Demand, Diversification and Retail, OH MY! Keys to Surviving the Next 18 Months

HME Voice: Diversification Retail Survivial

You always hear about “must-see” events on TV these days. Well, folks, I’m telling you that our latest episode of HME Voice is a “must-listen!” We were joined by three guys that will be presenting at the Medtrade Conference in October as part of the “6-4-18” series of six building blocks for survival and success in the HME industry in the next 18 months.

Our first guest was Brian LaDuke, Vice President of Enterprise Marketing at Invacare. As one of the leading manufacturers of home medical equipment products, Invacare has the resources to look at the industry as a whole, and Brian said despite the gloomy feeling in the industry, it’s a good place to be.

“Clearly this industry is facing its challenges, but we really see that there’s a second side to this story, there’s a page two and there’s a lot of opportunity for success in this industry,” Brian said. “The Baby Boomers are clearly aging…so being in the home medical equipment space, from a demand standpoint, is a great space to be in. We all just have to learn how to do it more effectively in order to generate the profit that we all want.”

Brian also touched on research done by Invacare about the quality of products the most financially successful providers are purchasing. In their research, the most financially sound providers are purchasing higher quality products.

Brian said that in the race to cut costs, many providers are switching to cheaper, lower quality products. However, this doesn’t always help as lower quality equipment, while initially less expensive, incurs more maintenance costs.

Stocking quality products was also a point touched on by our second guest, Bruce Brothis of Allegiant Billing and Consulting, Inc. By having a good-better-best stock of products available in a retail setting, you appeal to the changing demographics of the people making purchasing decisions, Bruce said.

“It’s typically not the patient coming in and visiting the DME store anymore, its typically the son or daughter, nephew or niece that’s caring for that person, and typically they have disposable income,” he said. “They’re making the purchase decision right there on the spot and typically are not happy with the bare-bone minimum offerings; they like to have more upgraded products, and they’re willing to spend [the money].”

Bruce also provided a few tips about finding success by switching to a more retail-based model. Being stuck back in the corner of a business park isolated from high-traffic areas is no longer going to work. For a retail plan to succeed, Bruce recommended having at least 800 sq. ft. of space that’s in public place with a lot of drive-by or foot traffic. A successful retail DME operation also needs to have the right sales staff, said Bruce.

“Retail sales is not a place for order takers in the DME world,” Bruce said. “Retail is not grocery store retail, it’s retail with some people on the floor that can cross-sell and know what they’re talking about.”

Finally, Bruce touched on operating efficiencies, and how the biggest part of finding success is finding the right number of employees and making sure they are trained, especially those in billing or reimbursement positions.

Our final guest was Jonathan Sadock, Managing Partner and CEO of Paragon Ventures. As someone who works with valuing companies for sale and purchase, Jonathan was able to give us a unique look at the industry. He said that whether you are looking at selling your company or acquiring another business, being idle is not an option in today’s industry.

“To move forward and survive, business owners need to be active in one sense or another,” Jonathan said. “Now is not the time to be sitting idly by and watching what everybody else does and hoping you can squeeze with business as usual. In fact it’s business as unusual.”

Jonathon was able to give us some insight into what factors increase or decrease the value of a company, such as:

  • Do you have contracts?
  • How the business is managed: do you purchase well?
  • Do you manage your employees well? Are people working at efficiency?
  • Are you maintaining your equipment well?
  • Your company’s relationships with other payers besides Medicare (big hospital systems, etc.)
  • A strong sales team with great relationships with accounts and referral sources

As if the importance and opportunities created by a retail model wasn’t apparent already, Jonathon confirmed that in the eyes of financial experts, retail and similar models are the way to go.

“The models in which they’re making it easy for a patient to come into your store and to upsell them on products and services that you’re offering on a cash basis, is absolutely looked at, especially by the private equity firms, as part of the future of how this industry is going to evolve down the road,” he said.

People, we are in a time of change in our industry; we all know this. But not all news is bad. The demand for our products and services will continue to grow, we just need to find new ways of working to succeed. Success can be had in the coming months, but it depends on you to go out there and get it.

I’d like to thank my wonderfully insightful guests, Brian LaDuke, Bruce Brothis and Jonathan Sadock for joining myself and Kevin Gaffney on the HME Voice. You guys provided a ton of great information, advice and tips, and now it’s up to the listeners and readers to get active. Until next time, stay safe and keep a positive mindset in your work!

A Quadriplegic Business Owner, A Turn-around Artist and an Amputee Veteran Enter a Booth…

HME Voice

In the middle of a business or life crisis? Learn from the Masters on how to overcome any challenge you are facing.

I was so excited for this latest HME Voice show, as we were addressing the question of “How do we get out of this?” surrounding everyone dealing with competitive bidding. Our guests provided a ton of great insight into dealing with adversity and facing the facts in difficult situations.

Liz Beaulieu of HME News gave a brief update on a bonanza of stories on competitive bidding to start off the show. The amount of frustration is concerning, especially on the part of the beneficiaries.  Everyone, from HME providers to those in desperate need of medical equipment, is still very much fighting competitive bidding. As I said, there is an overwhelming feeling of “How am I going to get through this?” Well, the reality is all of us will face a crisis that will threaten our existence.

Mike Sperduti and Kevin Gaffney

Mike Sperduti and Kevin Gaffney conducting interviews for the HME Voice.

Our first guest, Bryan Anderson of Pride Mobility Products, offered up a few philosophies on how to overcome a difficult personal situation and how that relates to business.

Bryan lost both legs and his left arm below the elbow while on a tour of duty in Iraq for the U.S. Army.  This man is a hero in every regard, from fighting on the front lines for our country to facing his physical challenges head-on and making the most out of his experience.  As our lead-off guest, Bryan spoke to those who are, at this very moment, facing a threat in either their business or personal life.

“The military trained us not to panic in high stress situations, calm down and process everything so that you can think your way through,” Bryan said. “I didn’t want to put any limits on myself.  I wasn’t going to be that guy that says, ‘I don’t have any legs, I’m not going to climb a tree.’  I’m not gonna tell myself that until I try to climb a tree.”

Bryan did just that when faced with a losing three of his limbs. “I passed out in the helicopter, woke up 7 days later at Walter Reed.  I started looking around and assessing myself,” Bryan said.

He took an active approach to his life, something he could do because he accepted his situation. He snowboards, wakeboards and skateboards, and is planning to go surfing in December. While his situation is unique, Bryan believes he’s no worse off than anyone else.

“A lot of people assume I have it worse than most people and they have no right to complete, but we all have our own issues and handle them in our own way,” he said. “If you believe you can do it, you can do it no matter what your situation is.”

Bryan encouraged everyone to use the tools they have around them to help improve their situation. He also said you have to realize that panicking about the situation you’re in will only make it worse. By calming yourself down and processing the situation in front of you, you can put yourself in a position to make better decisions and come away with an acceptable solution to the problem.  Instead of dwelling on your problem, face the facts and act.

Second in our lineup was Regis Farrell a nationally-recognized turn-around artist.  Not only is Regis my personal mentor, but he is by far the best at what he does, and really hit the nail on the head as far as what HME providers can do to resuscitate their business.

Regis said that in order to turn things around, a plan for growth needs to be made, the right leadership team needs to be in place, the plan needs to be communicated to everyone and that employees need to be rewarded for success and growth. But all this is easier said than done, right? Well, Regis provided a few details to fill in the blanks.

To create a plan of growth, you need to gain an understanding of the financials from the last three to four years. What has increased, what has decreased?  Once you have a solid understanding of your financials, you can identify where you need to grow. However, you also need the team to get you there.

Interview all managers and people in leadership positions about their short and long term goals. You need to make sure your leadership team wants to grow, has the skill sets to do so and are qualified to be there, Regis said.

Once you have your growth plan and leadership team, the leaders need to communicate that plan to everyone – employees, investors, shareholders, lenders and all other stakeholders. This not only helps everyone stay accountable, but also shows investors and lenders “here’s where we are, here’s where we’re going, and this is what we’re doing to get there.”

Finally, you need to boost morale with quarterly bonuses. Yes, we know you may be strapped for cash, but when sales goals are hit and revenues are made, a simple thing like a bonus (based on how that person helped reach the goal, not a hand out) can go a long way toward creating a better working environment.

Regis is the man, so you can take all these suggestions to the bank!

We ended our show with Steve Kitchin, president of Indiana-based ConvertaStep.  As another individual who has overcome personal tragedy, Steve is acutely aware of needs in the disabled population and has applied lessons learned from his physical challenges to business practices at ConvertaStep.

Steve talked about his reaction to waking up one morning as a quadriplegic, as a result of an auto accident.  “Redefine yourself,” Steve said.  “There is no way you could be the person you were in the past, but think about what you can be now.”  He went on to tell us how you’ve got to accept what you can’t control and build from your assets to ensure your future.

Steve described a time shortly after his accident when he remembers a Christopher Reeve book just hitting the shelves called “Still Me” and thinking, “No, I’m not.  I can’t be the same guy that I was.  I’ve got to do things differently because if I still try and be me, I’m going to have nothing but frustration.”  This is a perfect example of the mentality Steve applies to his business practices.

Steve said the key is to accept what you can’t control, but find new ways to break through to success. This ties in perfectly with the issues facing HME providers right now with competitive bidding. While we are in no way giving up on an alternative solution to DMEPOS competitive bidding, we do have to accept the new rules for the time being. However, that shouldn’t prevent you from exhausting all other options of finding revenue to keep your company alive.

I want to sincerely thank our guests, Bryan Anderson, Regis Farrell and Steve Kitchin for speaking with us for this show. You guys are rock stars and inspirations for those in the HME/DME business right now looking for a way to get around competitive bidding.

People, I encourage you to take what these guys talked about and apply it to your life. Tough times call for acceptance of the difficulties at hand and the courage to look for change. I hope you all are able to find something that inspires you to take action and know you can overcome ANYTHING after this edition of HME Voice.

Click here to listen to the most recent HME Voice!

HME Voice 1: Mal Mixon Delivers Perspective in HME

It’s been one week since we hosted our first radio show, the HME Voice, hosted by Medtrade Group Show Director Kevin Gaffney and me, Mike Sperduti.

Invacare Chairman Mal Mixon

Invacare Chairman Mal Mixon

This first show featured Invacare Chairman Mal Mixon, News Anchor Liz Beaulieu from HME News and special guest Ryan Ball from The VGM Group.  There were great discussions about the hurdles our providers are experiencing currently and predictions for the future of the HME industry.  What Mr. Mixon was able to deliver perfectly was perspective.

If you listened in on the show, I think you’ll agree that Mal Mixon has clearly seen it all.  He has been to every single Medtrade, he has experienced success and failure in HME and he has been a major player in the industry for over three decades, transforming a small wheelchair manufacturer to a leader in the HME industry.

At the very beginning of our interview with Mal, we had asked him about his story, where he came from and what he did before joining the HME industry.  His views on life reveal why he is able to remain confident about the future of HME.  Mal reflected on what he learned from serving in Vietnam.  He said, “People today get upset about the damnedest things.  I can tell you there are things to worry about and things not to worry about.”

In my experiences, I have met a lot of people who thrive on drama, who believe everything is a big deal.  I’m sure you have several people in mind right now that fit this description.  They get worked up over the line at the grocery store or if a customer calls at the end of the day and this causes them to stay after hours.  They live for making things bigger than they really are.  Competitive Bidding is doing this for many in our industry, these people are freaking out.  Mal Mixon put everything in perspective.

At the end of the day, if you have your health, your house, and your family, then it’s all good.  If you put things in perspective, then obviously things are never as bad as they seem.  Unless something is fatal, there is hope.  If we try harder to live life by the same philosophy that Mal has, then you we will have a happier life.

Considering all of his experiences, Mr. Mixon is not worked up and still firmly believes in the fundamentals of the industry.  He believes in the fact that population is aging, they want to stay at home and it is cheaper for us to take care of them at home.  We can take comfort in the fact that it Mr. Mixon still believes we have a bright future.  It might be a rocky road today, but there will be sunshine after this storm.

I highly recommend going to this link for the HME Voice and taking the time to listen to the entire show.  What I took away from this first show experience is the fact that the future is bright for the HME industry, for Mal Mixon and for the HME Voice.

Where does HME Voice go from here?  Expect to see us around at Medtrade.  We will be interviewing the HME thought leaders and manufacturers on breakthrough technology and the future of our industry.  We will be airing those interviews sometime in October.  If you have any good ideas or want to see the radio station, stop by.  We’ll have the station set up in the exhibit hall at booth 2828.