Trying times demand action: What can you do?

Sunday, October 31, 2004

Each year at this time HME News offers me the opportunity to write an article that speaks to our partners - the supplier industry. This year, please allow me to reflect on where we have been, assess where we are and share my views (opinions)on where we might be headed.

These are pivotal and future shaping times for our industry. In talking with industry colleagues (partners, competitors, associates and government agencies) one thing is very clear, the HME industry is being tested and it is time for action. We must have a clear vision for what we want for this industry and a defined strategy to create the desired outcome.

We certainly aren’t without challenges. We are challenged in almost every market segment. Regardless of your business focus, you are going to be impacted by one, more or all of the outcomes related to ASP (average sales price), FEHBP (Federal Employee Health Benefit Programs), competitive bidding, coding, coverage and pricing policies regarding power wheelchairs, or Medicare’s regulation regarding accreditation requirements.

The economic pressures on our businesses are real, but there is also a need to improve our industry. Not only do we need efficient and proper business procedures and increased education, but we also need to build confidence in the integrity of our services. The industry has suffered too many reimbursement hardships when regulatory agencies respond to abuse of particular items of DME.

The HME industry is still relatively young and small in numbers in comparison to other industries. What can we do to strengthen and stabilize the industry in order to ensure that medically necessary items and services continue to be available to those that need them?

While I think most of us agree that we must take action, the problem is what do you do if you are a small or medium sized, independently owned company? You can’t afford huge investments of your personal time or dollars.

The obvious first suggestion is to combine your efforts and money with others like you through participation in state and national trade associations. They are there fighting the battles that you are most concerned about, and they need your time and money to help advance their efforts.

This is where some of you might stop reading. You might be tempted to put this article down and tell yourself you have tried that before. You don’t feel that you are big enough to make a difference, or you don’t have any time to give, or your voice is lost in the sea of larger members. Then partner with other small businesses that have similar needs, similar objectives and build strength, build recognition.

So, how do you get organized? How do you pull it all together? Especially since, you don’t have time or money for this to begin with. My answer - Industry Buying Groups.

Most suppliers think of buying groups in terms of pooling purchases in order to secure deeper discounts. I agree that is an important aspect of buying groups, especially given the reimbursement climate that exists. There are other critical advantages to being a part of a larger network.

The advantages are huge and are why Sunrise and some of our competitors have decided to form partnerships with the buying groups. I believe buying groups make for a stronger overall industry by providing education, whether sharing industry best practice regarding operations or keeping you informed on the latest regulatory changes, as well as access to tools that help you effectively manage and analyze your company and your company’s success. Buying groups are also very involved in advocating for the industry. That means they magnify your voice inside industry trade associations. With all the challenges facing our industry, a stronger voice will be needed.

I could list many reasons why if I were a provider - large or small - I would be an active participant with the buying group of my choice.

Together we can build a strong, professional and reliable industry for the people we serve.

- Mike Hammes is CEO of Sunrise Medical.