Ops Management

Overcoming the Challenges of Adapting to Increasingly Lower Reimbursement

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 reimbursement challenges.

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 mutual advantage.

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 products.

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 challenges.

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 vested parties.

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 succeed.

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 this potential.

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 sales.

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 not persevere.

This article originally appeared in the October 2011 issue of Mobility Management.

About the Author

Scott Meuser is chairman and CEO of Pride Mobility Products Corp./Quantum Rehab, based in Exeter, Pa.

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