Marketing Mobility

A Changing Landscape Requires a New Direction

• By Scott Meuser
• Nov 01, 2010

Change is the only constant” seems an adage tailor-made for our industry. In the past year we have witnessed dramatic shifts in the American healthcare system.

The passing of the Patient Protection and Affordable Care Act has created a significant number of challenges, in addition to the implementation and expansion of competitive bidding and the elimination of the first-month purchase option for standard power wheelchairs in 2011.

Yet even in the face of considerable adversity, there is significant opportunity. The entrepreneurial provider understands that this is an industry with an ever-changing landscape, and that knowledge and flexibility are needed to adapt and succeed.

While at press time the industry was continuing its fight in Washington to stop competitive bidding and delay the elimination of the first-month purchase option for one year, all providers should plan for implementation as scheduled for January 1, 2011. In this new environment, efficiency and sound business strategy will make the difference between simple survival and continued success.

Plan to Succeed

Despite the new challenges, the data for overall industry growth speaks for itself.

There are 78.2 million aging baby boomers who have already begun demonstrating their willingness to pay out of pocket for the mobility equipment that helps them stay active. Currently, $256 billion is being spent, and that number is expected to increase by 10 percent each year.

To take advantage of that growth, providers need to expand their retail product portfolios. This active population of discerning customers demands high-quality, feature-rich products, so providers should stock their showroom with a wide variety of retail products. This demographic can also provide business growth via simple cross-selling opportunities. Offer complete mobility solutions. For example, vehicle lift systems are perfect companion products for scooter and power chair sales.

Another consumer segment with growing numbers is the bariatric population. Recent data shows that two-thirds of the adults in the United States are overweight, and one-third of that group is considered obese. Strong consideration should be given to offering a selection of bariatric products in your showroom.

As some providers exit the Medicare reimbursement segment of the industry in response to the challenges ahead, there will be a very real opportunity for those who remain to expand their marketshare. Those who are able to adapt and align their businesses with the new rules and regulations will be well positioned to grow their business.

With Group 3 complex rehab successfully carved out of competitive bidding, albeit with lower reimbursement levels, the standard power business is where the greatest challenge will lie. The elimination of the first-month purchase option for standard power wheelchairs will necessitate a shift in the way business is done, as providers wait 13 months to receive full payment. Providers should thoroughly examine how the Medicare rental business works in other segments of the HME industry to help develop a similar business model for their standard power business.

To succeed, providers will need to partner with manufacturers that truly understand the business and that have the industry’s best interests in mind for the long term. To succeed in Medicare rental, it will be necessary for providers to look at more than the bottom line.

Product Quality Is Crucial

History shows that most Medicare beneficiaries use their power chairs 13 months or more after initial issue. So unless the beneficiary enters an in-patient facility prior to the transfer of ownership, the original power wheelchair will be with them through the full rental period. For that reason, offering high-quality products will be even more important under the mandatory rental payment system than it is today.

The key to success in the rental segment is the understanding that warranty claims mean lost profits. You must offer beneficiaries power chairs that can deliver trouble-free performance throughout the 13-month rental period. The power chairs should also include components that are relatively easy to re-condition for efficient turnaround at the end of the rental period. Look for products that utilize efficient technologies, dependable motors and electronics that deliver long-term reliability with little to no service needs within the warranty period.

Providers should align with top-quality manufacturers, as your reputation depends greatly on the products you offer. When you deliver wellknown quality brands, you will be perceived by consumers as a reputable, quality provider. Your standard power products should deliver the features your customers want, while still delivering value. Positive word of mouth is a powerful marketing tool, and providing the right products goes a long way in terms of customer satisfaction. When you generate brand loyalty for your company and the products that you provide, you are building a strong consumer network that will want to continue to work with you.

Trust Is Invaluable

Choosing the right manufacturer is essential to your success in the new environment. Providers need to partner with a company they can trust not only to provide them with the right products, but also to deliver the business support and efficiency today’s industry demands.

Support manufacturers who continue to fight for you and your clients in Washington. Understand that by doing business with them, you continue to invest in the future of the industry.

The right partner will offer support services specifically designed to help your business grow in the current environment and will offer the tools, insight and education needed to help you to be ready for whatever comes next. While the industry will continue to evolve, it is important to see the opportunities that change brings, and it’s vital that you partner with those you trust to provide the products and services to help you take full advantage.

To succeed in this turbulent climate, it is imperative to lead your company with flexibility, adapting and evolving as industry changes dictate. Although this may alter the original vision you had for your company, it is the only way to succeed and thrive in the ever-changing reimbursement landscape.

This article originally appeared in the November 2010 issue of Mobility Management.