Five lessons learned from an HME newbie

The following guest commentary expresses a few things that I have learned during my first six months in the HME industry. For some readers, what follows is surely well-known. Others may shake their heads in disagreement. But this commentary isn't really for them. This commentary is for those just entering the industry like me.

1. Rural providers, like my company Grace Healthcare, needn't follow the same business model as national providers. It is typical when entering a new and unfamiliar industry to look toward larger and, oftentimes, more profitable companies as the standard bearer whose business model should be followed closely. However, unlike larger corporate providers, providers servicing rural areas have a tendency to understand their mission in terms other than profit, loss and dividends. The primary question they address is: “How can we be better stewards of our community?” To be sure, a profitable company is necessary in order to be a community asset. But corporate visibility is higher in cities with smaller populations; accordingly, every act a company undertakes (or does not undertake) is magnified. Margin for error is thin. At the same time, though, higher visibility makes doing-the-right-thing more profitable, and can, in turn, increase revenue.

2. The retail sale of HME products is wholly different from the retail sale of other commodities. For novices with either much or little retail background, your experience in other retail environments will likely leave you unprepared for HME sales. In many ways, retail sales of HME lags far behind other retail sectors. From my experience, the POS systems are less user-friendly and more time consuming to learn. Additionally, replenishment times are much slower than in other industries. Finally, you are going to have to learn an entire new vocabulary filled with industry jargon. All this can make for a frustrating transition for those new to HME retail. But with a little patience and perseverance, the novice should be quite capable of making the transition, and making it smoothly.

3. Have you heard of competitive bidding? If you are reading this newspaper then the answer is probably yes. But you shouldn't expect everyone to be familiar with the bidding program. Competitive bidding's ramifications are not well understood outside of the DME industry. I was assigned the task of overseeing the Round 2 bidding process for Grace Healthcare. Initially, I was under the impression that the bidding program was well-understood by providers, doctors and the public alike. It goes without saying that my expectations were unfounded. Not only were patients and members of the public unaware about competitive bidding but, to my great surprise, doctors were just as often uneducated about not only the ramifications of bidding, but the bidding program itself. And I do not believe that this is isolated to our experience here at Grace Healthcare.

4. The HME industry is more fragmented, not less, than other industries. While competitive bidding is sure to chip away at the fragmentary nature of the industry, it is still likely to be a more competitive industry than, say, the multimedia or publishing industries. The novice should take a quick glance through his or her local yellow pages and take-in the sheer volume of HME suppliers servicing customers in his or her location. This little exercise can be eye opening. And, if you were in a Round 1 competitive bid area, look at the yellow pages from before and after contracts were awarded to get a quick understanding of the significant changes that competitive bidding has had and will continue to have. You are sure to see a significant drop in the number of HME businesses in your community. 

5. Despite what you think, brand positioning and brand awareness should be the role of your advertising department. After all, do you really expect a flood of new customers from running a new television spot on your company's selection of diabetic shoes and strips? The products we sell are not items that are purchased with disposable income. No, you want the customer to choose your business at the moment they need durable medical equipment. And to accomplish this you must distinguish yourselves from your competitors, and this is the task of branding. Of course, advertising can be a part of your total marketing strategy, but expect to channel the majority of your advertising dollars into branding your company. And don't make the mistake of assuming that you are already sufficiently branded! If Coca-Cola still believes in the need for branding their products, then maybe you should too.

Travis Conn is the communications manager at Grace Healthcare. Reach him at 228-248-4275 or tconn@gracehcms.com.