HME News

SEP 2017

HME News is the monthly business newspaper for home medical equipment providers. This controlled circulation publication reaches 17,100 home medical equipment services providers, including traditional HME dealers & suppliers, hospital- and pharmacy-o

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Providers 16 WWW . HMENEWS . COM / SEP t EM b ER 2017 / HME NEWS By Kelly Bo T hu M , Contributing Writer W I th co NS u M er S continuing to go online to research and purchase home medical equipment, a new website aims to connect patients and caregiv- ers with information about in-home services, including h M e and local providers. h ome Because ( is intended to be a first point of contact for consumers who have questions about home Website aims to be point of contact medical equipment, aging in place and other issues but may not be aware of local resources that could assist them in their purchase, said c arol Lockett, the site's creator. " t he goal is for it to be an info hub, a resource where people can go," added Lock- ett, who has past experience selling medical products for an e-commerce retailer. "It's hard for someone buying their first wheelchair to be able to answer the question, ' h ave you thought about a wheelchair cushion?' It's much easier to do that if they are reading about it instead of just feeling upsold." o ne of the highlights of the website is the "provider search" feature that allows the con- sumer to select a product category and local radius, then find a local provider. With a few clicks, consumers can research bath safety products, ramps and vehicle lifts, and then find providers who can help them with addi- tional questions or purchases. " p articularly with DM e , consumers don't know where they can turn," Lockett said. "We want to educate people about the ben- efits of dealing with a local provider and not just addressing their immediate needs, but also taking a look at their environment." t he website launched a couple months ago, but already the response from DM e providers has been overwhelmingly positive. "Many providers aren't doing this target marketing like we are," Lockett said. "Instead of spending more to advertise on a ballfield banner or restaurant placemat—things that may not be bringing them their demograph- ic— we can do that." HME h M e / h ospice c loud earlier this year. NSM and National h M e are both backed by pe firms. "We timed our sales around a lot of dif- ferent factors, but right now, we're in a very good market to sell," said Feltman, president and ceo , and a co-owner of the company with David h artley. " t wo years from now, I'm not sure it will be that same market." h artley bought h ome h ealth Depot in 2004 for $85,000. A former manufacturer sales rep for companies like t iLite, he ini- tially focused on building a complex rehab book of business, but after bringing Feltman on board in 2010, the company diversified into respiratory and other product lines. t ogether, h artley and Feltman, who each owned 40% of the business at the time of the sale to Lincare, grew h ome h ealth Depot into a regional presence by 2014, with 260 employees in 25 locations in six states with revenues of $32 million. "It was a good run," Feltman said. "Dave and I feel like we did what we set out to do, which is grow a really nice company, and do well by our investors, employees and patients." During its heyday, h ome h ealth Depot was following the industry man- tra of diversification to a t , but it began selling off businesses in 2014 because management felt it was spread too thin, Feltman says. "We grew so fast," he said. "We had five different divisions with five different sales forces and five different software programs. We started to feel like we couldn't pay attention as much as we needed to." After shedding its complex rehab, home access and hospice businesses, h ome h ealth Depot could have homed in on the rest of its business—respiratory and h M e —with specialization replacing diversification as a strategy for many providers, at least on the product side. But Feltman says it would have been difficult to do "comfortably." "It would have been a massive change on the run—a massive change to management, which was set up for a bigger company, to staffing and to our customer base," he said, "and it wouldn't have released any value for our work and our investment." While one could look at h ome h ealth Depot's deci- sion to sell as yet another sign of the downturn of the industry, Feltman doesn't see it that way. "It's not like we sold a dis- tressed company; we sold a successful company," he said. " t he message is you can build a business and it can be attractive to other companies and private equity." Industry analyst Don Davis agrees that, from a business standpoint, h ome h ealth Depot has been a success—it grew, became attractive to several buyers, and then sold. "But from an industry standpoint, you feel bad when a company like that, that's regional with young smart talent, leaves the market," said Davis, president of Duckridge Advisors. HME protocol, intentionally or unintention- ally, 'We just have to get it done and if we get denied, then we'll appeal it.'" t hat, Stark says, creates a never-end- ing audit loop that's extremely difficult to get out of. " e veryone should be vetting their orders and only put out product that they feel should be payable and meets the stan- dard," she said. " t hen they can reap the reward of being exempt and having fewer audits over the course of the year." h ome o xygen c ompany received a similar oxygen reprieve about two years ago. h aving two concurrently is especial- ly rewarding. e wert credits her staff— especially those on the front end. " t hey get (what we need) upfront and we have a clean process right through billing," she said. HME serving patients for the duration of a rental period for DM e , including oxygen and oxy- gen equipment. It's understandable that providers in c alifornia might feel the local respiratory market is on shaky ground. e arlier this summer, Life c are Solutions announced it would exit the c alifornia market, blaming reimbursement reductions of up to 40%. t hat announcement came in the wake of p acific p ulmonary's agreement in April to pay $11.4 million to settle allegations it participated in a kickback scheme and its subsequent decision to lay off 170 employ- ees in July. Starck agrees reimbursement rates are "alarming," but says the industry bears part of the blame. " t he pricing is alarming, but what is more alarming is whether people really understand why the industry is where it is," he said. " t he government didn't bid these prices." AA h omecare hasn't heard of any issues related to grandfathering, says Kim Brum- mett, vice president of regulatory affairs. "Grandfathering was the right thing for c MS to do," she said. " t he patients didn't have to switch suppliers—as far as they were concerned everything was the same. e very now and then, I heard a supplier say, 'We're not going to grandfather our patients,' but it's a stupid thing to do. You've lost the contract so you've lost revenue." HME whether it's through u ber or whether through personal care assistance. With the ability to better understand what's happen- ing for the patient, you can match them to an appropriate provider and fill in those gaps. HME: How is this going to create a dramatic shift in health care? Wogen: I am not one to say clinical judgment is not always going to be absolutely criti- cal to managing these patients. But the more data that's available, the more you can learn and the more you're able to see relationships no one could see before. HME: With all this data monitoring, how do you keep from being Big Brother? Wogen: t hat's always a concern. h I p AA, industry health plans and c are c entrix think about this every single day. t he machine learning technique will get to the point where there's very little infor- mation you need to know to make a decision—you'll be able to cluster patients based on high-level, basic information but it's something that always needs to be watched and moni- tored, and people will always have the right to opt out. HME provider is nearly 100% respiratory, with sleep comprising 50%. "We've seen the ebbs and flows of the industry—just when you get comfortable, something new gets thrown at you," said h ogan. "We've been around long enough to know that the dust will settle. If we remain vigilant at what we do, we will continue to grow." HME RE p R i E v E c o n t i n u e d f r o m pa g e 1 5 WO g EN c o n t i n u e d f r o m pa g e 1 5 g RANDFATHER i Ng c o n t i n u e d f r o m pa g e 1 5 HOME HEALTH DE p OT p ULLS TR igg ER , SELLS TO L i NCARE c o n t i n u e d f r o m pa g e 1 HEALTH COM p LE x c o n t i n u e d f r o m pa g e 1 5 " t wo years from now, I'm not sure it will be that same market." Nate Feltman Steve Wogen

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