Opportunity knocks for software vendors

Sunday, August 31, 2008

With Brightree on the acquisition trail, HME News asked a handful of vendors: Is the software market for the home medical equipment industry ripe for consolidation? Here’s what they had to say.

Spencer Kay, president, Fastrack Healthcare Systems

There’s more room for consolidation among software vendors who serve smaller providers than those who serve mid-range to larger providers, Kay said.

“There are about 10 (vendors) catering to smaller providers-you know, start-ups and mom-and-pop companies,” he said. “If they merged and eliminated costs like overhead, they could spend more money on product
development and create an extremely profitable business. For them, conlsolidation makes sense.” David Schaer, manager, Computers Unlimited

But consolidation’s not always a good thing, Schaer said. Because some software vendors have different offerings and serve different types and sizes of providers, it could leave gaping holes in the market.

“Consolidation can eliminate redundancies in the market and create costs savings, but you don’t want to take it too far,” Schaer said. “Consolidation can also lessen the ability of certain services to thrive.”

Richard Meham, owner and president, Noble House

There’s always room for consolidation in any market, Meham said, but from where he sits, the software market for the HME industry doesn’t feel too crowded.

“That would be the case if there weren’t enough customers to go around, and there’s plenty of business out there,” he said.

Meham sees that business only increasing now that national competitive bidding has been delayed.

“People who were hesitant to get into the business are now getting into it,” he said. “For the past six to eight months, things started to turn around, but for the past six to eight days, things have really brightened up.”