Consumer mobility intensifies retail focus

With reimbursement dollars drying up for standard power chairs under Medicare, it's no surprise that the category is becoming more retail-oriented in scope for mobility providers. Meanwhile, the scooter business—which has been a strong retail category for years—continues to expand and augment its product offerings.

Charting the decline of third-party provision for standard power wheelchairs, Chris Blackmore notes that “the number of providers willing and able to provide standard power has drastically dropped.” In order to continue providing basic power products under Medicare allowables, HME providers “count on selling the consumer some type of retail product or they count on their repeat business for another product,” said Blackmore, national director of business and product development for Cape Coral, Fla.-based Merits Health Products.

To be sure, “the mobility market is evolving into a more retail environment and trending away from the third-party payer system,” agreed C.J. Copley, executive vice president for sales and marketing for Old Forge, Pa.-based Golden Technologies. That dynamic puts more pressure on manufacturers “to be more innovative than ever to not only meet the needs of customers, but exceed their expectations as well,” he said.

To Greg Packer, president of Waterloo, Iowa-based U.S. Rehab, “Consumer mobility has become a much more risky opportunity in the market at the current level of reimbursement. With standard power moving to cap rental, reimbursement rates have made it even more challenging. It takes 13 months to receive full reimbursement for the equipment. Along with billing 13 times to Medicare, you need to bill each month for your co-payment.”

Forging ahead

Despite the challenges with Medicare reimbursement, some providers are continuing to operate within the system and some are even considering entering the business. What factors do they need to consider and how do they manage the business to keep it profitable?

John Wright, executive vice president of sales management and business development for Carson, Calif.-based Shoprider Mobility Products, says it takes taut control of the entire operation.

“Efficiency is necessary for every part of the transaction, from automating the order intake and referral source documentation processes, streamlining inventory control and logistics, and outsourcing or consolidating as many labor-intensive positions as needed within the company,” he said. “The provider that is willing to make these changes will always be viable as their competitors that are unable or unwilling to change, will dwindle over time.”

Cody Verrett, president of ROVI Mobility Products, Shoprider's rehab subsidiary, adds: “I think they first need to understand all the ins and outs of the entire process, so they can lay out the best options for their customer. It's no secret the boomers have a substantial amount of discretionary savings and they don't always want their mobility limited to just what their insurance will cover. The successful provider needs to clearly lay out all the options for their customers and then let them decide which choices are best.”

Scooters roll along

As consumer mobility intensifies its focus on retail, the scooter category has benefited from cash sales for several years, market analysts say. By appealing to consumer preferences, manufacturers have increased the aesthetics and developed new technology to keep the category relevant and vibrant.

“Scooters are a much more popular item in the retail market and those who use this product are using it more for age-related reasons versus actual disease-driven cause,” Packer observed. “Scooters can be a great aid to get people around on vacations, fairs, or events but are more limited in use around the house due to maneuverability.”

New generation scooters offer more attachments and are built for longer transport, Packer says, “like a mini car, so the user can go down the block to the store and over to a friend's house and not be just confined to their living area.” Advancements in weather protection with covered scooters allow users to use them in the rain and snow, as well, he said.

Indeed, the scooter offerings and options over the past few years “have drastically changed,” Blackmore agreed. “Travel scooters are lighter, more compact and easy to assemble or fold. There are also great options for scooter with suspension, impressive travel ranges and increased top speeds.”

Moreover, the breadth of the scooter line has dramatically expanded to include many more options, colors, and quality available today, Copley added.

“Medicare only pays for indoor devices for those people who are approved with a certificate of medical necessity,” he said. “But we know that people want to live their lives and want to be able to go outside and therefore they look for a selection to fit their need.”