Hometown Medical beats the blues

SAN JOSE, Calif. - While some providers say the competitive bidding program has hurt their ability to provide quality patient service, Ryan Sampson, operations manager at Hometown Medical Supplies, says he's had the opposite experience.

“A lot of companies are concerned about the reimbursement cuts and the level of service they're able to provide to patients,” he said. “We're actually seeing the inverse of that, in that we're able to have a closer relationship with the facilities that we work with since there are fewer providers in the marketplace.” 

Hometown Medical accepted 105 Round 2 re-compete contracts for mobility, enteral nutrition and general DME, and has about 20 subcontractors. It also offers complex rehab and orthotics.

Sampson credits a large part of the company's success to Medline, which manufactures and distributes more than 125,000 products nationwide to customers' doorsteps, hospitals and long term care
facilities. 

“With their flat rate $9.95 shipping, it's almost a cost benefit to use them, rather than delivering ourselves, when you calculate vehicle expenses and labor costs,” he said.

This is one reason that, while reimbursement rates have decreased, Hometown Medical's profit margins have stayed relatively stable from the previous round. 

In addition, Hometown Medical streamlined its operations by offshoring all data entry positions to India. 

“Our lowest hourly employees (in the U.S.) make $16 an hour and when you convert that to $6 an hour for data entry in Mumbai, that's a huge cost savings,” said Sampson. “When you're processing a walker with a margin of $10, you can't pay someone $8 for a half hour of processing and still have room to make it work.”

In five years, Sampson says he'd like to see the company offer products in all DME categories. 

“We don't currently offer emergency supplies such as oxygen, but I'd like to get to the point where we have those services included in our artillery, as well,” he said. “Again, that comes down to whether you get the contracts to do it.”