Best Practices in HME

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Best Practices in HME

• Presented by
• Bruce Brothis, Jack Evans
• Wes Hopper
• Sponsored by
• Jobst/BSN Medical
• www.RetailHomecare.com

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Hub Spoke Retailing

• Warehouse Hub
• Commercial or industrial location
• lt1/sq ft/mo
• Billing
• Rental equipment
• Delivery
• Warehouse

• Retail Spokes
• Visible accessible location
• 3-6/sq ft/mo
• 2,500 sq ft box
• 1,000-1,500 sq ft showroom
• 1-2 fitting rooms
• 200-400 sq ft storage/ break room

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Rollator ROI

• 1 4 sq ft
• Cost 79
• Retail 149
• GP 70
• Rent 24
• Net 46
• Fully Loaded
• GP 150
• Net 126

• Turns/mo /floor
• 1-2 Display 1/mo
• 2-3 Display 3/mo
• 5-6 Display 6/mo
• 10-12 Display 12/mo

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Intake vs. Sales

• Traditional Intake
• What insurance do you have?
• Show reimbursable product
• Process insurance

• Retail Sales
• Who is the end-user?
• What is their medical condition and need?
• Display all available products that meet their
  needs
• Ask for insurance
• Use ABN or sell upgrade for cash

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Cross-Selling/Up-Selling Mobility 2

• Requested Product
• Folding Walker
• Identified Need
• Mobility

• Add-on Products
• Rollator
• Basket
• Seat
• Tray/Cup Holder

ABN Upgrade 50-150 Cash Sale!
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Cross-Selling Wheelchair Rental

• Requested Product
• Wheelchair
• Identified Need
• Mobility and comfort

• Add-on Products
• Seat Cushion
• Back Support
• Pouch/Backpack
• Tray/Cup Holder
• Ramp
• Lift

Rental 150-250 Cash Sale!
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Cross-Selling/Up-Selling Bathroom Safety

• Requested Product
• Bath Bench
• Identified Need
• Stability in Bathroom

• Add-on Products
• Bath Chair
• Tub Rail
• Handheld Shower
• Grab Bars

Average bundled sale 150 - 200!
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Cross-Selling Hospital Bed Rental

• Related Products
• Bed Accessories
• Mobility (Wheelchair, Walker, Cane and Scooter)
• Bathroom Safety
• ADLs
• Lift Chair

• Core Products
• Bed
• Overbed Table
• Bedside Commode
• Identified Need
• Mobility
• Independence

Rental 200-400 Cash Sale!
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HME Revenue SourcesDiversify for Survival
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Transitioning HME Customer Demographics
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Sell Values

• Seniors
• Function
• Price
• Personal Benefit
• Basic Entitlement vs.
• Storeroom vs.

• Adult Children
• Lifestyle Benefit
• Bells Whistles
• Convenience
• Best Available
• Showroom

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Demographic Merchandising

• Seniors
• Front End
• Mobility
• Bath Safety
• Lift Chairs
• Scooters
• Back End (Demand)
• Incontinence
• Urology
• Wound Care

• Adult Children
• Front End
• Orthopedic Supports
• Compression Stockings
• Hot/Cold
• Back/Neck
• Back End (Demand)
• Diabetes Supplies
• Home Diagnostics

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HME Business Components

• Retail Location
• Showroom Display
• Product Mix
• Dedicated Salesperson
• Medicare Billing
• Referral Marketing

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Merchandising 1

• COG 30,000 - 40,000 w/distribution,
• 80,000 - 100,000 w/o
  distribution
• Cost showroom remodel 30/ft.
• Inventory turns 8 9/year for HME,
• 10-12/year for disposables
• Front 1/3 showroom 80 sales.
• Good/Better/Best selection closes sales.
• Display products on floor to touch/try/buy.

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Merchandising 2

• Core Profit Category
• The more product displayed, the higher the sales
  and profits
• i.e. Scooters, Power Chairs, Lift Chairs,
  Wheelchairs, Oxygen Delivery Systems
• Complete product selection of features, benefits
  and prices helps to close sales
• 2-3 Lift Chairs displayed 1-2/mo. sold
• 5-6 Lift Chairs displayed 3-4/mo. sold
• 10-12 Lift Chairs displayed 2-3/wk sold
  8-12/mo
• 15 Lift Chairs displayed 4-5/wk sold! 16-20/mo

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Staffing

• Opening Staff
• Owner/Manager/Sales
• Sales/Customer Service/Billing
• Warehouse/Delivery
• Basic Staff Positions
• Manager
• Inside Salesperson
• Outside Salesperson
• Customer Service
• Biller
• Delivery/Warehouse
• Reception/Office
• Gross sales/employee/year
• Good HME 140,000/employee
• Great HME 200,000/employee

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Revenue 1

• Revenue source breakdown
• Medi/Medi 30-40
• Private Insurance 20-30
• Retail (cash, credit card check) 40-60
• Top retail locations average 40 - 60 retail
  sales. ( 1000 transactions/mo.)
• Average retail transaction 160
• Saturdays highest sales of 5000 - 6000

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Revenue 2

• Factors limiting HME gross sales to 400,000 -
  600,000/year
• Less than 800 sq. ft. showroom
• No outside salesperson
• How to double this annual sales revenue
• Increase showroom to 1,000 1,500 sq. ft.
• Hire a dedicated outside salesperson
• Retail showroom 1,000/sq ft/annual gross sales
• 1 Mil gross sales generates 8-12 net

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Revenue 3

• First year break-even month 10-12
• Year 1 40,000 - 60,000 average/mo.
• Second year gross sales average 1 Mil to 1.5
  Mil per location.
• Year 2 80,000 - 100,000 average/mo.
• Year 3 120,000 - 140,000 average/mo.
• Average GPM 45
• Scooters, Lift Chairs average 35
• Disposables average 50 60
• Wheelchair cushions, compression hosiery
  orthopedic supports as high as 100

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Retail Pricing w/Medicare

• Tag all products with prices
• Tag all big-ticket items with both MSRP and Our
  Price or Sale Price
• Take minimum of 20 off Medicare-allowable
• Take 30 off Medicare allowable IF you have timed
  study to document additional billing costs
• Use ABN to sell upgrades

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Successfully Selling Against the Chains www.

• Boutique Business Basics
• HHC Specialty/Niche Retailer
• More knowledgeable salespeople
• Deeper selection, higher margins
• Experiential store environment

• Sell the Package
• Medical grade product 20-30 added value
• Consumer education
• Product demonstration
• Delivery
• Customer service follow-up
• 24/7 support

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Prime Retail HHC Markets

• Bariatrics
• Display extra-large products on floor
• Plus Sizes or X-Sizes
• Home Accessibility
• Stairglides
• Walk-in showers/tubs
• Bath Lifts
• Ramps
• Bath Safety

• Womens Health
• Near oncology centers
• Separate interior room
• Diabetes
• Complete leg health
• Shoes
• Home BP monitoring