Beds and support surfaces often are a staple product of an HME business. They can round out a product line to create one-stop shopping and can be the engine that powers a reliable profit center. However, the challenges of running a successful bed business often vary greatly around the country.

Dealer/Provider checked in with a Florida, an Ohio, and a California bed and support surface provider to get their thoughts on regional differences and the threat of national competitive bidding for beds.

Florida
David Hodil is owner of US Medco in Orlando, a DME company that has covered the state of Florida since 1994. He freely admits that he made the move from Maryland specifically for the purpose of selling beds, believing Florida to be among the best bed markets in the country. Hodil markets to a mix of hospitals, care centers, and home health care clients.

Are there regional market differences between Maryland and Florida? “Absolutely,” he says. “In Florida there is a ton of business, but there is also an incredible amount of competition. It is actually easier to do business in the Delaware/Maryland/ Virginia market than here in Florida because there are fewer players. Everyone has gotten the idea of going to Florida, or Arizona, where all the retired folks are.”

Despite the predominantly geriatric population, Hodil purposely distanced his business from Medicare patients, which make up much of the group that are the beds’ biggest users. He now deals mainly with private insurers, citing the Balanced Budget Act (BBA) of 1997 as the reason.

BBA put into place regulatory changes and cutbacks that impacted the bed and support surfaces market. The biggest change affecting Hodil’s business was discontinuation of the preventive component.

“You can no longer place a patient on a support surface if he or she is susceptible to breakdown,” Hodil says. “Patients with very low Norton scores or Braden scores [risk assessment tools for predicting pressure ulcer formation] who formerly would be eligible for support surfaces to prevent decubitus ulcers now are not allowed to get those mattresses.”

Current Medicare regulations require a patient to have multiple Stage 2 decubitus ulcers to trunk or pelvis, or a single Stage 3 or 4 ulcer to trunk or pelvis, to qualify for a specialized mattress or support system. Once the wound resolves, Medicare requires that the system be discontinued. But once the specialized mattress or support system is removed, there is a strong potential the wound may reopen, Hodil says.

Many DME dealers, Hodil included, view discontinuing a specialized mattress or support system after the wound heals as a shortsighted approach and more expensive in the long run. “The mattress as a preventive measure is comparatively cheap, considering wound care costs,” he says. “When a surgeon must be called in to do grafts and flaps, costs soar dramatically. My business was radically changed by [BBA] because I had a considerable number of support systems being used preventively that had to be discontinued.”

In many cases, when Hodil explained to patients that the systems were being taken away because of Medicare regulations, the patients perceived him as a representative of Medicare. He ended up leaving many patients on the systems and absorbing the cost. “I simply felt obligated to make good,” he says.

Another factor with potential to affect the marketing of beds and support surfaces for Hodil is the data from the Polk County, Florida, Medicare competitive bidding project, which is scheduled to conclude in October. Florida state Medicaid has already proposed a statewide competitive bidding project, and national competitive bidding for Medicare may become a reality.

“[Competitive bidding] has limited the number of providers to a very few big companies. Whether or not the policy is implemented elsewhere may depend somewhat on what Medicare recipients are willing to tolerate,” says Hodil, who finds the policy intolerable because it could push him, as a small DME dealer, out of the market entirely.

Ohio
In contrast to Hodil’s urban setting, Paul Green, CRT, and his wife Sharon, also a CRT, own Pioneer Home Medical Inc in the small town of Marietta, Ohio. With a population of about 15,000, Marietta lies about 2 hours southeast of Columbus on the Ohio River across from Williamstown, WVa. The Greens’ single-location, independent company serves a largely rural area covering about 60 miles. They have been in business for 17 years, with beds and support surfaces representing about 10% of their business.

One of the factors that make their business unique is their exceptionally diverse calls. “We can go across the river into West Virginia and be setting up a bed in 5 minutes, or we can be in Ohio, following rural roads, and it can take us 45 minutes just to get to the patient’s house,” Paul Green says.

In this rural farming community, people tend to retire where they have lived all their lives. Therefore, a challenge Pioneer Medical often faces is delivering beds to old farmhouses that have small doors and narrow stairs. “Some time ago a large manufacturer developed a product called the split-spring bed with a frame that comes in two pieces. We use it almost exclusively now because it is easier than trying to maneuver a one-piece frame through small parlors and hallways,” he says. The split-spring model takes more time to set up, but a regular bed requires a two-person setup.

The majority of the Greens’ customers are Medicare home health patients. But if Pioneer Medical ever has to face Medicare competitive bidding, the company may be niched for survival just by virtue of its rural market. Because a wide service area is difficult to serve, bigger companies often are uninterested in working there.

Still the entire concept of competitive bidding concerns Paul Green. “It is sort of professional birth control,” he says. “With fewer providers, just like with managed care, people are limited in choice. There is little incentive to provide better care or service.” And he has learned that DME is very much a service industry.

Successful marketing techniques in a rural area differ from urban strategies. The Greens tried putting up billboards, advertising on TV, and running newspaper ads, but they never got much response. Then, about 4 years ago, they moved their business from a side street to a more visible location on the town’s main street. That and word-of-mouth marketing are now two of their prime sales generators.

The Greens’ clinical backgrounds and the care they are able to give are enormously helpful in creating referrals. “[Good service] works better than any advertising or marketing that we have ever attempted,” Paul Green says. He and his wife face competition from national companies and other independents, but he says they have worked hard to establish relationships and be responsive to referral sources and clients. This allows them to beat the nationals.

California
Ron Biasca, owner of Broadway Medical Service and Supply Inc in Eureka, Calif, has a business with about 20 employees that serves both urban and rural clients. A city of 30,000, Eureka is located just over an hour south of the Oregon border. In business since 1975, Biasca sees mostly home health care clients within Humboldt County, some of whom are in isolated areas. Beds make up about 20% of his mostly Medicare and Medi-Cal business.

Much of his marketing is done through establishing relationships. “Sales reps who are experienced in wound care come up to do in-services that we sponsor, for which the [home health] nurses can get CEU [continuing education unit] credits,” he says. Biasca’s representatives attend the in-services to answer questions and reinforce the company name with the nurses.

One of Biasca’s biggest challenges is educating the home health care nurse or family caregivers on the role of the bed. “When you put the bed in, other things come into play such as the positioning of the patient, diet, medication, and whether the patient is urine or bowel incontinent and how that is being taken care of. Sometimes people think you are just going to stick a mattress in there and the wounds are going to start healing,” Biasca says. When the wounds do not heal, the caregivers may blame the bed.

Misunderstandings about beds can be a concern because having a good relationship with the home health agencies and their nurses is critical for Biasca to get cooperation with the sometimes overwhelming amount of documentation needed for reimbursement. “If you get a nurse who is good at documenting, and getting the documentation to you, there is good reimbursement in [the bed business],” he says. “If you dislike paperwork, do not get into this business.”

Another challenge is retaining skilled employees who are motivated to learn the requirements of the insurance companies, and the various guidelines necessary for reimbursement.

Biasca’s advice to others considering adding beds and support surfaces is to remember that beds are expensive. “If the beds are not making you money, they are not doing you any good,” he says. “Before you dive in, read the reimbursement rules and learn what paperwork is required.”

Wherever a provider is located, supplying beds under post-BBA Medicare regulations and facing the threat of competitive bidding can be challenging. But for providers such as Hodil, the Greens, and Biasca, it is hard to give up the bed business. After all, not every reward is monetary. David Hodil recalls the first time he brought a therapy mattress to a patient—an elderly lady in Wauchula [Florida]. “It was heartwarming to see her comforted,” he says. “I wanted to get into the medical equipment business because I wanted to sell something meaningful. That moment was one of the nicest in my business.”

Judy Wade is a contributing writer for Dealer/Provider.