As an industry, the Medicare DME supplier market world is more competitive than ever before. Whether it’s a product of technological innovations, an aging population, or some combination of the two, more people are accessing Medicare and medical equipment than ever before.
Thriving Medical DME Suppliers Push Boundaries
For medical DME (durable medical equipment) suppliers, and the marketing teams behind them, it is becoming increasingly difficult to position their products in a way that not only build brand recognition, but also contribute to sales growth. As more companies break into this industry, the last thing that medical DME suppliers and marketers needed was another barrier to their success.
Unfortunately, that is exactly what happened in 2011 when the Centers for Medicare & Medicaid Services introduced a competitive bidding process that would change how Medicare “pays suppliers for certain durable medical equipment…and make changes to who can supply these items.” While there is a wealth of information available about the competitive bidding process and the impact it has had on medical DME suppliers, the important takeaway is that the industry was made much more competitive, while the profit margins were made much smaller.
Interestingly, this change in procedure has created an issue for Medicare DME providers regardless of whether or not they win the bid. According to one industry insider, while a negative impact is obviously felt for those who lose bids, companies that win bids are struggling with the sheer volume of equipment required and lack the structure and efficiencies to succeed with orders of this scale.
Today, we are going to review a few ways in which medical DME suppliers can work towards staying competitive in a constantly changing, and increasingly regulated market:
Streamline for Efficiency
While this may seem obvious, the first tip for any company that is in a competitive industry experience change is to look inwards and determine where efficiencies or economies of scale can be created within your organization. Whether these changes take the form of implementing new technology, amalgamating positions, or outsourcing non-essential or labor-intensive tasks, making these difficult decisions will prove to be imperative to the future success of your organization.
Simply put, cutting costs while increasing revenues is the fundamental way to position your business to weather the storm of uncertainty. It’s what any of the sharks on “Shark Tank” would tell you and it is the most important thing to consider before reading on and exploring how else durable medical equipment distributors can thrive in a competitive space.
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Adapt and Understand
These types of changes are complicated, confusing, and it seems like the information you can find online about them is virtually limitless. This can make it overwhelming for medical DME suppliers and marketers alike to really recognize what these changes mean for their business and their success.
The CMS has a great resource for consumers regarding the details of the competitive bidding program that can help you better understand what information end-consumers are receiving. This is also a good opportunity to consult with mentors and peers within the durable medical equipment industry to ensure that you have a strong recognition about what steps you need to take to keep your sales strong during a competitive time.
Get Involved
While we’re on the subject of mentors and peers, one of the biggest tools available to your business during a turbulent time is your network and your industry itself. In the case of the medical DME industry, suppliers are coming together to challenge this process and create a change that allows their companies, and this industry, to thrive. Wayne Stanfield at HomeCare writes:
“What this industry needs is some of the fire and spirit that has brought out thousands of people in support of health care reform rallies around the country. We need hundreds of suppliers to be angry and refuse to accept this abuse! We need hundreds of suppliers to get involved, join their state DME association and join our unified national association, AAHomecare.”
What’s more is that recent research may suggest that the competitive bidding process may actually be posing some risk to Medicare beneficiaries themselves.
According to the study, less individuals living with diabetes were supplied with the proper durable medical equipment to properly treat their condition, and as a result more individuals elected to only use this equipment on a partial basis (or not at all). Unsurprisingly, this led to an increase in costs, hospital admissions, and unfortunately, deaths.
As you can see, staying informed and being involved with the changes taking place in the durable medical equipment industry are so necessary if suppliers and providers want their businesses to continue to thrive.
Don’t Give Up On Marketing
During competitive times, one of the first functions an organization will scale back is their investment in marketing. This is often a major mistake, as a major marketing program is one of the best assets to any company that finds itself in a competitive industry like durable medical equipment?
Our advice? Stay up to date on marketing trends and innovations, and whether these can be applied to your industry. For example, if your business has typically relied on traditional marketing, perhaps it is time to switch things up and try a marketing program like lead generation. Regardless of what you decide is best for your business, understanding the importance of marketing as a function of your success is key to thriving in a competitive space.
