared interest or benefit.

Other industries have used partnering for years to improve their business viability and profitability. Leveraging capabilities and expertise through strategic partnerships is a proven way to move forward along multiple points of differentiation and make every part of the business better and more competitive. Partnerships more than anything else are about determining where two parties can work together to improve the business.

Quality is another area in which every member of the value chain is a stakeholder. Whether product or service focused, quality measurement and implementation requires information to flow from the provider back through the vertical chain to the manufacturer.

Manufacturers need providers to share their experience and feedback, and providers need benchmarking and best practices. Also, quality is one partnership from which a pro-vider can experience success regardless of size. Providers are closer to the customer - because of this other members of the supply chain are particularly eager to get their insights. Smart companies improve quality by partnering to get close to the customer.

The information flow is almost the exact opposite when it comes to technology. Providers need insights from the wholesalers and manufacturers. While there are opportunities in our industry for product technology advancement, such technology is rarely a point of differentiation among providers.

Going beyond just new product innovation, providers need technology solutions that help them automate processes. Whether an XML framework for invoicing, a new customer segmentation model or data-driven store planograms, providers can gain expertise through strategic alliance that would be difficult or impossible to develop internally. Upstream partners are usually larger and have more robust resources. They can look across all the dealers in the industry and gain insights into how and what technology is specifically driving product sell-through.

Build partnerships with your referral sources. Get to know your area hospitals and rehab facilities. Meet with case managers and discharge planners in your community. Providers represent solutions to these individuals and their clients. Learn about regional managed care organizations and stay tuned to their initiatives around education in areas such as patient safety and outcomes. Make sure the referral sources know about your organization and the opportunities it offers. Building referral relationships with the support of a manufacturing partner, this is where it can all be brought together for the most effective solution.

Recently a major network of rehab providers came together with a national consumer focused provider company. The outcomes were fantastic. There were identified commonalities and each group walked away from the meeting with an understanding of the commonalities between their businesses. From that meeting came shared common ground, ongoing dialog and strategic initiatives for speaking jointly with legislators. Collaboration works.

Now I know our industry is about as individual as they come. We celebrate the entrepreneur who starts with little more than determination and goes on to build a nationwide success through sheer force of will. Whether a provider with two locations or 200, we have always exhibited a “go it alone” determination. But as much as we might idolize the myth of the lone gun, the reality is that no hero worth his or her spurs ever made a move without their trusty sidekick. The simple truth is that there is strength in numbers. Collaboration and partnerships work.

- Michael N. Hammes is chairman and CEO of Sunrise Medical.