Outlook 2015: Hold on a little longer
As I write this on a gray day in mid-December, I’m thinking ahead to 2015 and what the new year will bring. It’s not just that I’m eager for spring (which I am), but that I believe the next year will be a better one for the HME industry.
We’re seeing a bit more stability than we’ve seen in recent years. There’s a resurgent interest in HME from investors. Smart business owners are merging or acquiring their competition to introduce efficiency of operations. So while we’re seeing a decline in the total number of businesses, those remaining seem to understand how to be successful. That’s a comment I heard from some of our HME News Business Summit attendees, and it’s a thought that I heard repeated at Medtrade in Atlanta.
Speaking of consolidation, last week I was traveling, and during lunch a friend and customer commented that nearly everyone has a YMCA near them. According to the official YMCA website, there are 2,700 Ys, serving 10,000 communities.
I think there’s an interesting parallel. In recent years we’ve seen a decline in provider companies down to today’s number of 8-10,000. Smart people I’ve talked with tell me that number’s likely to drop further, maybe to 6-7,000 companies. Of course, consolidation will also bring more multiple-location businesses, but I’m just talking about the number of company headquarters.
For those providers who tough it out, get through competitive bidding, restructure their business and do what it takes to be profitable, there should be a good business here. There’s no arguing with the favorable demographics we face.
Along the same lines, most of you haven’t seen the 2015 HME News media kit. For those who don’t know, it’s a rundown of our products and pricing for marketers to use in planning their spending with us. That spending is what keeps HME News free in print and electronically.
This year we’ve put a tag line on the cover; “Driving HME to be America’s Healthcare Solution.” We think it’s a strong statement of our belief in the future of HME and the significant role it will play in reducing healthcare expenses while improving the quality of care.
What do you think 2015 will bring? Email me with your thoughts and comments.