Providers need to rip complexities out of their businesses

Thursday, July 28, 2011

ELYRIA, Ohio - HME manufacturers and providers alike need to be strategic, not tactical, thinkers if they want to survive the next few years, says Invacare's Carl Will.

Will, senior vice president, global commercial operations, offered up this example at Invacare Media Day last week to point out the difference: If I'm a provider, when I'm thinking tactically, the question is, how can I squeeze more out of an oxygen concentrator; when I'm thinking strategically, it's, why am I delivering at all?

"Survival matter a great deal," he said. "Consumers aren't going away...the survivors will thrive."

While providers want to think more strategically, they need to be careful not to add complexity to their businesses, Will warned. Providers can keep things simple by streamlining the number of products they carry within a product category, he said.

"As companies pursue growth, they often become more complex but not more profitable," he said. "They need to rip complexity out of their businesses."

Will also had choice words for accountable care organizations ("we're more the tail than the dog...we have to become more relevant") and competitive bidding ("we fully expect Round 2 to be disruptive" but the industry will adjust).

Will acknowledged that manufacturers and providers alike have challenging times ahead of them. Still, "all boats float in still water," he said. What he wants to know: Which boats are running hard and in the right direction in rough seas?

'Get out of the box business'

Invacare's Lou Slangen has a question for you: How would you describe what HME manufacturers and providers do? If your answer is, "Well, they make and provide power wheelchairs and other home medical equipment," try again.

"We need to get out of this box business and get to what we really do," said Slangen, senior vice president of corporate marketing and chief product officer, during Invacare Media Day. "We make life's experiences possible."

"We make life's experiences possible" is the cornerstone of a new marketing strategy at Invacare. The manufacturer's throwing out phrases like bent metal, moving boxes, and lifts and slings, and replacing them with powered and wheeled mobility, delivering solutions and safe patient handling.

If HME providers also see themselves and market themselves this way, they will increase their value, Slangen said.

"We should have done this a long time ago," he said. "We can be our own worst enemies."

Other highlights 

Invacare announced one of the three winners of its "Real Life" campaign: Casey Followay, an honor roll student who's about to start his freshman year of high school and who's an aspiring paralympian. As part of the contest, Followay gets $3,000 and another $6,000 toward the charity of his choice. Sixty end users submitted videos as part of the contest.

Invacare has opened a Voice of the Customer Center near its headquarters in Elyria. The warehouse gives product managers and engineers the space they need to test new products and compare them to the competition. It's also a place for end users to demo equipment.

Bill Corcoran says leasing is up 8% to 9% this year compared to last year.

Invacare's Roadrunner Mobility division has performed 6,000 power wheelchair repairs and installed 600 vehicle and stair lifts in the past 12 months.

Joe Lewarski says if he were an HME provider faced with the prospect of accountable care organizations in 2012, "I'd be in every hospital system and physician practice, asking them what are they doing and what I can do to help."

When it comes to competitive bidding, Mal Mixon says the reality is that "most of Congress wants to fix it, but they don't want to stop it." That's why Prof. Peter Cramton, who has a plan to redesign the program, is "a very important part of our argument," he says.