A Word on Competitive Bidding
Were you in the first round of competitive bidding?
We
were in the first round. Wright & Filippis bid a number of the CBAs
for mail-order diabetic supplies. And we did bid one of the CBAs near
to our service area in Michigan.
How does it look?
We were not a winner in any of the bids.
How will this affect you?
It
certainly puts a crimp in our plans to continue providing diabetic
supplies on a nationwide basis. We're presently the 13th largest
company in that arena in the country. But it does not yet affect us in
a real profound way. That could take place during round 2, when four of
the CBAs will be in our present service area for traditional home
medical equipment business.
How are you preparing for competitive bidding?
Efficiencies,
efficiencies, efficiencies. We really need to get lean with our
operations. We've been working with our supplier partners diligently to
obtain the best pricing that we can and coordinating with MED Group to
access that good pricing and to look at best business practices — but
most profoundly, looking at all of those day-to-day overhead
operational things that we do and looking for ways to squeeze
efficiencies out of those things. Shipping is just one example. We
recently moved our package business to UPS to obtain savings. We're
looking at everything now. We're looking at everything from our
contracts with the people we buy our boxes from, to our cleaning
services, to our alarm services, to our sleep management — just really
going after our cost structure in an aggressive manner.
It's
past theoretical at Wright & Filippis. We've done a number of
things to prepare for the eventuality that is the competitive
acquisition train wreck.
This article originally appeared in the Respiratory Management June 2008 issue of HME Business.