'We're still in a good industry'
PORT WASHINGTON, N.Y. -- Rumors in the HME industry spread like wildfire. Just ask Drive Medical's CEO Harvey Diamond, who listens to the rumors but takes them with a grain of salt. For several months now, he's heard the rumor that Drive's in financial trouble. "I kind of chuckle," Diamond said in early January. "If Drive was in bad shape we wouldn't be doing acquisitions. Anyone in financial trouble doesn't announce acquisitions." Indeed, the company acquired Lifestyle Mobility Aids early last fall, and in late November picked up Peter Endres GmbH & Co., a European manufacturer and distributor of bath lifts and patient aids. HME News talked to Diamond last month about its latest acquisition and other issues related to Drive and the industry. Here's what he had to say.HME News: First of all, does your acquisition of Endres have any ramifications for the U.S. market?
Harvey Diamond: The company we bought is the second largest producer of bath lifts in Europe, and we believe it is a product line that can be sold in the United States. We also feel that there are many items within the Drive line--bath safety and manual mobility like rollators--that can surround the Endres line in Europe. So we feel we can bring products in both directions.
HME: You've heard rumors that Drive is in financial trouble. Is there any truth here?
Diamond: The acquisitions we've announced and the ones we'll continue to announce will put water on that smoke instantly. We continue to grow and are strong financially.
HME: What was your growth in 2006?
Diamond: About 28%. We are privately held so we tend not to give out dollar figures, but we are well in excess of $115 million annually. HME: Do you agree that providers need to adopt product formularies? That is, limit the number of products they offer in a given category to reduce inventory and other costs?
Diamond: I agree with that--that you have to keep the line narrow to turn the SKUs as often as possible.
HME: What can manufacturers do to help providers adapt to this new climate of reduced reimbursement?
Diamond: We have to put out a product that is good quality, that will last a long time and at a price providers can tolerate based on their reimbursement. It is important for us to also come up with items that have more than one use--two-in-one, three-in-one. Maybe the dealer only needs to stock one item that fills the purpose of three different items in the past.
HME: For example?
Diamond: A rollator that can turn into a transport chair. Even as prices go down, it is our job to put out products that are equal to or better than they were in the past.
HME: You've been working for a quite a while to develop a line of products with the renowned architect Michael Graves. Why haven't we seen anything yet?
Diamond: It's coming along much slower than we anticipated. The products are so different than what's on the market, and it's taken a long time to tool all the intricate parts. We believe the first series of products will come out this spring.
HME: What advice do you offer providers for these tough times?
Diamond: We're still in a good industry. Look at who you are partnering with. Find the partner you can count on. You want to be involved with partners who, if they make a mistake, will 'fess up and correct it. Also, find the partner that will be here for the long run.