HME Retail: 2023
What's your five-year plan when comes to your retail revenue?
- By Wayne Slavitt
- Jun 01, 2018
I am not a professional prognosticator, but, given the accuracy of weathercasters and sports bookies, I feel I am as qualified as anyone to advance the calendar five years to see what the HME market might look like in 2023. And, if only half of my predictions work out, look for me on your local TV news with tomorrow’s weather forecast.
The most critical areas facing the HME industry, in my opinion, are:
- Medicare/Medicaid (Medi/Medi)
- The Retail Market
- The Manufacturing Pipeline
As the owner of a high-end HME retail brick-and-mortar store, I just don’t understand why so much time is currently (in 2018) spent on Medi/Medi. Article after article appears in trade publications, such as this one, discussing how reimbursement rates continue to worsen, but that we have to be hopeful things will get better soon. Ha! I can only imagine how Henry Ford felt in the midst of all those cutting edge horse and buggy manufacturers.
When I opened my first store one month after Competitive Bidding went into effect, I thought the market would move on and forget about insurance. Was I wrong! Sure, there are hundreds fewer HME retail stores than there were five years ago, but there still are a lot of stores hanging onto the thin thread of Medi/Medi, squeezing out paper thin margins, hoping to make it up on volume. Eventually, the cash runs out, and it’s time to turn off the lights—for good. The smart retailers have moved on, having converted to an all-cash model and are enjoying a smaller payroll without those billers.
In five years, I predict the Medi/Medi landscape will be better defined. Even fewer retailers will be part of the program, forcing the government to address the lack of access for seniors and other groups. I have always believed that Medicare should be a voucher system. Instead of dictating which equipment a senior should receive, which has led to billions of dollars of unused equipment sitting in garages and spare bedrooms, why not issue vouchers for a dollar amount to be used on HME equipment? That voucher—say $200 for a wheelchair—can be taken to an HME store to be applied to the purchase of a wheelchair the customer really wants and needs. If the customer wants the basic $200 wheelchair, he uses the voucher and gets the chair for free. (Let’s not worry about sales tax for now.) But, if he wants a lighter weight model or one with more features, he has a $200 start. The current system provides wheelchairs and other equipment that have such a low satisfaction level. Allowing the free market economy to be part of the Medi/Medi program will undoubtedly ensure that participants have a choice. Will this happen in five years? Probably not, but it should.
The Retail Market
By 2023, the retail market for HME products will have expanded much further. The Internet will account for a more significant share than in 2018, but mostly from commodity items, such as incontinence, compression and some mobility items. I remain a big believer in brick-and-mortar, and predict an expansion in this sector, especially with more Baby Boomers in the HME market. Everything we know about the Boomers tells us that they want instant gratification, style, quality, and high touch service. Couple this with their lack of HME experience and the need for high-end retail becomes apparent.
We already see this at Mobül, where customers lean heavily on our product knowledge, depth of inventory, and superb customer service. For example, the ability to try out many lift chairs, decide on the right one, buy it, and be sitting in it in under an hour provides unbelievable customer satisfaction. And, if there are any post-sale issues, the customer isn’t forced to call some 800 number with a call center in some foreign country, but instead calls our store and talks to someone knowledgeable and caring. Even Amazon can’t do that!
I hope that by 2023, the industry will abandon the “caretailing” moniker, which is just a ruse for Retail 101. Building a store in a great location, with lots of lighting, attractive displays, and great products, along with a well-trained caring staff is what great retail is all about with any products, including HME. Having to package this up with some hybridized name is insulting and unnecessary. Let’s all commit to building stores that provide our customers with the very best we have to offer.
The Manufacturing Pipeline
Over the next five years, I expect to see two significant changes in the product offerings for HME items. I am hopeful existing manufacturers recognize that the changing landscape with Baby Boomers and reduced impact from Medi/Medi will increase the demand for quality and an increased variety of HME merchandise. Successful vendors will recognize that consumers will not want to buy the same products their parents used and will, therefore, seek out items that look nice, work well, and don’t seem institutional. I believe we will see more leather and less vinyl, less bland and more fashion-forward colors, and more streamlined design and less oversized styles.
But it doesn’t stop there. Over the next five years, new entrants to the market will disrupt the current balance, with the introduction of products that have better features, weigh less, and look nicer. Recognizing the growth of the HME market, new startups will challenge today’s market leaders who today seem comfortable producing the “same old, same old,” refusing to react to a changing demographic seeking out profound change. We are already starting to see some of these innovative newbies, but stay tuned for even more.
If you realize just how much your life has changed over the past five years from technology, it’s easy to see that technology will play a greater role in the HME market over the next five years. We have already seen products such as TENS machines enter the consumer market, for example. More sophisticated products, such as medication management systems and non-invasive telemetry beds, currently available for hospitals and assisted living facilities, will make their way to the general consumer market to be sold by HME retailers.
I envision a slew of innovations hitting the market over the next five years that will help caregivers (family and professional) better monitor and care for their loved ones. I also expect to see mobility products incorporate technology to enhance functionality and performance. For instance, why couldn’t incontinence manufacturers use technology to detect product malfunction or to predict potential skin issues? There are few areas in HME where technology cannot play a role to improve patient experience and outcomes.
So how do we get from 2018 to 2023? If we are open-minded to change and dismissive of complacency, courageous enough to invest in our stores to make them outstanding, and demand that our manufacturers innovate to continually improve their product lines to ensure that we have available the very best products, I predict a very bright future.
This article originally appeared in the June 2018 issue of HME Business.
Wayne Slavitt is the founder and CEO of Mobül: The Mobility Store, which is an all-retail mobility provider business based in Long Beach, Calif. He also sits on the HME Business Editorial Advisory board.