Overcoming the Challenges of Adapting to Increasingly Lower Reimbursement
- By Scott Meuser
- Oct 01, 2011
The reality of doing business in
our industry in 2011 is that it
is no longer enough to run a
competent company that works hard to
do a good job for patients. While the
patient’s needs must always remain the
primary focus, to survive, businesses
must adjust their business models to
operate with the extreme level of efficiency demanded by razor-thin margins
that are the outcome of continuous
In the face of decreasing reimbursement,
true partnership between
providers and manufacturers is essential. Both must work to develop key competitive advantages. If a true
environment of reciprocation is not established between provider and
manufacturer, then both run the risk of failure.
When a provider partners with a manufacturer who truly understands
the needs of their business, there is still much that can be accomplished.
Aligning with a manufacturer that offers reliable products,
provides support from online resources to highly trained support teams,
and consistently delivers products in an accurate and timely manner
seems like a basic way to start your evaluation process. But this is just
the beginning. Providers and manufacturers must take a good, long look
at the symbiotic nature of their relationship and how it can be used to a
It Will Always Take the Right Products to Succeed
Regardless of ongoing funding challenges or economic downturns, we
have the responsibility to ensure that the products we manufacture and
provide maintain exceptional quality, reliability and deliver the performance
that our clients demand. Anyone can manufacture a low-cost, low-quality
product, but there is no long-term stability to gain in doing so.
While it may be enticing to try to boost your bottom line by purchasing
low-cost alternatives, this is extremely short sighted and not an effective
tactic for companies who are in this business for the long haul. As an
industry, we only hurt the people we serve and damage our businesses
and reputations in the process if we implement a strategy based on inferior
Providers must demand quality from manufacturers. Manufacturers
must devote their research and development efforts to create highquality,
low-cost products with long-term reliability that are designed
not only for the current environment, but to transition to meet future
The best practices of a provider should include partnering with a
manufacturer that delivers a wide range of affordable, durable products
and actively seeks input and feedback regarding what is needed in their
markets to succeed. This synergy makes it possible to develop products
that not only effectively meet patient needs, but make fiscal sense for all
Trust as an Asset
When any business faces uncertainty, trust becomes a commodity of
exceptional value. When we have faith in our partners’ capabilities to
support us in accomplishing our goals, we can operate with confidence.
We can more effectively meet challenges head on and plan for the future.
A provider must trust its manufacturing partners to provide the right
products and services to meet its needs. Therefore, it is imperative that
the manufacturer work in a manner that instills trust to the provider by
demonstrating a complete understanding of both current industry conditions
and forecasting of future needs. Short-sighted solutions and kneejerk
reactions to industry conditions are trust killers. Consistent performance
from manufacturers is a key trust builder. A manufacturer must
demonstrate that it is invested fully in the future of the industry and is a
partner for the long haul through its product and service offerings.
But providers must also instill this trust with their referral sources. By
staying current on technology, as well as the legislative and regulatory
environment, providers send a message that they can be trusted to do
right by the patient. In-services provide exceptional opportunities to build
strong relationships and build faith in your brand.
Trust is not something that you can simply ask for; it must be earned.
There needs to be a constant collaboration of thoughts, ideas and feedback
among all stakeholders to forge the strong relationships needed to
Efficiency Is the Engine of Survival
As available reimbursement declines and the world’s economic environment
continues to be in flux, across-the-board business efficiency is not
just important, it is essential. Every aspect of your business should be
carefully examined for opportunities to streamline the processes that are
working and to prune the ones that aren’t.
Providers should streamline the number of manufacturers they work
with to include only those that can meet a variety of product needs effectively
and efficiently. By creating product formulary guidelines to streamline
your inventory, providers can identify high-quality products that
meet a wide range of client needs while delivering true long-term value.
You can increase efficiencies and further reduce costs when your formulary
products are selected from one source.
This strategy will drive efficiencies in a number of areas, including
product ordering, receiving, assembly and technical service. Working
with one source delivers opportunities to reduce inventory and expedite
shipping, while lowering costs to make product service fast and easy.
Take full advantage of the resources a manufacturer can offer you. You can find a wide range of support services
that will make it easier for you to gain efficiency
in all areas of your operation. Look specifically
for a manufacturer who can provide products to
meet the demands of the industry, like practical
rental-ready products and attractive, affordable
retail products. Manufacturers should also offer
programs designed to help your business succeed
in numerous areas, including product planning,
financing and marketing support services geared to
meet your specific needs.
Actively Seek Untapped Resources
Despite the challenges, we all know that the demographics
show that significant opportunities remain.
The increasingly familiar statistic of 78.2 million
baby boomers turning 65 at a rate of one every 10
seconds is well documented and trumpeted in our
industry. The opportunity presented by these figures
is very real, but new methods are needed to tap into
Diversifying your revenue sources is a great way
to reach new customers. Retail sales, Medicaid,
private insurance, managed care and workers’
compensation are just a few of the many other
outlets you can expand into to supplement Medicare
Be active in your community and truly get to
know your clientele. Support those who support you
by building genuine and strong relationships with
local senior and disability groups to expand opportunities
within your service area.
Explore the feasibility of entering into offering
complementary services to further increase revenue.
For example, cash sales from home modifications —
including bathroom safety equipment, ramps and
stair glides and vehicle lifts and ramps — are areas
of possible expansion.
Do not underestimate the value of effective
marketing and branding strategies to reach new
clients. With fewer people allocating funding for
their marketing efforts, your marketing dollars go
further than ever before. It is much easier to have
your voice heard when you are the only one stepping
up to the podium.
Our industry is extremely familiar with adversity
and risk. The forecast, at times, seems to constantly
call for more of the same. But when providers and
manufacturers truly work together as partners, the
obstacles we face can be circumvented, and prosperity
can be found on the other side. It’s those who
stand alone and resist necessary adaptation that will
This article originally appeared in the October 2011 issue of Mobility Management.
Scott Meuser is chairman and CEO of Pride Mobility Products Corp./Quantum Rehab, based in Exeter, Pa.