Successfully operating a rural HME business requires somewhat different “math” than that used by big city providers. Those of us who do not have a large nearby population have to use different equations to survive, grow, and prosper in the HME business.

Our business, Rice Home Medical (RHM), has four locations in west central and southwest Minnesota. It serves more than 30 counties with a total area population estimated at less than 240,000 people covering over 300 square miles.

While we are the only HME located in most of the counties we serve, we do face competition from larger metropolitan area HMEs located in the Twin Cities of Minneapolis and St Paul (100 miles), Sioux Falls (150 miles), and St Cloud (60 miles). I am the executive director and have managed the company since it started in 1988.

RHM is owned by Rice Memorial Hospital (owned by the city of Willmar, Minn) and Rice Health Foundation. A management oversight committee consisting of two hospital board members and two members of the hospital foundation acts much like a corporate board of directors. The hospital administrator and I both sit on that committee as nonvoting members. This management structure has served us well.

Hometown Proud
With nearly 40 employees and annual sales of more than $3,500,000, our business is and always has been profitable and a valuable asset for the rural area we serve. Without RHM, I do not believe the people in our area would get anywhere near acceptable service levels for HME. Along with that problem, our communities would be faced with higher overall health care costs due to hospital re-admissions and delays in discharge. If national chains or larger regional HMEs were left to service us, they would be unwilling to locate properly trained personnel or adequate inventories in the area. They would attempt to serve us from faraway branch offices and service levels would suffer greatly.

This brings me to my first equation: Low population + long distances = an opportunity to excel.

Distance and time are both a blessing and a curse for us. Even with three branch offices (Madison, Glenwood, and Redwood Falls) in addition to our main office in Willmar, our delivery staff often has to travel more than 60 miles one way to make a delivery or service equipment for a single patient. Reimbursement systems now in place almost never allow us to recover the additional cost of this extra delivery and service effort. These distances help us remember to plan our trips and focus on serving all of a patient’s needs. While our core business is respiratory and rehabilitation equipment, add-on sales of even small items can enhance profit or make an otherwise marginal sale profitable.

The positive side of those distances is that the associated travel expenses have kept most competitors from regularly coming into our area. It is tough to compete with a “home town” company that pays attention to customers.

RHM does have an occasional problem with competitors “cherry picking” high-dollar business from patients who leave our area for specialized treatments and then return home needing HME. We deal with that with our second equation: Outreach marketing = disappointed competitors.

We use outreach marketing continuously. We go in person to referral sources in larger cities where local residents are sometimes treated and educate the sources on RHM and its capabilities. We reassure them that RHM can and will take good care of their discharges.

In addition, we always attend patient care conferences on “high-tech” cases that are coming into our area. This willingness to participate, even when travel is involved, makes RHM not just a viable choice for the assignment, but the logical choice to referral sources who recognize extra effort and professionalism.

Of course, this outreach and out-of-town effort would not be enough if we took for granted our core referral sources and local communities. We don’t.

Working Together
Our third equation is: Attention at home = strong team ties. At RHM we support and preach the team approach to rural health care. Even though we have licensed professionals on staff, we make it clear to our partners in health care at nursing agencies, physician’s offices, hospitals, etc, that we are the “equipment specialists” and will look to them for their expertise in working with each patient. We are always happy to provide equipment in-services and troubleshoot. We never (well, almost never) point out “operator error” to referral sources; we just repeat the in-service and thank them for calling. We make it clear that they are handling the patient and we are there to help them and make sure the equipment is what they need.

We also regularly visit referral sources and local customer bases in the communities we have offices in and near. In-services are held at clinics in our areas and we try to create “informal partnerships” with these sources of business. We want them to know that we do care about their problems and will work with them to find solutions, even in situations where we will not make money.

We strive to be the comprehensive resource center on HME issues for the local medical community. All of our offices offer space and staff for support groups so patients and local organizers will not need to drive far. Our customers’ problems are our problems, and they know that we are “right here in town” when they need us.

Getting Involved
It is critically important for our key staff personnel to be an active part of our communities. Community involvement = community support is our fourth equation and it is not just a marketing gimmick. Anyone who knows me knows that I do things in the community because I want to, not because it is good for business. The fact is I genuinely like people, and I am proud to tell them where I work and what we do for people who need help recovering or getting along at home.

I try to instill in my customer service and marketing staff the importance of having empathy for patients and going the extra mile to assist caretakers and others in the medical community who are trying their best to help patients.

Our affiliation with the major area hospital, the city of Willmar, and the Rice Hospital Foundation opens doors for us. We are grateful that the hospital administration has seen fit to let us operate “on our own” for most purposes and yet cooperates with us in marketing efforts and other support areas.

I have served on many boards and commissions in my community, and I try to get out to every major community event. I am on the board of the local Chamber of Commerce and just ended a term as an officer of the local Eagles Lodge. I am active in my church, including the parish nurse program, and I keep in close touch with local government officials.

Does this all matter to the bottom line? You bet it does.

I visit with my state legislator at the local coffee shop from time to time and can call him by his first name when I ask him to speak at our regional association meetings. Keeping in touch with federal elected officials while they are at home is vastly preferable to fighting to get 15 minutes with them in Washington, DC.

I serve on the rural health school planning board and get to meet many of the “big city” medical students, pharmacists, public health nurses, and social workers who come out our way for training. I show them how our rural health care teams work, learn their names, and find out firsthand what they need and want from our side of the equation.

While we must be competitive with prices and always give good service, I believe that people, both patients and referral sources, would rather deal with someone from their local area that they know and trust than strangers.

Smart Thinking
Our fifth and final equation is: Knowledge = power. Knowing the ins and outs of what can be a very complicated business is vital no matter how small the communities you are based in. We have to have all of the services and equipment that the patients and referral sources in our area need. If we don’t, we leave the door open to outside providers.

That means we all have to “train, train, train” in both equipment and Medicare/ Medicaid reimbursement and other regulatory issues. We are subject to the same laws and payment hassles that larger companies are, and we have the same exposures to liability if we do not stay current on equipment and service issues.

Being rural does not mean being out of touch. I stay active in both the American Association for Homecare (AAHomecare) and our regional association, the Midwest Association of Medical Equipment and Services (MAMES). I am currently on the board of MAMES and a State Leader for AAHomecare. I regularly attend industry events and have come to know people in the business in many parts of the country.

RHM also belongs to the VGM Group, a national members services organization. We can purchase products at about the same price paid by our largest competitors and get research done quickly and inexpensively.

It takes a lot of work but once you figure out the equations, the solutions to being a successful rural HME provider are clear and simple.

Carol Laumer is executive director of Rice Home Medical in Willmar, Minn. RHM was awarded the MAMES Provider of the Year award for 2000.