Jim Greatorex is a big believer in community. So it was understandable that for the last several years, he dreamt of home care companies large and small, representing every specialty and product segment, banding together from across the nation to stand in solidarity against Medicare competitive bidding.

For the most part, they did—or, rather, enough of them did—to help propel HR 6331 through Congress and survive a presidential veto. This thrilled Greatorex, president of Black Bear Medical in Portland, Me, an unflappable optimist who is fond of comparing home care to baseball's Boston Red Sox and basketball's Boston Celtics, teams that only a short time ago many had written off but came back with a vengeance to finish on top. "Our industry was a huge underdog in this contest to stop competitive bidding," he says. "It seemed to me that we were not going to win anything from Washington unless we believed we were going to win—just like the Red Sox and the Celtics. Even after their terrible 2006 season, the Red Sox had faith that they could win. And they did. They went on to become the World Series champions in 2007. Same with the Celtics."

Greatorex contends that HR 6331 was historic legislation that may well serve as the proverbial stake through the heart of competitive bidding. However, he also asserts that a high price was paid to enact HR 6331. "The 9.5% reimbursement-cut compromise in the new law is steep. For many of us, it will be too steep," he says.

Overall, though, gutting competitive bidding was a supremely worthwhile endeavor. "It absolutely had to happen for the sake of the consumer and of the providers," says Greatorex. "Complex rehab should never have been included in competitive bidding—we already had our pricing adjusted with the new rules back in 2006, and there was no more room for further cuts, which is what competitive bidding would have brought. We really were rushing headlong into a train wreck, so thankfully that won't happen now."

RELATIONSHIP-DRIVEN BUSINESS

Legislative activism is nothing new for Greatorex, immediate past-president of the New England Medical Equipment Dealers Association (NEMED): he has participated in about a half-dozen DC fly-ins over the years, has met from time to time with members of his state's congressional delegation, and has helped raise serious campaign contributions for the most influential of them. Everything he has done at the national level he has replicated at the state level in Maine. "I've been working hard on the legislative front the last 3 or 4 years," he says. "The support I received from my business partners made it possible for me to invest the time needed."

To be precise, Greatorex has five such partners. None, however, was present at the time he founded Black Bear Medical in 1988 after years of running a wholesaler's Portland retail rehab operation. "When that store was put up for sale in the late 1980s, I decided to leave and start Black Bear Medical," he recounts. "I had a solid base of contacts from my experiences in rehab sales, and I had confidence that I could draw on that base to build a thriving company of my own."

The core business activity at Black Bear Medical today, as in the beginning, is complex rehab, currently representing approximately 50% of revenues. Greatorex credits three primary factors for the company's success in that field: great employees, careful attention to detail, and excellent products.

Among all his employees, Greatorex emphasizes the importance of relationships with patients, vendors, referral sources, and payors.

As for great employees, Black Bear Medical has 28 of them spread among three locations (in addition to Portland, the other two are in Bangor, Me, and Portsmouth, NH). Counted among the 28 are four certified rehab technology suppliers. "Something all our employees understand is that rehab is a relationship-driven business," he says. "But it is not only with the end user that relationships apply. Just as important are our relationships with the referral sources, the payors, and the vendors. When the relationships work, everybody wins."

To properly appreciate the importance of attention to detail in the rehab success formula, one must view it from the perspective of the customer. "Getting the little things right can mean the difference between a wheelchair that works well and one that doesn't, simple as that," says Greatorex. "And from a purely business perspective, attention to detail is important because—if you dot your i's and cross your t's—you'll get paid for that great service you're providing."

Then there are the products. The greatest of them for Black Bear Medical are manual tilt-in-space wheelchairs, complex power wheelchairs, and almost anything rehab-oriented for children. On the flip side, the less-than-stellar performers are scooters and other consumer-level power mobility devices. Says Greatorex, "Consumer power is difficult because only about half the people who walk in asking for these products qualify for them under Medicare rules. Then, because you're dealing mostly in a nonrehab setting, you have to clerically deal with primary care physicians and their staffs for medical necessity documentation that usually isn't correctly written up owing to the fact that those providers lack the experience writing it—a real nightmare to deal with. If we could, this is a product category we would let go of, but we can't because the market demands it—and our philosophy is to never be in the position of telling someone no. We want to always say yes, if at all possible, when asked about a product. Say no enough times to customers and you'll find yourself dropped from the referrer call lists."

MARKET LEADER

Rehab once accounted for 75% of Black Bear Medical's business. The subsequent decline to its current percentage occurred not because the company is doing less rehab volume (it actually is doing more), but because the company's retail involvement has grown—from zero just a few years ago to now about 25% of total activity. Retail selling occurs at all three locations, but the 5,000-square-foot Portland showroom consistently amasses the most robust transaction figures (due in part to its choice location on one of the city's busiest streets).

"We ventured into retailing because I didn't like having all our eggs in one basket, and too many of those eggs were cushioned by Medicare," Greatorex explains. "I was not at all comfortable with the idea that Medicare might emerge as our biggest payor partner. It never was, but it could have been if we hadn't turned to retail. In my thinking, Medicare needs to be 20% or less of the payor mix for a company to be successful. Right now, 25% of our revenues come from cash. I'd like to see that grow significantly higher. There's nothing wrong with the three C's—cash, check, and credit card."

The balance of Black Bear Medical's payor mix puts Medicaid at 35% of the total and private insurance at 20%. Another 25% of the Black Bear Medical income picture is made up of supplies: chiefly, incontinence, urological, and ostomy goods.

There also is an accessibility department. At present, 5% of revenues come from sales and installation of accessibility items, such as a faux-wood modular ramp system made exclusively for Black Bear Medical, along with lifts of various makes and models. "Liability rules prevent us from cutting and drilling into cars and trucks, so the vehicular lifts and ramps we carry are those that can be installed without that kind of work," says Greatorex.

Although Black Bear Medical is the market leader in Maine when it comes to home rehab, the company recognizes the foolishness of thinking it can hold that position without effort. "Complacency is not allowed because the competition is always nipping at our heels," says Greatorex. "But that's OK. We don't mind being dogged by our rivals because it helps keeps us on our toes."

AMBITIOUS OUTREACHES

Black Bear Medical is accredited. Interestingly, the company resisted obtaining that status for quite some time. "We were a successful business before we became accredited, and it was not until fairly recently required in Maine, so we saw no real need to do it," Greatorex confesses. "We changed our minds when some of our managed care payors began insisting on it. By that time, accreditation was being discussed as a future Medicare requirement."

An accreditation manager was hired to shepherd the company through the survey preparation process. When examiners from The Joint Commission completed their white-glove inspections of the enterprise, Black Bear Medical was awarded a top grade. Looking back, Greatorex quickly concedes that accreditation was no waste of time, energy, and expense. "It made us a better company—better organized and safer for our employees and customers. The lesson in this is that, even though you may not like the idea of undertaking accreditation, when it's over, you'll be glad you did it."

The core business at Black Bear Medical is complex rehabilitation, which currently accounts for about half of the company’s revenue.

Not only that, but accreditation introduces one more compelling line to the story that Black Bear Medical tells potential customers through the company's marketing campaigns. A centerpiece of that effort this year is a pediatric and adult rehab-themed educational seminar for referral sources; it is slated to be held next month (October) and will feature nationally known speakers.

On the retail side, if there exists a channel for communicating with the public, Black Bear Medical has almost surely already used it. "We've done it all: television, radio, magazines, newspapers, mail, the Yellow Pages, the Internet, health fairs," Greatorex says. "Everything we've tried has brought us business, but not everything has been successful every time it's been tried. The one that has historically worked best for us is newspaper display advertising. In the last 2 years, newspaper readership has declined dramatically, so newspaper advertising is now much less effective for us."

Black Bear Medical developed a splashy Web site, but was somewhat disappointed that it did not generate more traffic. "Like a lot of companies trying to create a presence on the Internet, we built a great Web site and then figured that nothing more needed to be done with it," says Greatorex. "It took us a while to figure out that you have to continually update your Web site with useful content if you want lots of visitors. And that's something we're making plans now to address."

OUTLOOK GOOD

Plans for dealing with Medicare national competitive bidding are not quite so urgent at Black Bear. "Enactment of HR 6331 gives us an opportunity to chase away the smog and clear the air enough so that maybe we can get a handle on where our reimbursement is actually now headed," says Greatorex.

The battle he and others fought against competitive bidding delivered more than a crushing blow to the Medicare cost-savings scheme. It also ensured the home care industry a seat at the federal government's table for discussions about future initiatives concocted by CMS and other agencies. "I think lawmakers next time will want our input before approving any new programs that impact us and those who we serve," Greatorex predicts. "Part of the reason for that is the relationships the industry was able to develop with members of Congress and their staffs."

The strength of those relationships may be put to the test sooner rather than later: Greatorex believes the industry needs to return to Washington and petition for relief from the 9.5% complex rehab cut. "We won't be able to provide our clients what they need if that 9.5% cut isn't reduced."

Nonetheless, Greatorex is optimistic about the industry's fortunes. "The demographic that needs home care products is only getting bigger. And the home care industry is only getting better at providing those products and doing good for the people we serve. The business models exist to allow companies in home care to do well despite what has been happening to reimbursement. This is a good industry and it's facing a good future. I think this industry gets so uptight sometimes that we forget to smile. It's okay to smile."

Rich Smith is a contributing writer for HME Today.