You aren't dead, neither is your biz
In 1958, Thurma Sobczyk and her husband Dan built their home in a working class neighborhood in Omaha, Neb. Dan was a plumber and did much of the work himself. It wasn’t fancy, but it was the perfect place to raise a daughter and pursue their version of the American Dream. Dan died many years ago. The neighborhood changed over the years, but Thurma remained in her home past her 89th birthday.
Two years ago, just one week after braving the Black Friday crowds shopping for bargains, Thurma broke her leg. Surgery, rehab and institutionalization followed. Pulled out of her home, frail and frightened, she displayed a quixotic mix of confusion and determination. She got through the day by dreaming of the house she and Dan built. Each morning, she asked, “When can I go home?” She drifted off to sleep each evening dreaming of going back to her home of 53 years.
I know many of you are wondering if you should still be in the HME business. With competitive bidding in place, auditors running amok and reimbursements dropping, the sky appears to be falling. Still, the unequivocal answer is that this is still a good business with a huge future.
Thurma was born before the baby boom. She got older, as we all do, and her body slowed, her health deteriorated and her need for interventions grew. America is in the early stages of an epic growth in our senior population, the likes of which have never been seen. During the next 30 years, the number of seniors will increase by 40 million. By comparison, in the last 30 years, which have been a boom time for our industry, the number of seniors increased by 15 million. Disease states requiring medical equipment and assistive technology are growing rapidly, some tied to the aging population and some independent of it. Obesity, diabetes, respiratory disorders and mobility limitations are all on the rise.
Thurma desperately wanted to stay in her home—and so does everyone else. You don’t need a study to prove that. Just talk to your friends, parents and grandparents. Better yet, walk through a nursing home and talk to the residents. They are filled with people of every shape, size, creed and color. They dream of going home.
While Medicare bureaucrats may not currently recognize the value of keeping people in their homes, I don’t believe they can remain oblivious. Fixing our nation’s healthcare problem will require a shift toward strategic thinking about costs, investments and quality of life. The “fix” will inevitably lead to additional market opportunities.
But Thurma’s story also reminds us of stark realities. Change happens, even when we don’t want it to affect us. We don’t have a choice but to change. Payers are going to pay less for each unit of health care. Insurers’ power is being concentrated at an alarming rate. Inadequate fundamentals plague healthcare operations, including HME companies.
We must get better at our operations: more efficient, more cost-effective, more quantitative about outcomes. We need more standardization, leverage of best practices, and investments in important technology and new opportunities. Stark realities require us to look forward, to think differently. The pace of change requires us to do it sooner rather than later. Some companies recognize change, and figure out how they can use it to their advantage. Others fight to maintain the status quo. They see change as a threat. Still others sit back and wait, paralyzed by fear, or perhaps in denial. Standing still is deadly in today’s environment.
As weeks turned to months, Thurma’s once sharp mind descended rapidly into nothingness. Forgetfulness turned to confusion. Confusion cascaded into darkness. A strong mind and her story of a life well lived slipped into a black hole. Her descent was accelerated by no longer living in her home. The home holds the key to many healthcare challenges and we are positioned to play a key role. Medical equipment and our supporting services have led to an increased quality of life for 50 million people in the past two decades. That matters. Thurma, my wife’s grandmother, dreamed of going home all the way up to the day she died earlier this year. But you aren’t dead and neither is your business. It’s time to end the grieving over what has happened and start building your business model equipped for a bright, but different, future.
Mike Mallaro is CFO/CIO of VGM Group, Inc. He is a frequent presenter on strategic planning, benchmarking, financial analysis, the Internet and healthcare trends. Reach him at email@example.com.