Change is traumatic. This is true regardless of whether the change is positive or negative. Getting married is traumatic; so is getting a divorce. Starting a new job is traumatic; so is getting fired. Anything that takes us out of our comfort zone is traumatic.
As an industry, we had a nice “run” from the late 70s until the first part of this century. We were lightly regulated; audits barely existed; competitive bidding certainly did not exist; the NSC was not particularly aggressive; the contractors were likewise not aggressive; and reimbursement rates were high. It was not terribly difficult to run a profitable DME company. There was enough money to provide great services to patients and to keep happy employees on board.
This has come to an end. Congress and CMS have forced a complete transformation of the industry. In many ways, has this been unfair? Sure. In many ways, has CMS been out of touch with reality? Of course. But this is what the government does. We have seen this movie play out in health care and non-health care industries alike.
And so we are having to “remake ourselves.” But so have other industries. Think of Xerox. What immediately comes to mind are copiers. Well, Xerox has branched out into so many other areas that copiers are now an afterthought to Xerox. Polaroid and Kodak were icons in the photographic film arena. This arena is now extinct. The list goes on and on.
What is an absolute is that we have 78 million Baby Boomers who will live to be 85 years old, whose bodies will break down, and who will need DME. The demand for DME will be overwhelming. What is another absolute is that Medicare will not pay a whole lot and it will take a lot of effort to get paid by Medicare.
Can we as an industry meet the demand? Sure. Do we have to be creative regarding the products and services we offer? Absolutely. Do we have to work our tails off to produce only a small profit margin? Without question.
What gives me optimism is to see new players coming into the market. Medtrade used to be like a high school reunion. I knew everybody. I saw the same faces every year. This is no longer the case. During the past several Medtrades, I have not recognized most of the faces. They are new. I am seeing young, educated, entrepreneurial people coming into the market.
They are willing to take the market “as is….warts and all.” What they see is the huge demand. And they have the confidence that they will be creative enough to meet the demand—and generate a profit in doing so. The “old timers” are burdened by knowing how “things used to be.” That is truly a burden. The old timers need to force themselves to forget about the past and rethink everything.
Creative DME suppliers needs to think of themselves not as a traditional suppliers, but as a companies that sell products and provides services to help people have an enjoyable lifestyle. If the supplier can set itself apart from its competition, and find its own unique niche, then people will pay for the products and services. It may not be Medicare that is doing the paying. It may very well be the consumer that is more than happy to pay out of pocket.
I am a Baby Boomer. One day I will wake up and I will be 75 years old. When that happens, I will know that I will likely have about 10 more years left on this earth. Time will be my most valuable asset. I will not want to wait around for Medicare to agree to pay for something I want. Rather, I will pull out my Visa and pay for it. There are millions like me. We are the industry’s future customers.
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, Amarillo, TX