About that sales slump…
The word on the street is that it has been a tough year for manufacturers, especially those that make wheelchairs. There have been confirmed layoffs at Invacare and rumored layoffs elsewhere.
When I talk about this with people, I’ve always had this in the back of my mind: If nothing has really happened to decrease the demand for wheelchairs—in fact, with the baby boomers, there should be an increase, right?—why the sales slump?
Silly, silly me.
Invacare gave plenty of food for thought on this subject recently, when it reported a 7.4% decrease in net sales for North America/HME for the second quarter of this year:
“The sales decline is primarily related to uncertainty in the industry as it gets closer to the Fall 2012 announcement of bid rates for the next round of National Competitive Bidding. Customers are taking extra caution to leverage their existing product inventory. In addition, the Company continues to see slowness in power wheelchair sales in the United States due to the ongoing uncertainty and general slowness in the market where mobility and seating customers are dealing with prepayment reviews and other types of audits of power mobility devices from Medicare and Medicaid.”
So in sum, the demand for wheelchairs is still strong, but providers aren’t stocking up on as many wheelchairs, because they’re in a holding pattern, which results in decreased sales for manufacturers.
In the short term, providers are in a holding pattern due to the rampant audits that have made providing wheelchairs a more lengthy and more frustrating process. In the long term, they’re in a holding pattern until they know whether or not they’ve gotten a contract for Round 2 of competitive bidding and at what price.
To put it simply, according to a long-time industry stakeholder: “Pressure on the provider is pressure on the manufacturer.”
Of course, it’s even worse than that. Pressure on the provider is pressure on the manufacturer…is pressure on the patient.
Take this scenario: A provider closes from the affects of competitive bidding or rampant audits. A manufacturer can no longer sell equipment to that provider. Heck, the manufacturer may even take a hit because it’s still owed money by that provider for equipment he already purchased and hasn’t paid off.
What does this all mean for the patient who got a wheelchair from this provider?
You get the idea.
It’s amazing how providers, manufacturers and patients are all in this together, for better or for worse.
That’s something that’s easy for those in the industry to forget, never mind CMS officials and lawmakers.