Selling direct and reality checks

I really want to write about some news in this blog, but I don't want to blow the cover on two stories that will appear in the HME Newswire on Dec. 24 and Dec. 31. So I shall not name names, though some of you will surely know whom I'm writing about.

The genesis for these stories was an email about a manufacturer selling its products through a mass retailer as part of a pilot project.

Naturally, I called the manufacturer and I called the mass retailer, and I talked to execs from both. Quotes from those interviews will appear in my story in the Newswire on Dec. 24. I also spoke with half a dozen providers to get their reaction to the news. Quotes from them will appear in my story in the Newswire on Dec. 31.

I'm not here to make judgments on a manufacturer's market plan. I'm here to give providers a reality check, which I think is more important.

A few providers I talked to reacted to this news by raising the “direct-to-consumer” red flag. But a manufacturer selling its products through a mass retailer is not “direct to consumer,” especially if said mass retailer has a retail pharmacy and a license to provide DME.

Ever since a large company that's very much direct-to-consumer bought this manufacturer, HME providers have been waiting for the manufacturer to go in this direction. But this latest move ain't it.

It is, however, another competitor for providers—one with a bigger presence and bigger pockets. That's unfortunate for providers, but hardly surprising. After all, HME providers aren't the only ones hoping to serve a growing population of people with chronic conditions.

It is also a development that was hinted at some time ago. A PowerPoint presentation from the manufacturer from 2008 included a slide detailing its plans to “transform traditional channel to mass market by 2015.” Company officials downplayed the slide at the time, but here we are, just a few years before 2015, and the manufacturer appears to be testing the waters with a mass retailer.

So what's an HME provider to do?

I'm reminded of a presentation by Mindy Thompson-Banko at this year's HME News Business Summit. Thompson-Banko is the founder and president of Simply Retail, which helps large hospitals enter the healthcare retail market, a market she sizes at $500 billion a year. She told attendees that even though mass retailers are likely to enter this market, smart providers have the upper hand.

“Someone in traditional retail is going to become a player—Bed Bath & Beyond is slowly trickling into this market,” she said. “But they're so removed. They don't have the expertise.”

Who has the expertise? HME providers do—that's who. And I think it's high time they start acting like it.