MEDTRADE; ATLANTA, GA. — There are fewer HME providers than a decade ago, but the providers that are in it for the long haul can thrive if they properly align their business strategies with industry trends — this was the upshot of today’s Brightree User Summit keynote address by the post-acute software company’s President and CEO, Dave Cormack.
Thanks to pressures such as competitive bidding and audits, the HME industry has gone from 10,000 providers to roughly 5,000 providers, Cormack said at the outset. However, the Brightree leader noted that the situation isn’t necessarily as dire as providers might initially think.
“The message I want to give to you today is … the cup is half full,” he said. “There’s a lot of optimism around the marketplace.”
Cormack highlighted the fact that outcomes-oriented, performance-based healthcare is a reality driven by the fact that 18 percent of GDP is spent on health and unchecked that could go as high as 35 percent. As a result, providers must leverage IT automation, revenue generation and interoperability to cut costs and bring more money to the bottom line in order to survive reimbursement pressures
“There’s more regulation than ever before,” he said. “Even the states are coming up with separate regulations.”
The industry finds itself at the outset of a 10-year change of moving from a fee-for-service model to an outcomes-oriented care model, the Brightree leader explained. Also, right now, HMEs and other providers in the post-acute healthcare space are working in silos, but will soon find themselves needing to work in a more collaborative fashion in order to drive outcomes-oriented care.
“What we’re working toward is an ecosystem where disparate systems are going to connect with each other,” he said. “…My view is that in three or four years, if you can’t share data, that you can’t electronically take referrals and send out paperwork and get it back, you’re not going to be in business. Today, 2 percent of referrals come in electronically. It’s going to be 100 percent in three to four years’ time.”
Cormack said IT interoperability will revolutionize healthcare services in much the way interoperability did for the financial services industry in the 1980s and the automotive and retail industries in the 1990s.
There were other reasons for providers to feel the cup was half-full, according to Cormack. A Brightree survey of its users showed that those providers expected their income to increase in 2016, and 60 percent of them felt their profitability would be the same or higher.
Additionally, there was more private equity entering the industry because it sees business opportunities, despite the shake-up in the number of providers. Currently, the HME segment of post-acute care represents a $44 billion marketplace, and will grow to $70 billion in eight to nine years. In short, that will mean roughly double the revenue for roughly half the providers.
“So for those that get it right in terms of efficiency and the right platforms and initiatives, there’s a tremendous opportunity,” he said.
Special Note of Memorial
Cormack also took a moment during his keynote to honor VGM Group Inc. founder and CEO Van Miller, who passed away Oct. 18.
“We lost an industry icon in Van Miller last week,” he said, describing the VGM founder as an “amazing leader from my perspective, a philanthropist and a giver. … We’re all VGM associates, I’d like to say, as we celebrate his life.”