Finding the Business
While the bid gap is enticing, Blue Chip Medical's Ron Resnick points out a variety of non-Medicare DMEPOS business opportunities that enterprising HME providers can -- and should -- pursue.
- By David Kopf
- Dec 01, 2018
Ron Resnick is a man who knows how to work for the business. He’s spent a lifetime in specialized HME, and as president and owner of Blue Chip Medical Products, he has endeavored to help his provider customers develop and expand their businesses.
Even with the bid gap opening up, and providers revisiting supporting DMEPOS beneficiaries in categories or CBAs for which they didn’t get contracts, there are still many opportunities outside of that traditional revenue model that enterprising HME providers should explore.
I recently sat down with Resnick at the Oct. 15-17 Medtrade in Atlanta to discuss how HME businesses can drive new revenues in addition to traditional Medicare fee for service or retail sales, and he offered a range of suggestions. And in true Ron Resnick fashion, he was as engaging and entertaining as he was informative and thought-provoking.
Focus on Education & Providing Value
His first piece of advice is that if you have a retail game then you should start to refine it. Chances are you have a smart, educated staff and you should leverage that by looking for ways to get clients in the store and share that expertise.
“Maybe do seminars,” he says. “Some of the retailers don’t do enough to drive revenue in their store. Just because they’re on a busy street doesn’t necessarily mean that they’re going to get walk-in traffic.
“… Take, for example, a lot of these nursing facilities, some of the skilled nursing facilities, some of the step-down facilities, they all have recreation councilors or therapists,” he continues. “They all have vans, so they take them shopping. Why not set up in your store, invite some manufacturers and do one on diabetes, like food or candy, or shoes. Do a promotion, get a manufacturer to do bathroom safety. Talk about scooters.”
Even if those patients don’t buy much or anything on the day of the event, they will file away what they’ve learned and share it with their family. So, that lift chair that you do an in-store seminar about one week could get bought as a gift from a family member later on down the line.
And the education and service you provide can forge a customer relationship that lasts a lifetime.
“Everybody knows how to buy a car, everybody has bought clothes,” he says. “Healthcare is a little bit different, and sometimes a little scary. Say, when a new amputee needs a power wheelchair. … By offering that service or educating that patient or their family member, they might say, ‘I need to buy that because it will make my life easier for my husband, or my wife, or my son, or daughter.’”
Cultivate the Facilities-based Care Market
Resnick stresses that providers can greatly reinvigorate their revenues simply by getting out and doing some local marketing to develop facilities-based care clients.
“For example, many times the Veteran’s Administration is a really good area for business,” he suggests. “Through prosthetics, through traditional ... Some of the VAs may have contracts directly with the manufacturers for product, but the service needs to be maintained and the product needs to be delivered and set up, and they’re very generous on their fees.”
Can that sales cycle be long? Of course, Ron acknowledges, but adds that large clients take a while to develop, which shouldn’t frustrate anyone, because the rewards can be considerable. Also, he adds that providers must learn to continue asking for the business from prospects that might not have seemed very fertile in previous meetings. This is especially true of public-sector clients such as the VA, he adds.
“The word no doesn’t mean no,” he says. “It means to come back and try again, because you never know when another provider either has not done a good job servicing a particular facility, or whatever. It just makes sense to keep doing it. The government is not going away.”
In addition to the longer sales cycles are longer payment cycles that come with working with large clients, Resnick says. Providers exploring those markets need to incorporate that into their business models.
“A lot of traditional home care providers are always afraid to sell to nursing facilities and long-term care, because they say, ‘we don’t get paid,’” he observes. “That’s not true. There are a lot of businesses that are slow to pay bills.”
And if providers do their due diligence on those facilities, ensure that they fulfill their obligations, and can create a business model that fits their payment cycle, those clients might also become referral sources for additional business.
“Some of the patients that are in a long-term care or the queue to rehab are there for a week, two weeks, three weeks,” he explains. “Well, the equipment that they’re getting there, they will also need to go home with that. If you have a relationship in that facility with the physical therapist, occupational therapist, or case manager, social worker, they’ll be more inclined to refer that patient to you. Especially in a local environment.”
Resnick also recommends that providers look at servicing equipment as an additional revenue source.
“From our perspective, after the 13 months on a rental for a mattress, we get a call: ‘Can you help me? The dealer that originally provided the mattress doesn’t do it anymore. Can you recommend a somebody else who can come and do the service?’” he explains. “Some dealers say, ‘We don’t have a mechanism for it.’ Well, why not? Some of the parts are modular, and with proper training or certification you can go out and service a patient.
“You’re local to them, and it’s peace of mind,” he says. “Again, that can be notifying some of the case managers, and insurance carriers that, ‘Hey, while we may not have delivered the initial piece of equipment, we can serve you in your geographical area.’ That is cash business.”
This article originally appeared in the November/December 2018 issue of HME Business.
David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.