Providers leave Summit armed with data
NASHVILLE, Tenn. - Didn't attend last week's HME Business Summit? Here's a taste for what you missed: A university professor and self-professed "bitter, evil little man" giving a global snapshot of what's wrong with health care, and an HME provider sharing how he slashed the number of days it takes to provide CPAP devices nearly in half.
The 150 HME providers who packed the Hilton Downtown Sept. 13-14 listened to presentations; brainstormed in two workshops on how to generate revenue and cut costs; and attended a music and dancing-filled networking reception at the Wild Horse Saloon downtown.
Highlights from the Summit, which was sponsored by Brightree, Invacare, Philips Respironics, Dream Software, First Quality, Fastrack, QS/1, Permobil, CPR+ and Medtrade, include:
The study says
Mike Moran, executive editor of HME News, and Rick Glass, president of Steve Richards & Associates, reviewed the results of the 4th Annual HME News/SRA Financial Benchmark Study. On 39.8% of respondents reporting that their revenues declined in 2009, Glass said: "(Because of) the January 2009 cuts, it's not surprising to see the impact of that here. Are you cutting costs back far enough? At some point, you can't just cut costs. You have to find a way to grow revenues."
'We're in a boat load of hurt'
Larry Van Horn, a professor at Vanderbilt University, pointed out that "we're in a boat load of hurt," with more money being pulled out of Medicare than is being put into the program. He pointed out that the average Medicare beneficiary contributes $9,443 (based on the average wage for a male in each of the 42 years he would have paid). "What does that get you? A quarter of a knee?"
The proof is in the pudding
John Teevan, president and CEO of Home Care Medical (HCM), and Janet Ahlstrom, a partner at Wipfli, shared how applying lean principles at HCM has resulted in a much stronger company. Case in point: After analyzing the process for providing CPAP devices and making changes, HCM slashed its turnaround from 71 days to 63 days and, eventually, after making more changes, to 49 days.
Lincare vs. FedEx
Don Davis, president of Duckbridge Advisors, compared the financials of companies in the HME industry to companies in other, but similar, industries. What did he find? That companies in the HME industry may not be happy with the margins they're making, but that other companies are operating under even tighter margins. Lincare's EBITDA margin was 24% in 2009, down from 31% in 2008, and FedEx's EBITDA margin was 11% in 2009, up from 8% in 2008.
Mike Sperduti, president of Emerge Sales, discussed the new era of HME sales. What's it all about? Specialists. He told attendees to make prospecting the job of people who like it or outsource it, and make closing the job of people who are good at it. "In sales, we try to make everybody good at everything, but everybody should be doing what they're good at," he said.
To read live blogs from the Summit, go to www.hmenews.com/blogwm.