The times - they've already changed

Thursday, February 28, 2002

You'll see some significant changes in the structure of HME News this month, based entirely on changes that are occuring in the industry. It's been almost a year since I joined the publication, and editor Jim Sullivan and I have concluded that there are a number of new truths that are now self-evident in the HME industry. I'll try to adress them now.

1) Re/hab has become it's own niche, as have HMEs with pharmacies and other specialties. Since the Balanced Budget Ammendement of 1997 cut into everyone's margins, these groups tend to specialize - only 5% of Re/hab providers in HME News' circulation, for example, also provide oxygen services. To refer to these specialists as "mobility" providers is an outdated concept, and lumps them together with full-service HMEs that typically provide oxygen, retail items (think scooters) and commodity durable equipment. This month HME News will dedicate two new sections of this newspaper - one for "Re/hab," and one for "Rx and Specialty Providers."

2) You can't separate basic mobility services from respiratory services. The latest AAHomecare Survey on financial performance shows something that industry experts have know for a long time - gross profit margins for respiratory reimbursement are significantly higher than those for other product categories (more than 10% higher, to be exact). Indeed, in our own circulation at HME News, roughly 70% of our 17,000 readers describe themselves as full-service HMEs, and well over 50% of those provide oxygen equipment. It's clear that the majority of HMEs selling commodity mobility equipment depend on oxygen reimbursements as a high-margin part of their product mix. Therefore, you'll continue to see a "Providers" section in HME News that covers both commodity mobility and oxygen.

3) It's harder to distinguish between manufacturers and distributors. Just this month, manufacturer Graham-Field announced that it would outsource all of its manufacturing activities, while mobility provider Bruno stated that it would do the same with much of its manufacturing. They follow examples set by Invacare, Sunrise and most other North American manufacturers. At HME News, we've long presented separate sections of the newspaper on these supplier sets, because such news from the supply chain is vital to HME providers. We will continue to present news on the HME supply chain, but will consolidate the two sections of the newspaper into single section entitled "Vendors."

These new spokes to the wheel of HME News' coverage reflect what's actually happened in the industry - the new sections based on what our readers are actually doing, not on catch-all categories that are easy for us, or our advertisers. We hope you'll appreciate our renewed efforts to provide you with the most timely, well-organized news available. HME