The Big Ten
- By David Kopf
- Jan 01, 2012
Cash sales continues to be a key element of our Big 10. There’s no doubt that it will continue to be a central dynamic in the evolution of the HME industry for this year and beyond. Providers started making forays into cash sales a few years ago, but developing a solid retail strategy and skill set has become an absolute must in 2012.
Too much has happened to Medicare funding 2011 for providers to consider it a singular source of revenue. From competitive bidding to audits, HMEs simply have too much to contend with when it comes to processing Medicare claims. While Medicare will —and should — continue to be providers primary funding source, it cannot be their only funding source. This is why retail is critical.
And providers that have led the retail charge have learned much about how to approach cash sales. If anything it has represented a complete change of mindset. Where “sales” used to be a dirty word for many providers, they are now learning that perhaps their notions of the sales process were a bit preconceived. Owners, management and staff alike are learning that sales is a collaborative process drive by the desire to serve patients — exactly the motives that drive any HME professional.
Now HME staff are learning to interact with their patients and learn more about their conditions so that they can offer a variety of funded and retail options to help them come up with the perfect solution to their needs. And in that regard, provider staff are becoming even more knowledgeable product expects than they already were. This helps in not only the individual transaction, but in cementing a long-term relationship with the patient and building the HME business’s reputation as a knowledgeable provider of entire HME solutions.
But staffing is only part of the overall retail picture. Providers are also engaging in solid marketing research to determine which patients they can reach, the products that will suit their needs, and the prices that will appeal. So providers are going out and mystery shopping competitors, meeting with referral partners, and surveying their patients to answer those questions.
And, providers are becoming savvy merchandisers. They are overhauling The Big 10 their businesses to offer engaging showrooms that attract patients to investigate what they have to offer. This includes attractive signage, displays, shelving fixtures and product package.
But that’s not the whole story. Providers have also had to implement savvy back office solutions to support their retail operations. For instance, smart providers have been leveraging their software systems to support their retail efforts by integrated point of sale cash register systems that are tied to the overall HME software system. This lets them update inventory as transactions are processed, implement special promotional pricing, and even add retail purchases to patient histories.
Additionally, providers are realizing that retail doesn’t necessarily mean inexpensive. Many providers are seeing patients purchase expensive DME such as scooters and portable oxygen concentrators, because they lack the funding for such items, but seem them as something that could benefit their lives and can afford them. And, if the patient can’t afford them, providers are now sourcing financing solutions from manufacturers and other sources of credit so that they can offer their own financing packages to retail customers.
Undoubtedly, providers have learned much about retailing DME and related items to their patients. But they still have room to grow — a lot of room. And that’s a good thing, given the state of Medicare funding. We will continue to witness providers’ retail evolution unfold throughout 2012.
This article originally appeared in the January 2012 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.