Today’s buying groups are more than just group purchasing negotiators. With the advent of Internet employee training, the four major buying groups in the HME industry are putting their years of industry expertise online for the benefit of their members. We contacted VGM & Associates, the MED Group, Essentially Women, and Northwood to ask them how online education fit into their company plans and if it has increased competition among the four groups.

VGM & ASSOCIATES: www.vgm.com  
With 1,800 members throughout North America, Van G. Miller (VGM) & Associates Group, Waterloo, Iowa, is the largest buying group in the HME equipment industry. Last year, VGM made a significant change by rebranding itself as a “Member Service Organization,” says company president Ron Bendell.

“While still an integral part of what we offer, purchasing contracts are just a portion of VGM’s programs to help keep our members a step ahead,” he says. “We stand for the independent HME dealer, and offer the widest variety of services.”

While VGM has made no major changes in its dues structure, Bendell says it has made significant additions to its services in the areas of education and business development. “We have continued our commitment to education through the addition of VGM Virtual University, which offers HME-specific and cost-effective continuing education and many of the courses include Continuing Education Units (CEUs),” he says. “We have also made a significant investment in technology to develop VGM AccuOrder™, an Internet-based catalog/order entry system that will allow members to receive orders from referral sources and place orders with VGM Group participating manufacturers.”

AccuOrder also includes a Quick Click Design feature for creating sales fliers and catalogs, and VGM is in the process of developing Web “super sites” that help members develop additional business.

In addition to its new initiatives, Bendell says VGM continues to offer business programs through VGM Financial Services, VGM Insurance, VGM Technologies, Freedom Link, product research, VGM Wholesale, VGM Creative, VGM Internet Services, and Homelink, which is slated to process more than 50,000 referrals this year.

The online VGM University will have some 200 courses and five CEUs by June of this year, Bendell says. Industry experts, such as billing consultant Jane Bunch, write the courses. Partnerships with brick-and-mortar universities that have specialties in HME are also in the works.

“The university serves as a convenient and cost-effective alternative for members wanting to train employees,” Bendell says. “A permanent record is kept that will include what courses have been taken or dropped, and how well employees have done, making it useful as a performance management tool.”

THE MED GROUP: www.medgroup.com
Since it was founded in 1968, The MED Group, Lubbock, Tex, has focused on helping members run their businesses more effectively, says director of marketing Mike McKillip. For the more than 250 current members, this includes networking opportunities at the company’s annual conference or in a members-only area on its Web site. According to McKillip, however, the main attraction of any buying group is its ability to provide opportunities for group purchasing.

“We pride ourselves on working closely with members to get business opportunities,” McKillip says. “For instance, about every 2 months we hold sessions in our Lubbock office where new and existing members can come in and we will assess their businesses and show them how to utilize every facet of the MED Group. We continue to roll out new programs to help members, and we also have programs in place to help vendors as well.”

While many HME buying groups have recently been expanding their educational offerings to members, the MED Group has always focused on this facet of service, McKillip says.

“We started long before anyone else and we have always offered services to our membership. Education is nothing new to us,” he says. “Once we identified education as a huge advantage for our members, we found that the best way to reach them was to go online. That led to the development of MED University over a year ago.”

MED University is a collection of online training and testing, written specifically for the HME industry. Every course is accompanied by an online test to track progress and CEUs are available. The MED Group also offers a CD and video library to enhance the program.

This year the MED Group also launched COMPASS, a book of HME best practices tailored for whichever accreditation agency (JCAHO, CHAP, or ACHC) a provider works with. COMPASS—an acronym for Count on Managing People and Systems Successfully—includes reimbursement tools, regulatory protocols, consulting services, and accreditation guidance.

While other groups are working toward an online education initiative, McKillip says that he believes this has not made the environment any more competitive than it used to be.

“If anything, a centralized location to get this education is really important for anyone involved with a purchasing organization,” McKillip says. “Members should have the ability to make one phone call and find out where to get help.”

Likewise, he does not see the opportunities provided by large buying groups as a hindrance to small member services organizations.

“Niche markets can still be served with smaller, more focused groups,” McKillip says. “Not every independent provider wants to be a number in the machine. They want to be treated independently and get the kind of specialized help that smaller buying groups can give.”

ESSENTIALLY WOMEN: www.essentiallywomen.com
In 1996 nine independent businesswomen came together to form Essentially Women to cater specifically to HME companies that provide health care products and services to women. Essentially Women may inhabit a niche in the buying group industry, but it still keeps pace with the larger member services organizations as far as what it offers its members, including a strong focus on education.

“We have always offered education options to our members and we continue to expand on that,” says Cindy Ciardo, manager of vendor services. “Our newsletter has expanded to include more educational articles and pieces on business practices. Another way we have expanded is through our email system, which allows us to send out notices and communications regularly to members.”

Essentially Women’s members have the ability to expand their operation base, find out about new products, increase efficiency, and access continuing education, the company says. The group also operates a rewards program based on purchases made with participating vendors, which can offset the $15 quarterly membership fee.

In the past year, Essentially Women’s strategy of catering to a niche market has drawn an additional 100 members, and new manufacturers and distributers also have joined the group. Although originally focused on post-breast surgery products, the scope of services has grown with time to include products and services for breastfeeding, lymphedema management, orthopedics, skin care products, wigs, incontinence, foundations, and credit card services.

“We are growing in many ways,” Ciardo says. “We have added a field representative to educate members on what buying groups offer. Some of our members get involved on a day-to-day basis, but others just don’t have the time. We are working harder as a whole group to show that we offer more than just good pricing.”

Even in the shadow of much larger buying groups, Ciardo says Essentially Women does not feel the pressure of increased competition in the field. “Certainly, there is an overall sense that this field is becoming more competitive, but since our group has taken on a niche that other groups have not, we don’t have those problems,” Ciardo says. “When you talk about VGM and The MED Group, they certainly are going after rehabilitation and respiratory care, but women’s health is not a focal point for them. Besides, providers can belong to more than one group and get the best of both worlds. We just happen to be a unique group in this niche area.”

NORTHWOOD INC: www.northwoodinc.com
The year 2001 brought increases in both compliance and membership for Northwood Inc, Center Line, Mich, which operates more than 3,500 locations to serve its members. Those members also get deals with at least 70 major manufacturers and distributors of HME, prosthetics and orthotics, infusions, home health, and pharmacy. Expanding those options has been a primary goal of the company, according to program director Penni LaBute.

“We have new vendors we have contracted with, but we are always looking to add more vendors to enhance our offerings,” she says. “I try to eliminate duplicate categories and just bring the best of the best on board.”

Northwood’s improved Web site allows members to scan pricing, terms, delivery, and other contract-buying information. It includes similar information pertaining to Northwood’s managed care network, updates on the group’s lobbying efforts, and dealer support/training. While members can not order anything on the site, they can link to manufacturers, some of whom have e-commerce potential.

Another goal for the group this past year has been expanding the educational opportunities for members, including investing in an online method of training.

“Just like other group purchasing programs, Northwood is looking for ways to bring value to their membership,” LaBute says. “The typical provider does not have the time or the resources to develop a comprehensive training program that they would like, and because of our unique position with the membership, this is something Northwood can offer, as well as other buying programs. From our standpoint, Web-based training is really going to catch on. It is an efficient way to do training and to keep content fresh and updated.”

The Northwood Navigator system includes 155 courses, and is customizable to each company. Members can purchase this as a prescreening tool to check new hires’ level of education and expertise.

Northwood also has seen little impact from the competition in this niche. In fact, LaBute says she thinks that each buying group has very positive things to offer to an HME company. “It is simply a matter of choosing two or three of the top buying groups that will allow them to best utilize all of their services and make them most successful,” she says. “I don’t see it as an occasion for jumping out as much as for adding another buying group to the mix. Especially with more of the smaller groups, the fees are lower in comparison and they offer vendors and entities specific to that HME [company].”

Liz Finch is a contributing writer for Dealer/Provider.