Respiratory Solutions

Business Strategies for a Rocky Industry

Check out these 20 business strategies to protect the profitability of HME businesses.

• By Dick Fields
• Mar 01, 2010

How challenging is it to be in the home care industry? The landscape is shakier than a 7.0 on the Richter scale. In fact, we don’t know what “normal” is anymore. It’s true. Ask a respiratory therapist or HME provider to describe “normal” circumstances and you won’t get much more than an eye roll and a shoulder shrug. We’re not being uncommunicative. We’re just preserving all of our energy for staying balanced on our heels.

A quick review of the state of the HME sector plainly reveals our challenges. The current landscape of our industry might be described as a “marionette” environment in which providers are compelled to develop a style that best suits their region and, more importantly, their valuable referral base. Contributors to this environment include competitive bidding, Medicare requirements, a pending national healthcare plan overhaul, managed care contract changes, complex relationships with medical practices and sleep disorder centers, staff challenges, and the prevailing need to control expenses and try to make a profit.

When I look at our increasingly demanding environment, I am reminded of an episode of the TV series Seinfeld that involved a very popular soup restaurant. Everyone who wanted this coveted soup had to present themselves in a specific manner; they could not ask questions or make eye contact, and they had to move quickly aside after receiving their soup. I foresee a time in the near future when our industry may need to adopt this robotically compliant behavior, simply because there will be only a few providers (aside from the nationals) who will able to stay in business and make a profit.

Meanwhile, the “bubble” of health care as we know it is bound to burst if HME providers continue to be beaten into submission by payers. Medicare’s solution? Thin the herd.

Despite this talk of doom and gloom, I do think that there are certain approaches and measures we can take to help protect the profitability of our HME businesses. The following business strategies don’t guarantee success, but for those of us who are teetering, they might help to put us on an even keel.

1. Hire ethical staff.
This is essential as you focus on providing consistently outstanding customer service.

2. Be known for something great.
Develop a “customer satisfier” that you consistently provide.

3. Develop a patient follow-up program.
Make sure that all new patients are surveyed for feedback and service-related perceptions.

4. Nurture communication between Sales and Operations.
Operations and customer service must support sales and not “under serve” the sales efforts. “No” should never come up in a conversation with a customer.

5. Maintain your website.
It should be user-friendly, informative and allow for e-commerce on some supply items.

6. Develop a respiratory CPAP resupply process.

7. Establish an equipment repair department.
This can be used for “bent metal” on oxygen and PAP devices.

8. Issue used PAP equipment for new Medicare patients.
Once compliance is achieved, you can replace it with new equipment, as applicable.

9. Purchase an ozone machine.
Create a chamber (big box) to allow “smoker”-returned equipment to be exposed to the ozone for several days. This will remove the cigarette smoke smell from the unit and allow it to be reused.

10. Purchase a pasteurizer unit.
This will allow you to recycle multiple usage RT CPAP supplies for indigent care, private pay or CPAP clinics.

11. Be known as a company that will sell used equipment and new supplies to private pay customers.

12. Utilize brand marketing.
Design all of your marketing materials and peripherals to drive the branding of your business.

13. Use a consultant for direction on Medicare billing and compliance.

14. Become involved with your local respiratory college.
Allow your business to become a clinical rotation and/or provide used equipment and/or presentations to RT students.

15. Provide rewards and recognition for your staff.
It can be something simple, like bringing in lunch after certain goals are met.

16. Organize and provide CEU programs.
Doing this for your staff and medical community will establish your business as a leader in your community.

17. Maintain relationships with other local respiratory HME providers.
Assist other providers when you can. If they know, like and trust your business, they will refer patients to it.

18. Build a “no-waste” culture.
Make it clear to staff that your business does not waste money, time or resources.

19. Remember that “nice” matters.

20. Remain the “lead dog” of your business.
If you are not, then the scenery never changes.

This article originally appeared in the Respiratory & Sleep Management March 2010 issue of HME Business.