'Fleet management is the way to go'

Invacare is placing its bets on HME providers that use fleet management principles to survive and thrive under competitive bidding.

“As the environment is restructured, what is the most optimal business model for providers?” asked Brian LeDuke, vice president of enterprise marketing, North America, during Invacare Media Day on Aug. 7. “Fleet management is the way to go.”

Invacare officials used Southwest Airlines as an example of how providers can become “breakout performers” by standardizing everything from the equipment they buy (for Southwest, Boeing 737s) to their turnaround times (for Southwest, 25 minutes).

Put simply, fleet management is all about “simplifying and optimizing your business,” says Joe Lewarski, vice president of clinical affairs.

“If I had a paint gun, I'd run out of paint balls shooting at all of the inefficiencies (that I see in the businesses of most providers),” he said.

Up and coming

Transitioning to a non-delivery model for home oxygen therapy is one way that providers can simplify and optimize their businesses, Lewarski says.

Data shows that more and more providers, amidst competitive bidding and punishing audits, are turning to portable oxygen concentrator (POC) and transfilling technology. In Round 1 areas, while overall utilization for oxygen products decreased, utilization for POCs and transfilling systems increased 76.8%, he said.

“We're going to see exponential growth for K0738,” he said.

Practice what you preach

While a consent decree with the U.S. Food and Drug Administration has slowed down efforts, Invacare officials say they, too, have on their mind simplifying and optimizing their business.

A project kicked off in 2011 that will streamline Invacare's products and reduce complexity on a global basis is expected to save the company $100 million annually starting in 2016, says Gerry Blouch, president and CEO.

“Would it have been better without the interruption—yes,” he said. “(The decree) is a temporary delay, but complimentary, (because it, too, will result in better customer satisfaction and better profitability).”

Not so wild cards

Arguably no one has spent more money trying to fight competitive bidding than Mal Mixon, chairman of the board of Invacare. While he continues to fight for fixes to the program, he says it's probably here to stay in one form or another and it's time to move on.

The question is: “How do we do it, not how do we not do it?” he said.

As for the consent decree that has handcuffed Invacare in several ways, including preventing it from releasing new products: “When we come out of this thing, we're coming out like a caged animal,” Mixon said.