Are HME providers overcoming retail reticence?

The concept of retail is not new for the HME industry. Its past stretches back decades, though it has had trouble gaining traction among providers. That may finally be changing, however, as attitudes become more receptive and opportunities continue to grow. 

Tim VanAntwerp, director of retail services for Waterloo, Iowa-based VGM, says overall numbers may not indicate robust retail growth across the industry, but those individual companies adopting a retail component appear to be on the upswing, he said, 

“The status of HME suppliers is a spectrum from about 3% retail to a few companies that ‘get it’ and provide retail services with the same enthusiasm as they service the larger payers,” VanAntwerp said. “These companies might be doing 15% to 20% retail, but that is still rare in my experience. Then there are a few companies that have embraced retail at 100%, they don’t have Provider Transaction Access Numbers and they do not bill third party payers. These total retail HME companies are few but a growing segment of our industry.  Competitive bidding and perhaps COVID moved some companies into this space.” 

Sue Chen, CEO of Carson, Calif.-based NOVA Medical Products, traces the growing acceptance of retail back 15 years during the time of substantial Medicare reimbursement cuts. At that time, providers considered adopting a retail-reimbursement hybrid model, which exposed them to the freedom retail offers, she said. 

“As they started getting more comfortable discussing retail with their clients, they got really good at it,” Chen said. “More and more are becoming 50-50 and creating an all-retail plan. Many of them are now all retail. In fact, the new dealers coming in have no idea about reimbursement.” 

Sharp reimbursement cuts are also impacting independent pharmacies, she said. Retail in this sector has evolved to include national HME franchises like Mobility City and Mobility Plus. 

Merchandising is an area where HME providers have shown more interest, said Ritu Jani, senior director of business development for Port Washington, N.Y.-based Drive/DeVilbiss’ North American Retail Division. 

“There is a lot of interest in shifting to retail as many DME locations have the space to display and merchandise products in planograms,” Jani said. “As the category and Baby Boomer population grow, the need for the product has increased. By creating a retail showroom or storefront it provides caregivers and customers more options and the ability to understand the product line further.” 

Does size matter? 

One of the big challenges for independent HME retailers is competing against the giants of retailing – specifically Amazon. Yet Kathy Davis, medical sales director for Charlotte, NC-based Contour Products, believes there is an opening that providers can exploit. 

“Despite Amazon’s significant presence in the e-commerce market, the majority of retail sales still occur in the brick-and-mortar stores,” she said. “Many people continue to prefer the in-person shopping experience, and various retail sectors like groceries, clothing and health products, heavily rely on physical stores. 

It’s crucial for retailers to understand the importance of having a strong physical retail presence, as well as an effective omnichannel strategy that integrates both online and offline sales.” 

Embracing the brick-and-mortar approach allows retailers to reach a broader audience, cater to various consumer preferences and leverage the strengths of each sales channel, Davis said. 

“In many cases, physical stores offer advantages, such as immediate product availability, the ability to touch and try products and personal interactions with knowledgeable staff,” she said. “These advantages can’t be fully replicated in the online shopping environment. Therefore, retailers should focus on enhancing their in-store experiences, building strong customer relationships, and differentiating themselves in ways that online giants like Amazon cannot easily match.” 

Steve Wakser, senior vice president of homecare sales for North and South America at Drive/Devilbiss, contends “the success is in educating the caregiver and shopper. The information the provider furnishes to them helps with the product selection and decision making.” 

Chen issued a reminder that HME comprises “products people hope they never have to buy.” Because of that mindset and emotional state, providers must offer services to help the customer make decisions, she said. 

“Empathy is something that Amazon and Walmart can never do,” she said. 

Optimal retail strategy 

There are various strategic options providers can pursue for retail, but VanAntwerp recommends focusing on staff training with the same intensity as with Medicare billing. 

“Invest the same time and talent in training for the staff to work in retail,” he said. “We know how to fit, advise, setup, assemble and instruct on our products. We must train staff to engage in the retail discussions, to explain the benefits and features, and to ask for the sale.” 

Company mindset is another key factor, he said. 

“I don’t often propose a top-down management style, but in retail, leadership has to embrace the business,” VanAntwerp said. “Objectives and results need to be supported by leadership. Results need to be planned, shared, supported and rewarded. Just as it’s a big deal to take Medicare, it should be a big deal to fake retail.”