Power wheelchair market poised for retail revolution

Friday, August 31, 2007

As the K0011 code for Medicare power wheelchairs fades into history, its demise represents a new sales juncture for providers. The question is, which direction will they go?
While many will continue to provide power chairs through Medicare channels, wading through the volumes of paperwork required for the process, others, weary of myriad layers of documentation, may see over-the-counter retail sales for power chairs as an easier and more profitable route.
Mike Serhan, vice president of sales, design and product development for Port Washington, N.Y.-based Drive Medical, agrees that the Medicare environment has providers pondering what to do.
"Because of the lack of understanding of the new requirements in Medicare, some providers are uncomfortable pushing power to the forefront of their businesses," he said. "Some of the providers have dropped power altogether; others have slowed in the power category; and some providers have found other avenues to keep their power wheelchair revenue."
Indeed, "the market for power chairs is one of change and confusion right now," observes Kerry Cronin, product manager for Atlanta-based Graham-Field Health Products.
"The changes in Medicare codes and requirements have made many dealers confused as to which chair their patient qualifies for. Couple this with the increased lead-time getting paid on claims and many are reluctant to purchase more power chairs. As a manufacturer, it is becoming more important to make sure we educate our customers on the criteria for and features of the power chairs we offer."
Whether the retail power chair concept gains momentum remains to be seen, but the current disheveled state of funding for products seems to be a natural pivot point for those with the desire to try, mobility vendors say.
"There is no doubt both manufacturers and providers are moving through a critical evolutionary period," said Ming Chang, product specialist for Longmont, Colo.-based Sunrise Medical. "During this period we have to point out the positive trends and use this opportunity to redefine our organizations. Our industry is evolving from medical distribution to medical distribution/medical retail. With change comes excitement, and we can use this excitement to evolve."
Gauging retail potential
Though the power chair to date hasn't gained a reputation as a lucrative retail category, it could with a little imagination and the right marketing strategy, manufacturers contend.
"Retail isn't a gigantic option for power chairs right now, but it's an area that could conceivably grow--especially if you look at what happened in the scooter market," said Mark Sullivan, vice president of rehab for Elyria, Ohio-based Invacare. "There are people out there who can afford them, though prices for power chairs tend to be higher than scooters. Still, there is somewhat of an opportunity there, especially as a Medicare ABN item."
While the process of establishing the power chair as a retail item hasn't taken off yet, some believe the seeds of a trend have been planted.
"Both providers and manufacturers are assessing the future potential and negative impact," Chang said. "Retail power opens the door for other retail opportunities. We as an industry have to be creative and find ways to bring customers through the doors. Those who do not think outside the box will not survive."
Ted Raquet, vice president of domestic sales for Exeter, Pa.-based Pride Mobility, is confident and excited that the market for retail power chairs will grow steadily.
"We are seeing an increased focus in all retail products, including scooters, lifts and ramps," he said. "Pride has always placed an emphasis on retail mobility. Products like our Go-Go Travel product line have seen a large increase in popularity, and the demographics suggest that this trend will continue."
In fact, Chang believes demographics are the key driver of the trend: "The 50-plus age group represents a large buying demographic, continuing to grow in size and net worth."
For sale: Power chairs
Historically, the power wheelchair has been furnished through the conventional Medicare supply channel, requiring a lot of upfront patient assessment and determination of medical necessity. It has a clinical, therapeutic image rather than one suggesting lifestyle enhancement, like scooters.
Even so, the sophisticated provider shouldn't have a problem refashioning the power chair as a high-tech addition to the store's retail mobility line, Cronin said.
"Active lifestyles, extreme sports and longer lifetimes are a part of life now, and people have to adapt to a new way of selling products," Cronin said. "Companies that can offer that 'one-stop shop' for their users are more likely to get more business. End-users are looking for convenience and those places that can offer it."
Manufacturers are a great resource for sales and marketing assistance when it comes to boosting HME retail efforts, and they invite providers--especially small independents--to take advantage of it.
"A well-stocked, properly merchandised smaller business can do very well as retail mobility sales continue to increase across the board," Raquet said. "Pride's marketing services can help any sized provider with their advertising needs, and provide them with the resources they need to grow."