'Scooters have always been appealing to the cash-paying customer'

Tuesday, June 30, 2009

There’s no room for pessimism in the scooter market these days. Despite negativity toward Medicare, the retail market for scooters is encouraging positive signs, manufacturers contend.

“Scooters have always been appealing to the cash-paying customer,” said Cy Corgan, national sales director, retail mobility, for Exeter, Pa.-based Pride Mobility Products. “Many able-bodied individuals purchase scooters to allow them more freedom on a daily basis and increase their level of independence. Baby boomers, in particular, are seeking ways to stay independent and active and will be the consumers for scooters, as well as those who don’t qualify for a power chair.”

Mike Serhan, co-founder of Drive Medical Design/Dr. K in Pico Rivera, Calif., believes the retail market for scooters has the potential to “really take off” if providers take the time to study it.

“It is essential to diversify and understand the ‘need’ market from the ‘want’ market,” he said. “People have mobility issues, but they are not sick. They need some help and they have disposable income.”

For Medicare, scooter reimbursement was cut 9.5% on Jan. 1, 2009. Making matters worse: Rates were already considered to be on the lower end of the scale.

While the main thrust now is on retail, Medicare assignment may still be viable under the right circumstances, Corgan said.

“The product is an important step in Medicare’s mobility assistive equipment algorithm that can’t be ignored,” he said. “There will always be a certain Medicare market for scooters and they remain a key component of the cash sales market. Providers can make scooters a profitable part of their business, starting with offering a basic model in each Group 1 code. From there, stock a variety of scooters with more advanced features and capabilities.”

John Koster, product manager for scooters at Elyria, Ohio-based Invacare, says the weakened state of the general economy has softened sales of large scooters, but he adds that sales of micro-portable scooters remain strong.

“This is because large scooters cost more to begin with and, because of their size, are very rarely reimbursed due to Medicare’s in-the-home rule,” he said. “However, the overall market is still there and growing due to demographic factors and scooters remain an important part of Invacare’s power mobility strategy.”

To encourage providers to sell scooters as cash items, Invacare provides free literature, direct mail pieces and ad slicks, Koster said.

“New strategies such as bundling scooters with ramps or lifts and upselling scooter accessories along with every scooter sale will help maximize retail sale profits,” he added.

Pride invests heavily in training providers’ staffs to be retail sales specialists, Corgan said.

“This includes keeping provider associates up to date with the latest product information and assisting with development of customer service skills,” he said. “Providers should ensure their staff is well versed and current on the procedure involved with an ABN. This knowledge makes it possible for clients to upgrade their scooter purchases, obtain a scooter that is not covered or obtain a specific scooter if medical necessity is not met. It can generate additional revenue opportunities for the provider.”

Acknowledging market vulnerabilities from Medicare cuts and economic recession, Cape Coral, Fla.-based Merits Health Products has developed a scooter model designed to straddle the Medicare and retail boundaries.

“The new scooter will have SADMERC codes, as well as be priced for a cash sale, and it will give competitors a strong run for their money,” said Les Brandeis, director of sales. “We have lowered the production costs so that we can offer our dealer network a lower price on a unit that will be Medicare approved and can work as a cash flow advantage to the consumer. We feel this will be something that the dealers won’t refuse as it has all the features and benefits of a bigger scooter yet it can be sold to a different market.”

Carson, Calif.-based Shoprider is broadening consumer options for scooter affordability by offering a Platinum Financing Program, which allows customers to borrow from $300 to $12,000 and repay it over a timeframe that fits their budget. Repayment terms range from 24 to 60 months and the interest rate depends on the customer’s credit rating, said Shoprider consultant John Wright.