For the Jacksons, less reliance on government means peace of mind.

While many a small HME/DME provider are biting their fingernails about how national competitive bidding will impact their business, the same cannot be said of Dallas Jackson and Wendy Wigmore Jackson, RN. They are husband-and-wife owners of Jackson Medical Supply, a three-store retail establishment on the eastern edge of Northern California’s San Francisco Bay Area. “National competitive bidding? Sure, it’s a matter of concern for us, and we are not taking it lightly. But at the same time, we are not letting it scare us,” says Wendy.

Part of the reason for the absence of panic over this issue is that the Jacksons decided some time ago to take necessary strategic steps to protect themselves. “Our proactive response has been to open additional stores, at the rate of one every 18 to 20 months,” says Dallas, adding that he is even now scouting potential sites for a fourth outlet. “Our strategy has been to enter markets that are significantly underserved by the giant home care chains. Underserved either because the markets are too small and spread out for the nationals to effectively handle or because the needs of those communities require more than what the giants are equipped to provide—the big companies are not very good at delivering the highly individualized and personalized kind of support many patients simply must have.”

However, a more fundamental reason the Jacksons are not blanching in the looming face of national competitive bidding is that theirs is a business deriving no more than 20% of its revenues from Medicare dollars. “We could lose all of our Medicare business tomorrow and we would feel it, we would hurt,” says Wendy, “but we would still be in business.”

CONTROL THEIR OWN DESTINY
Jackson Medical Supply began taking form in 2000, with its first store opened the following year in the city of Vacaville, where Dallas and Wendy live. Prior to that time, the couple were employed by a DME outfit in the college town of Berkeley (before that, Dallas worked in the aerospace and oil industries, while Wendy, a former manager of an ICU, sold monitoring equipment). Berkeley was a nice place to live but not to visit—especially if one were traveling there from Vacaville, a bumper-to-bumper commute of about 50 miles, one way. The arduous daily drive to work, coupled with suggestions from friends that what Vacaville needed was a good mom-and-pop home care company, convinced the Jacksons to launch their enterprise.

From the beginning, Jackson Medical Supply was intended to be a retail-rich sales environment. Accordingly, the Vacaville store debuted with an extensive selection of products, which currently include motorized wheelchairs and scooters, lift chairs, walkers, canes, bathroom products, ADLs, blood pressure monitors, nebulizers, adjustable beds, compression stockings, and incontinence and wound care products.

In late 2003, the Jacksons opened their second store, choosing a site in the city of Woodland, about 35 miles to the northeast. In early 2005, their third location—25 miles southwest in Vallejo—went live.

The two branches closely mirror the flagship in terms of layout and ambiance. The Vallejo store, at 3,500 square feet, is the largest (Woodland is the smallest at 2,500 square feet), but the trio all devote roughly the same proportion (60% to 70%) of floor space to retailing. “We try to keep the store organized in a way that facilitates traffic flow from front to back, yet without making the customer feel they can’t freely walk around and take a good look at everything,” says Wendy. “Then, in each store, toward the back, we have created secluded space where we have incontinence products. This space is defined by shelving and dividers, which make the area clearly separate from the rest of the store, but without closing it off. We’ve done this because people are more comfortable looking at and discussing intimate items—such as incontinence goods—in a more private setting.”

The emphasis on retailing works hand-in-glove with the Jacksons’ desire to have an operation driven largely by good old-fashioned, cash-on-the-barrelhead transactions. “My background of having worked for a major aerospace manufacturer taught me a few things about being in tow with the government,” says Dallas. “Most everything the company did depended on massive government contracts, and those had the effect of taking the company hostage. I did not want that to happen to Jackson Medical Supply. As it turned out, by going the route we took, we were able to gain better cash flow than might otherwise have been possible and we ended up in a position to make better business decisions. In other words, we ensured control over our own destiny.”

IMPULSE BUYING DOWNPLAYED
Despite the emphasis on over-the-counter sales, impulse buying is not a big factor at Jackson Medical Supply stores. “We promote what we like to call ‘consultive sales,’” says Dallas. “We see middle-aged couples who clearly have never been in a store like this and are probably here because one of their parents is going through health problems. They are in desperate need of someone to hold their hand. That’s what consultive sales is all about. It’s not about hard-selling or going for the impulse buy.”

Speaking of buying, lower prices can be found elsewhere in the area, but Jackson Medical Supply usually comes close to matching them. And, sometimes—such as when vendors offer good pricing—Jackson Medical Supply beats its higher-volume competitors, the low-cost leaders.

In each store, inventory is maintained at minimal levels, with replenishment accomplished using the just-in-time method of stocking. They prefer just-in-time inventorying because it minimizes the amount of capital tied up in stock. “We never want to be stuck with a huge quantity of items that become obsolete,” says Dallas.

Reliance on this technique does not appear to hamper the ability of Jackson Medical Supply to obtain price breaks from its vendors. “With just-in-time, you’re in much more frequent contact with your suppliers, which allows you to develop a stronger, more productive relationship with them than would be the case if you just ordered from them a couple of times a year,” says Dallas.

ON MESSAGE
The stores have been effective at cultivating referrals from hospital discharge planners and other health care providers, including pharmacies. “Frequently, pharmacies in our area are asked to provide products they don’t stock, don’t want to stock, and don’t feel comfortable handling,” says Dallas. “That is when they refer to us, which they do with confidence that their customers are going to be well taken care of.”

Jackson Medical Supply keeps its name in front of discharge planners by hosting educational programs. “Twice a year we do in-services for the discharge planners to help them understand what we can bill, what products and services it is possible for their patients to obtain with insurance and Medicare, and what new products are available through us,” says Wendy. “It requires an effort to be sure, but it is worthwhile—these in-services are a big reason why we have less incidence of referral sources calling to request items that we know we’re not going to be reimbursed for.”

Jackson Medical Supply also advertises regularly in local newspapers and on TV to generate walk-in traffic. A touchstone in virtually every ad is mention of the availability of nurses to provide clinical info about the products and to answer health-related questions (the nursing team includes Wendy’s mother, Tess Wigmore, LVN). “We get a surprising lot of people coming in who say, ‘I want to talk to a nurse,’” Wendy offers.

Fostering good relations with the community is another way the stores promote referrals and walk-ins. To help accomplish that, the Jacksons joined the Chamber of Commerce in every town where one of their stores is located, plus two others. “We are active in those organizations,” says Dallas. “Wendy is a Vacaville Chamber of Commerce ambassador. We also get involved with community-based programs that support the elderly and that are participating in the fight against breast cancer. Last weekend we completed a blood drive for the local Red Cross—that is something we do at least once a year.”  

Rich Smith is a contributing writer for Dealer/Provider.