Rentals: Get a grip on cash flow
A. It’s impossible to operate any business for an extended period without being profitable, and the DME equipment rental business is certainly no exception.
As a medical equipment rental provider, you will likely find your main source of income is derived from Medicare beneficiaries.
“Medical equipment businesses today are essentially locked arm in arm with Medicare,” said Ginny Conway, a former RN who, with her husband, has run Free Spirit Mobility in Greer, S.C., for more than 11 years. “Anyone who is contemplating going into the business of renting home medical equipment had better have a very firm grasp of how Medicare reimbursement will factor into their cash flow.”
Conway commented that it is important to have an understanding of this facet of a rental business. “Anyone considering operating a startup rental business would be wise to have a handle on where the equipment industry is now, as well as how it has evolved just in the last five years,” she said.
A second important consideration for those entering the business is to understand that the rentals that customers think they want are possibly not the best solution for their needs. Conway related an example of a recent customer who wanted to rent a power wheelchair to take a loved one out to view holiday decorations. The customer neglected to factor in the width of their home’s doorway to allow the equipment into the home, or how they were going to transport the power chair with their vehicle, a task that usually requires the use of a vehicle lift.
Conway also stressed the importance of having qualified service techs on staff to maintain rental inventory in proper working condition.