Common sense tells us that beds and support surfaces will continue to be a safe, reliable niche. After all, handicapped people, accident and illness victims, and the elderly will always require a place to rest and recover. However, service demands, mounting competition, and the impact of the new Medicare Act means providers must work smarter than ever to remain profitable.

According to Ralph McBride, vice president of Advanced Home Care in High Point, NC, success in beds and support surfaces is all about efficient service. “With our job, 70% of patient care is in labor, the remainder is in the cost of the goods,” he says.

To streamline service to be more cost-efficient, McBride recommends building alliances with the local clinical community. Approach the most respected clinicians and identify clinically superior inventory at a reasonable cost. “If you know what the hospitals carry, you know what the home patient will prefer,” McBride says. “This saves you a good deal of service time with initial setups.”

Putting Service First
Taking a proactive approach to service also means conducting a proper evaluation of every patient. Vic Woodruff, sales manager of Carlisle Medical in Mobile, Ala, says his company spends a good deal of time qualifying a patient to determine his or her needs. The company looks at a patient’s height, weight, risk factors, and time spent in bed in order to determine the right match in support surface.

“We do the work up front so we avoid major service problems down the line,” Woodruff says.

At Saginaw Medical in Saginaw, Mich, the service team is equally proactive. At the initial evaluation, the provider considers three key factors: the patient’s health problem, the length of the equipment need, and where the problem is physically located on the patient’s body.

“With this knowledge, we can tailor a support surface to the requirements of the patient,” says Carl Miller, a Saginaw salesperson.

Miller is referring to modular products—mattresses where the foam can be moved to various areas, lending therapeutic support in the right areas for a given patient. This provides comfort to bed-bound patients while cutting down on future service calls.

But the service process involves more than simply understanding patient needs. It means a thorough evaluation of the environment, educating the caregiver, getting critical input from clinicians, and providing smart follow-up.

Getting the whole Picture
“The key to excellent service is evaluation of the situation in its entirety,” Miller says. He begins the process by meeting with the discharge planner to get a clinical understanding of the patient’s history, as well as background on the bed and surfaces he or she used in the institutional setting. Next, he makes a careful assessment of the home setting. In addition to considering the size and shape of the bedroom, ceiling heights, and door widths, the service side of the beds and support surfaces business requires anticipating problems.

“The setting can be a big challenge,” Woodruff says. For example, if there is a smoker in the house, it can affect the filter system on some support surfaces. In those cases, caregivers need to know that the filter may require more frequent checks. “When it comes to service, providers need to be flexible and extremely responsive,” he adds.

Most providers say they monitor bed and support surface equipment monthly. During follow-up service visits, they check the equipment, answer inquiries that caregivers may have, and assess whether the equipment is still needed.

“If you’re providing the right service, there should be no big surprises,” Miller says.

Making the Best of Medicare
However, while the service side of the beds and support surfaces business may be predictable and manageable to experienced providers, the reimbursement future for some of these products seems less certain since the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 became law. While providers have yet to feel the impact, industry legislative experts anticipate that should the act’s provision to reduce some Medicare fee schedules to match the average prices paid by the Federal Employees Health Benefits Program go into effect in 2005 as scheduled, reimbursement for some beds and support surfaces may be reduced up to 35%.

To protect profits, McBride says providers need to look at current product lines in light of Medicare guidelines. Careful assessment of your inventory will help alleviate some of the loss down the line. Moreover, providers need to be highly efficient, especially when it comes to managing receivables. McBride recommends that providers use a financial survey, such as the one developed by the American Association for Homecare, to benchmark how well they are doing with the billing and collection process.

And do not overlook the most obvious factor of all, staffing. To streamline the billing process, Miller recommends hiring highly qualified people in the medical billing area. “Medicare will always be a challenge because it can hold up payment for many months,” Miller says. “You need to be as efficient as possible with billing and make the best of Medicare.”

Another strategy is to reduce a company’s reliance on Medicare by finding additional sources of revenue. James Medical, a beds and support surfaces provider in Fort Wayne, Ind, developed additional streams of revenue that help alleviate the holdup in Medicare payments when it created a separate business division that supplies nursing uniforms, says sales manager Jeff Castator. “Any kind of direct sale that does not require the paperwork involved in the insurance process will help a provider maintain strong cash flow,” he says.

Carlisle Medical avoids the risk of Medicare cuts and payment holdups by concentrating on providing beds and support surfaces for the workers compensation market.

Competing on Service, Not Price
But as troublesome as Medicare may be, it, in theory, at least provides a level playing field where providers compete on service and not price. Both Miller at Saginaw Medical and Castator at James Medical say they have seen increasing competition in the beds and support surfaces business from companies that seek to make a big profit by skimping on service and quality equipment.

“It’s a growing problem,” Miller says. “In fact, some of these ‘competitors’ actually call and offer to pay us for follow-up service because they simply do not have the experience or knowledge base.”

Competition from providers willing to compromise on service can erode the morale of your sales force. James Medical found they were losing business, including in the beds and support surfaces niche, to companies that were offering deep discounts and low-end equipment, Castator says.

These challenges are likely to remain, but Woodruff remains optimistic since the need for medical beds and support surfaces in the home will not go away. “There will always be a place for the genuinely experienced provider—including the little guy—as long as he is committed to outstanding service,” Woodruff says. Those that can creatively adjust to the challenges may yet find the beds and support surfaces niche profitable.

Marianne Matthews is a contributing writer for Dealer/Provider.