Providers think 'retail'
With reimbursement cuts coming fast and furious, providers accustomed to referral-based business have begun to see the value in cash sales.
A large crowd listened attentively to Velma Goertzen's September Medtrade seminar covering the nuts and bolts of a successful retail operation--everything from slat walls to retail-oriented advertising.
The message seems to be getting through, said Goertzen, general manager of Hutchinson, Kan.-based Health E-Quip.
"They were thinking about what products were really retail and which were insurance-driven," she said. "(The trick) is to find a happy medium."
Good basic categories like bath safety, ambulatory aids, mobility and compression hosiery lend themselves to retail/cash add-ons like walker accessories. Personal care and wellness products round out offerings and draw customers in, said Chris Godlewski, a senior merchandiser with Gladson & Associates, in Lisle, Ill., which has seen an increase in people getting into retail.
"They should know their demographic and who the patients are," said Godlewski. "They need to have knowledgeable people that can properly fit the stuff."
Wallace Weeks, an industry consultant based in Melbourne, Fla., said he's seen a number of providers find success in shifting their business mix to retail.
"They desire a lower-cost business," said Weeks. "Processing a retail transaction is significantly less than our standard industry transaction, which includes delivery costs, assignment of claims and collection activity."
With the 36-month oxygen cap and proposed fee changes, respiratory providers in particular are interested in opening retail showrooms, but are often apprehensive, said industry consultant Jack Evans, president of Malibu, Calif.-based Gobal Media.
"It's a different mindset," said Evans. "Suddenly, you're in the retail business. I've had respiratory providers think I'm nuts when I show them all the products they need to carry."
Evans tells providers that it they are willing to dedicate 1,000 to 1,500 square feet to retail space, they can generate $1 million to $3 million in sales.