Consider Consumer Financing

Consumer financing might resurface in HME cash sales.

One aspect to retail sales that might finally catch on the HME marketplace when it comes to cash sales is credit. While it is a familiar aspect to other retail marketplaces, consumer financing is not a common feature in the HME industry.

That said, consumer financing represents an ideal means to help providers to grow retail sales, says Cy Corgan, national sales director for retail mobility products for Pride Mobility, which recently entered a relationship with U.S. Credit to offer consumer financing to HME customers. Pride piloted this program in the state of Florida for four to five months, and decided to roll it out nationally at Medtrade.

“Financing is often the way you can differentiate retail product,” he says. “Often consumers come in and ask ‘What’s the difference between this vehicle lift and this vehicle lift?’ and the answer can be ‘This one has consumer financing attached to it,’ which can be the trigger mechanism for them to say, ‘Okay, I’ll go with it.’”

There have been attempts by consumer financing companies, such as GE Capital, to enter the HME market, but they haven’t work. Corgan chalks that up to lack of familiarity with the territory.

“This marketplace has been difficult in comparison to the standard retail marketplaces, such as furniture are automotive sales, where consumer financing is relatively prevalent, because the individuals that are being offered the financing often don’t qualify,” Corgan says. “GE Capital and a number of others have tried to enter the market, but they don’t have an understanding of the HME/DME market and the individuals they might be financing.

“Often times [patients] might be on medical assistance or they might not have three or four different credit cards,” he continues.” It’s easy to give credit to someone who already has good credit or additional credit cards.”

The key in the HME industry, since good customer credit is not as prevalent, is a more hands-on approach. U.S. Credit will sit down with the patient to learn more about their finances and lifestyle and how long they’ve been in their dwelling to better determine the actual credit risk.

“U.S. Credit is working closely with providers and consumers to work through the payment scenarios on a one-on-one basis, versus ‘Do you have a FICO score in the 700s?’ when some of them might have credit in the 500s,” Corgan explains.

This article originally appeared in the April 2009 issue of HME Business.

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

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