The e-Commerce Equation
Leveraging the web in a patient-centered way.
- By David Kopf
- Nov 01, 2009
Notechnological innovation has impacted everyday life worldwide over the past 15 years more than the Internet. It is now a primary platform for how we learn, communicate, entertain ourselves and do business. However, its presence in the HME industry has been somewhat limited.
On the face of things, the fact that home medical equipment providers are not more deeply in touch with their clients, many of them homebound, seems counter-intuitive. Pair that with the Internet’s sheer ubiquity in all walks of daily life and business and the minimal use of the Internet and electronic commerce to do business seems, well, significantly out of step with the explosive growth of the Internet.
Technology Time Tunnel
The Internet was a long time coming in making its way to its relatively recent global adoption. First initiated as a project of the Department of Defense’s Defense Advance Research Projects Agency (DARPA) in 1968, the Internet leveraged brand new packet data networking technologies in the hopes of creating a network that could survive an all-out nuclear war. Its first two network nodes were connected in 1969 and from that point forward, work began to expand and perfect the network.
After the National Science Foundation Launched the Internet’s NSFNet in 1985, and began carrying commercial email traffic from providers such as MCI Mail, Compuserve and UUNet in 1988, the Internet continued to grow, but was largely the domain of academia, researchers and government systems. It did not become a household name until 1991, when the world wide web project began.
Not soon after the web’s debut, the Internet became a household name as consumer access to the Internet became available from Internet service providers and online service providers via dial-up modem service, starting in the mid 1990s. At that point, Internet traffic was growing by at least 100 percent a year. As mid-bandwidth access services such as DSL and cable modem service became available, that growth exploded.
Fast forward to the beginning of this year, and microprocessor manufacturer Advance Micro Devices, whose technology is used in a variety of network equipment, put the global population of Internet users at 1.9 billion. The U.S. Census Bureau estimated the global population was 6.7 billion people. That’s 28 percent of the world using the Internet. Not bad market penetration.
And that massive population has been using the Internet to buy. Starting in 1994, when Netscape released its secure Navigator browser, Pizza Hut began taking delivery orders via the web. In 1995, Amazon.com made its global debut. From that point forward, e-commerce became a facet of everyday life, even during and after the dot-com bust. At last count, Forrester Research had put 2008’s e-commerce activity at approximately $204 billion.
Points to Take Away
- Electronic commerce is a regular part of daily life in the United States, and much of the developed world, but it has yet to take hold in the HME industry.
- HME providers are reticent to leverage e-commerce over concerns that it might cramp their focus on running a patient-centered care basis.
- Moreover, unscrupulous online dealers have made HME providers gun shy when it comes to pulling the e-commerce trigger.
- However, e-commerce can be an key way to serve patients, and a well-developed website is almost a “must” for doing business and establishing credibility these days.
- Key product categories that work for HME are cash sales items, as well as refill items such as CPAP replacement parts and diabetic supplies.
- The web can also be used to better interoperate with referral partners.
- There are providers of turnkey e-commerce systems that specialize in the HME industry.
People click. People buy. But rarely do people click and buy HME. Why has the HME industry not tapped into what is, at least in the United States, a means of communications and commerce that has reached a point of commonality on par with the telephone and credit card? The answer is not simple.
One of the big holdups to e-commerce gaining any significant traction among traditional HME businesses has been because of its use by unscrupulous firms. We all know the scenario: an online outfit convinces Medicare recipients to make a claim for inappropriate DME that is then drop shipped to the client. No in-person assessment, set up, or instruction has been provided, and the client is left stranded.
Often times, traditional HMEs have had to pick up the pieces. It’s no wonder that many traditional HME providers have resultantly become more than a little gun-shy about using the web to stage actual HME transactions.
“It has been a metamorphosis,” says Bill Sturgeon, owner of Charleston, West Va.-based HME provider All Med LLC, who has been in the HME business for longer than 28 years. “The DME business has been cheapened [by unscrupulous online businesses], and it’s a constant battle to portray to our clinical referrals that we are using it as a medium, and not a means to an end.
“Get started; don’t wait. It’s not that expensive for the exposure and for the positives that come out of it.”
— Bill Sturgeon, owner, All Med LLC.
“There’s lots of things we can do,” he continues. “But you can’t drop ship a power chair across the United States and pay someone who works locally on transmission and go out set a patient up, and then nobody goes back again. You can’t do CPAPs over the Internet and send a DVD. Those people have hurt our business.”
That said, All Med was an early adopter of the web, Sturgeon says. The provider focuses on respiratory, sleep and mobility services, and supports approximately 8,000 active patients via its main Charleston location, as well as four other locations in Huntington, Logan, Beckley and Bridgeport, West Va.
“We first started off with a web site for brand awareness,” he says. “Even though we are in larger cities, it’s still fairly rural and people.”
So, All Med first began using the web to help patients to learn more about its business. Its printed marketing materials referred to the provider’s URL so that clients could learn more. This helped All Med share more substantive information on its various locations, staff and its HME services, Sturgeon says.
“We have made it considerably more interactive for information about products, and how they fit into [patient’s] daily routine. So there’s more of an education component.”
And over time, the site “has worked into an interactive opportunity for people to make purchases,” Sturgeon says.
What Works for HME e-Commerce
As for who is using the web to make transactions, one demographic Sturgeon has seen readily adopt the web to handle HME purchases has been the Baby Boomer-aged children of older parents that need DME. “It sparks a lot of questions; things, more for mom and dad,” Sturgeon says. “Things they weren’t aware of.”
Hands down, the HME product categories that really lend themselves to e-commerce are the cash sales items, Sturgeon says. Cash sales products don’t require the complex claims process that muddies what is supposed to be a quick and easy transaction, and they don’t require heavy documentation, or detailed assessment or fitting that other HME can require. So those are the types of products All Med focuses on in its online shop.
“It has worked well, and we’ve actually opened three retail stores in the time that we’ve had the web site. They kind of work off each other, even though we’re talking about two different audiences.”
As for HME categories, some product groups that have seen good e-commerce uptake via All Med’s site have been disposable products for sleep and orthotics, Sturgeon notes, adding that All Med has just hired a new orthotics fitter as a result of the increase. Other inquiries include bariatrics.
“We have lots of information there,” Sturgeon says. “I think a lot of providers steer clear of a lot of [bariatric products]. Bariatric trapeze bars are very expensive, a lot of folks make those cash pay and a lot of insurances are starting to recognize them. So we’ve gotten some business in the bariatric category.”
Another product category that lends itself to online transactions is diabetic supplies, says Andris Vaskis, chief technical officer of Oxford Diabetic Supplies Inc., a New York, N.Y.-based provider of diabetic supplies that has leveraged e-commerce to serve its clients.
“Today you can do everything online,” Vaskis says. “Calling somebody is a thing of the past. You just want to log in and get your supplies.”
To answer that need, Oxford Diabetic has set up a web site that lets patients check to see if they would qualify to receive supplies online. After filling out some online forms, their eligibility is processed in much the same way as a credit card, and after a confirmation call, they can receive their supplies.
“From a user standpoint, it’s really an easy thing,” Vaskis say. “That simplifies everything for us, as well.”
The simplicity doesn’t just come from gaining internal efficiencies when it comes to order processing, but also in terms of marketing. By leveraging Google ads and other online advertising and marketing tools, Oxford Diabetic can better reach its clients.
And of course, the web is also an idea means to communicate with patients. “We get a lot questions, sometimes more than sales on some days,” Sturgeon says. “And we have a person who answers them.”
All Med is also using the Web site to drive patients that need more hands-on assessment, evaluation, fitting, etc. into its physical business locations, as well. This can result in some unique service offerings, too.
“We have a homes safety assessment service that we offer,” Sturgeon says. “We have had people contact us through the web site and the first thing we do is call their physician and we have found things that are very important.” The web also can be used to serve patients that are out of All Med’s sphere of influence. Sturgeon says he has helped patients many states away that make online inquiries with his business by referring them to other providers that are local to them. This could spark future referral relationships.
Moreover, the Web has also helped All Med better interface with its current referral partners by providing information on CEU programs All Med offers for its referrals. This includes some online courses that are tied to some courses that are offered via VGM University (All Med is a VGM member company).
Likewise, Oxford Diabetic uses its site to interface with physicians. Doctors can log into the site, submit questions regarding their current patients, and refer new patients to the provider, Vaskis says.
The first step is to research the companies that can help your business make its first foray into e-commerce, according to Sturgeon. Finding a partner that can help you get there is a much more workable arrangement than trying to re-invent the e-commerce wheel.
In All Med’s case, the provider went with a firm called 50 Below, which specializes in helping a number of smaller, more traditional retail industries such as tax preparation, motorcycle dealerships, tire and automotive accessory stores, pool and spa shops, and HME providers set up online storefronts. “Get somebody who knows our industry, and then it’s not going to be so difficult to portray what you’re trying to portray,” Sturgeon says. “They’re going to put a spin on your business that is going to be enticing to the [patient] community that is looking for product.
“Get started; don’t wait,” he adds. “It’s not that expensive for the exposure and for the positives that come out of it. Get started with someone who knows DME and do it now.”
50 Below maintains a regularly updated database of HME products that providers can add to their web site product information or online shopping offerings, simply by drilling down and checking off items.
The way 50 Below got started in the HME industry was through a side trip to Invacare on the way to one of its charter clients, Goodyear Tire and Rubber, in 1997, says Mike Rollo, executive vice president of 50 Below. In 1999, 50 Below created a dealer locator tool for Invacare. This evolved into an Invacare branded web site program that 50 Below offered to Invacare providers.
Those web sites prompted Providers to ask 50 Below to add their other, non-Invacare offerings to their sites, Rollo explains. This in turn touched off 50 Below’s market specialization in HME. Eventually Invacare took on their own dealer locator service, as 50 Below moved toward specializing in multibrand sites for providers.
“Calling somebody is a thing of the past. You just want to log in and get your supplies.”
— Andris Vaskis, chief technical officer,
Oxford Diabetic Supplies Inc.
“Your web site, much like your physical location, is a destination,” Rollo says. “It has to mirror your business. If it doesn’t, you might be doing yourself a disservice.”
Rollo suggests that providers approach e-commerce in a measured fashion and get the word out. “You start small,” he says. “You don’t try to become Amazon.com overnight. What you need to do is with your launch of anything online, especially anything with a transaction-based system, is to get your information out to your existing customers, and tell them that you’re now online and some of the things that they come in for, they can now buy online. That’s your first step.”
It’s better to start with a limited line up of offerings, but one that you can support in a responsive, competent way, in order to ensure you meet client expectations, Rollo advises, lest you inflate expectations. “Start small and stay competent,” he says. “Your customers already think you’re competent, otherwise they wouldn’t be coming to buy from you. … it has to be good, it has to be professional, it has to be accurate.”
“Your web site, much like your physical location, is a destination. It has to mirror your business.”
— Mike Rollo, executive vice president, 50 Below.
To that end, 50 Below incorporates a deep level of the HME industry’s product data into its service. When a provider establishes a site via 50 Below, it is tapping into a database of HME product data that it can serve up to patients for information purposes or for e-commerce purposes. The provider doesn’t have to do that research; it’s already been done, Rollo explains.
This includes providing pricing options so that each product on a provider’s site has the option of running with a price, or with a button clients can click to request more information. This is helpful, especially when running products from vendors that do not want their pricing listed.
Detailed information is critical because the more information a provider can supply to patients, the more likely those patients will want that HME as they learn more about it. Information equals sales; even if those sales occur in the store, rather than on the web.
“There’s research out there that shows that as much as 80 percent of your in-store sales are influenced by an online shopping experience,” 50 Below’s Rollo says. “Before a client came in and bough this ‘XYZ’ from you, they probably already researched it online, 80 percent of the time.”
From a technological standpoint, 50 Below’s system works somewhat like a content management system with the provider’s site hosted on 50 Below’s servers. There is a basic framework to the 50 Below sites that can then customized to provider’s specifications. This holds true for creating the product information sections and online stores, as well. Providers select the products they want to list on their sites from 50 Below’s database, and decide which information and pictures they want to display for those products.
The sites also include the e-commerce “checkout” functionality so that patients can purchase DME. The transaction is handled via 50 Below, and the money goes back to the provider. The provider is alerted to the order via email notifications, as well as a “command center” web page that lets the provider see all transactions. The provider can then collect all the patient and order information, follow up with the patient, confirm the order (if necessary) and then fulfill and ship it, Rollo explains.
A “command center” on the 50 Below system lets providers view incoming orders so that they can confirm with patients and then fulfill and ship the orders.
As for integrating the transactions with provider’s current HME software system, that has not yet occurred yet in 50 Below’s system. For instance, All Med’s HME system from Computer Applications Unlimited, is not linked to its 50 Below site. The orders and transactions it receives must be re-keyed into its HME billing and management software system. However that integration is something 50 Below could easily could do, Rollo says.
“There are a ton of ways to integrate all that and make it seamless to the end user and the provider,” he says. “But that integration hasn’t really occurred yet for us in this industry. We’ve done it in other industries, such as the power sports industry, for motorcycle apparel and that sort of thing, but in the HME/DME world, we haven’t done that. We’re not opposed to doing that, but the demand hasn’t been there yet.”
In Oxford Diabetic’s case, as soon as a patient signs up online, the online system connects with the provider’s HME software system, in this case Noble Direct, to look up and cross-reference the physician information, and a fax server faxes the order to the doctor. When the physician sends the order back, it is put into Oxford Diabetic’s HME system so that its status can be updated, Oxford Diabetic’s Vaskis explains. This leads to additional automation and efficiency.
“We have 40,000 existing, active patients, and we have 30,000 doctors in our database, so you know there’s already 10,000 patients that already share an existing doctor,” Vaskis explains. “Through the web site, we’re able to do 5,000 — if not more — weekly mailings to the doctors to get the paperwork back.
“For a person to keep track of all the paperwork, it becomes very labor intensive,” he continues, “but a computer knows and can keep track of every single piece of paperwork you have not received to date.”
On the patient side, clients can also check on the status of their orders to see whether there’s an issue with it, or if it is being prepared, or if it has been shipped and their has been a tracking number assigned to it, Vaskis says. Adding order tracking for patients is a functionality that is now being added to the Oxford Diabetic system. “If I order anything online, I want to know where it is and whether it’s going to be on time,” he says. “If I don’t have it, I want to know it’s at least on a truck to be delivered.”
Bill Sturgeon, owner of Charleston, West Va. HME provider All Med LLC (right) and business partner Mark Saber (left) have leveraged e-commerce to sell a variety of cash sales items via their site, including sleep and orthotics refills, as well as some bariatric and bath safety products.
In addition to the technology integration, the other elements of an HME business must support e-commerce and the web, as well, and service is key.
“One specific lady and myself, pretty much run everything [related to the web],” Sturgeon says. “She is a 12-year veteran of the business and she has a great understanding of all aspects of [HME]. She’s our compliance manager; she’s our billing manager; she knows a lot about DME. You can’t just have a traditional customer service person pick up emails and handle things. It’s a whole different ballgame.”
So a provider must delineate at least one senior staff member that has a solid understanding of the business and demonstrates a knack for fielding a wide variety of incoming questions, Sturgeon says. “You need an allstar, and someone with a little salesmanship, besides product understanding and billing substance,” he says.
But, as the saying goes, a journey of 1,000 miles begins with the first step, and many HMEs have yet to land that first footfall into e-commerce due to trepidations over maintaining their patient focus.
A Much-Needed Attitude Adjustment
That’s because typical traditional HME providers have a good moral compass; they want to do the right thing. However, that reticence to leverage e-commerce could work against them. For all of HMEs’ desires to maintain their credibility as patient-focused care professionals, they might actually be undermining their reputation by not providing web sites that better serve their clients.
While HME might be struggling with how to use the web, and especially e-commerce, one fact remains: maintaining a solid web site, including an e-commerce mechanism if you operate a retail business, is a prerequisite to doing most business these days. Businesses have been leveraging it for 15 years now, and in 2010, everyone from booksellers to bankers are routinely selling online. Its as endemic to the process as ordering office supplies.
“I don’t know how people have done it,” Sturgeon says. “I don’t know how a company would get any credibility without having a decent web site.”
Sturgeon says that one of the keys to All Med’s success has been that its brick-and-mortar businesses have been tied to its online “face.” That face has helped clients better understand and trust his business, even before they have set foot in one of All Med’s physical locations.
“I think that’s why [the web] works for us,” he says. “It has lent credibility to all of our relationships. We just opened a store, and it is already well beyond projections, and I think the web gave it a lot of credibility. Going in, the very first thing we talked about the fact that we were accredited and ‘look at our web site.’ Those two things have helped us. We are doing as well in that store as stores that have been open for five years.
“I think there is a comfort level [with patients],” Sturgeon continues. “Those people feel like they already know us because our web site is very in-depth, and if you tie that with a ground attack of quality staff, it has helped our business. It’s definitely given us substance.”
This article originally appeared in the November 2009 issue of HME Business.