Jack Evans wwwRetailHomeCarecom How to Grow Your Retail HHC Business The Universe of Part B Providers Before Accreditation 105000 total After Accreditation 89400 remain After Competitive Bidding ID: 744025
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Slide1
Presented to ECRM HHC byJack Evans www.RetailHomeCare.com
How to Grow Your
Retail HHC BusinessSlide2
The Universe of Part B ProvidersBefore Accreditation:105,000 totalAfter Accreditation:
89,400 remainAfter Competitive Bidding:
CMS: 2,000
bid winners
= 20,000-40,000 locations?
After Audits:How many are HME’s left???
Is the glass half-full or half-empty?Slide3
Government Reimbursement Programs at Risk? (The End of Entitlement Programs?)Ratio of FTE’s Supporting each Medicare Beneficiary: US2010: 4 to 1
2020: 1 to 1 Canada2010: 5 to 1
2040: 2.5 to 1 Slide4
Why Retail HME?DecreasingHospital StaysGovernment ReimbursementHMO Coverage
Extended Family CareSeniors as CustomersDemand for basic “Good” Products
Increasing
Aging Population
“Quicker & Sicker” Patient Discharges
Health & Wellness
Self-Care
Baby Boomers as Customers
Demand for “Better/ Best” ProductsSlide5
Baby Boomers & Family Caregivers as HHC Customers
Boomers represent ¼ of US population45 Million “First Wave” Boomers10,000 are turning 65 daily for the next 16 years
Baby Boomers represent 65% of current HHC customers
Imagine the impact on retail HHC:
Think Rock n’ Roll, SUV’s, Starbucks, Botox & Viagra!Slide6
Making HME AffordableLowest Acquisition Cost LinePrivate LabelGeneric
Lay-Away ProgramFinancing Program
Third-Party Insurance
Used HMESlide7
Retail Pricing w/MedicareTag all products with pricesDesignate your Medi/Medi productsTag all big-ticket items with both MSRP and “Our Price” or Sale Price
Take minimum of 17% - 20% off Medicare-allowable Use showroom signs to “Ask Us About our Retail Prices,” or “Ask Us About our Cash Prices.”
Use ABN to sell (w/upgraded codes)Slide8
Levels of Retail HHC Level 1Planogram(s) of HME Level 2
Display on showroom floor to complement planograms (min. 400 sq. ft.)
Level 3
Department
(min. 800 sq. ft.) with dedicated salesperson plus
rentals, insurance billing, delivery, and fittings (i.e. accredited Part B Supplier location)Slide9
Retail HHC ROI12’ HME Planogram (i.e. Chains) 40% GP
= $15,000 - $20,000/gross sales/yr400 sq. ft. Display$200 - $300/sq ft/ gross sales/yr
= (approx. $100,000 - $150,000)
800 sq. ft. Department
45% GP
$400 - $600/ sq ft/gross sales/yr
= (approx. $300,000 - $500,000)1500 sq ft 50% GP$800/sq ft/gross sales/yr
= (approx. $1.2 Mil)Slide10
Basic Rx OfferingHome medical equipment (HME) or any other home health care products that are scattered throughout the store as part of other departments. These
products are shelved as OTC’s to sell themselves:Blood Pressure Monitors and Diabetic Products
are shelved behind the counter.
Incontinence Products
are next to diapers.
Bathroom Safety Products are displayed with urinals, bedpans and sitz baths.
Wound Care is part of first aid.Canes are hanging from a floor stand wherever there is room for the display.
Orthopedic Supports
are next to foot care.Slide11
Level 1 Retail HHC: PlanogramHME shelved as OTC’s to sell itself.Displayed as one HME/HHC category.Minimal selection of best sellers.Retail, cash products only.
8’ – 12’ planogram depending upon available spaceSlide12
Level 1 – Examples4’- 6’ Mobility:
Cane Quad CaneFolding & Rolling WalkersTransport ChairCombo Rollator/
Transport Chair
Standard WheelchairSlide13
Level 1 – Examples4’- 6’
Bathroom Safety: Grab BarElevated Toilet Seat
Bath Bench
& Chair
Hand-held
ShowerCommode
Personal Care (i.e. bed pan, male & female urinals, sitz bath, donut pillow) Slide14
Level 1 – Examples2’ – 4’ Orthopedic Supports:Carpal Tunnel BracesKnee & Elbow Supports
2’ – 4’ Compression Hosiery Support StockingsGraduated CompressionSlide15
How to Grow to Level 2 Retail HHC: DisplayOffer Floor, Counter, & End-Cap POP DisplaysOffer Showroom Samples for displayTake products Out-of-the-Box to display
Accessorize 1 core product per categoryExpand Selection to offer basic (i.e. Medi/Medi) and an upgraded product optionInservice CSR’s
on all productsSlide16Slide17
Level 2 Rx
400 sq. ft. Floor DisplayTrained
SalespersonSlide18
How to Grow to Level 3 Retail HHC: DepartmentExpand selection to Good/Better/Best product optionsCreate HHC Departments for each category with minimum critical mass for displayCreate Retail Adjacencies
to maximize cross-selling and up-sellingInservice Dedicated HHC Staff on all products and on solution selling
Make
Joint Sales Calls
on key referral sources
Help coordinate Co-op Advertising Program Help coordinate and sponsor
Open Houses by categorySlide19
Before:Cards & Candy= Rx Front-EndSlide20
After: HHC= Rx Front-EndSlide21
Results:1 Week’s Gross Profit for HHCwas GREATER than1 Year’s Gross Profit for Cards & Candy!i.e. How many cards/candy bars/rolls of paper towels/toilet paper do you need to sell to: = GPM on 1 Lift Chair or Scooter?Slide22
McKesson HHC Rx of the Year 2010
EntranceSlide23
The HHC RxSlide24Slide25
Diabetes Center BasicsDiabetic Supplies:Test StripsSyringesLancetsGlucose
InsulinOTC’s:
Sugar-Free Snacks
Protein Drinks & Bars
Sugar/Alcohol Free:
Cough Drops & Syrup
Toothpaste & MouthwashAntacidsShampoo & Conditioner
Vitamins & Mineral Supplements
Skin Care Lotions/Creams (for both healing w/Urea and dryness)
Diagnostics:
Blood Glucose Monitors
Blood Pressure Monitors – manual, auto-inflate, wrist
Cholesterol Tests
Thermometers – digital, ear, forehead
Scales – digital, body fat Slide26
Diabetes Center Destination Diabetics need a one-stop destination that meets ALL of their healthcare needs. In literature/advertising promote that you carry all of the HHC products that diabetics need to maintain their health: Glucose ControlBlood pressure
Sugar and Alcohol-Free OTC’sProtein and Sugar-Free SnacksEye & Oral Care
Skin
Care
Foot Care
Diabetic ShoesCompression Slide27
Diabetes Center Destination Foot Care Wall Display. Provide a complete selection for diabetes leg health. Feature at least two full lines of shoes, plus a medical grade line of orthotic gel inserts and pads. Diabetic Shoes Diabetic Socks
Gel InsolesGel Inserts ArchesMetatarsal & Heel Pads
Skin CareSlide28
Rx Chain Hub & Spoke HHC OperationHC “Hub”HME ShowroomDedicated HHC Staff
Immunizations
Zoster
Pneumococcal
Influenza
MTM
Patient Education
Classes
Disease Management
Diabetes
Blood Pressure
Cardiovascular Risk Assessment
Lifestyle Management
Smoking Cessation
Weight Management
Rx “Spokes”
Rx
OTC’s
12’ HME Planogram
Vitamins & Supplements
Flu ShotsSlide29
Hub & Spoke Retail HHC OptionWarehouse “Hub”Approved government providerAccredited Less expensive location
$.50/sq ft/mo4,000 – 8,000 sq ft total
Billing staff & software
Rental equipment
Delivery
Warehouse
Retail “Spokes”
Cash
only
Reimbursement
& intake via Hub store
Visible & accessible location
$2-
$4/sq
ft/mo
800-1,200 sq ft showroom; 1,200 – 1,600 total space
Retail salespeople
No accreditation,
billing, rentals, warehouse, driverSlide30
CSR’s: Intake Hurts Retail SalesTraditional Intake“What insurance do you have?”Show reimbursable productProcess insurance
= 1 hr.= 1 product/patient
Retail Sales
“Who is the end-user?
“What is their medical condition and need?”
Display all available products that meet their needs
Ask for insuranceUse ABN (w/upgraded code)Cross-sell and up-sell
= 20 min.
= 2 products/customer
1 intake = 2 lost retail sales/hour = minus $300 - $400/hour!Slide31
Best Practices: RevenueRx-Based Retail HHC10% – 20% Medi/Medi20% – 40% Private Insurance
50% – 70% RetailFull-Service Retail HHC
20% - 40% Medi/Medi
10% - 35% Private Insurance
50% - 65% Retail (cash, credit card & check)
$800/sq. ft./gross sales/year (w/min. 1,000 sq. ft. showroom & dedicated salespeople)Slide32
Best Practices: SalesSingle location retail HHC w/ Medi/Medi generates minimum $1Mil - $1.5Mil gross sales/year$1 Mil gross sales generates 8-12% net/netBest Practices = 15-20% net/net if fully automated Dedicated retail salespeople generate $150,000/FTE/gross sales/year
$200,000/FTE/gross sales/year if fully automatedSlide33
Best Practices: Product MixThe more product displayed, the higher the sales and profitsi.e. Scooters, Power Chairs, Lift Chairs, Wheelchairs, CPAP, 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 = 8-12/mo
15 Lift Chairs displayed = 16-20/mo
Departments w/category signs and minimum critical mass:
8 – 12 Lift Chairs
•
6 - 8 Wheelchairs/
4 – 6 Scooters Transport Chairs
8 – 12 Rollators
•
2 Beds (Hospital/Adjustable)
50 Designer Canes
•
12’ Planograms for Core
CategoriesSlide34
Rollator ROI1 = 4 sq ftCost = $79Retail = $149GP = $70Rent = $40
Net = $30Fully Loaded:GP = $150Net = $110
Turns/mo = #/floor
1-2 Display = 1/mo
2-3 Display = 3/mo
5-6 Display = 6/mo
10-12 Display = 12/mo
Accessorize 1 Core Product/Category!Slide35
“Can Retailers Halt Showrooming?” Brick-and-Mortar vs. Internet-Only Best Buy vs. Amazon
Customers shop in retail store for brand and complete product selection
Customers buy online for price (and free shipping)
50% of consumers who buy products online have already shopped for them in a traditional retail store.
Chains are offering free shipping – and matching competitor’s online pricing – for their best customersSlide36
Successfully Selling Against Mass Market & InternetBoutique Business BasicsHHC = Specialty/Niche RetailerMore knowledgeable salespeople
Deeper selection, higher marginsExperiential store environment
Sell the Package
Medical grade product =
Brand
= 30%-50%
added valueConsumer education
Product demonstration
Delivery
Customer service follow-up
24/7
support
Recall notification
Warranty support
Repair service w/o shipping cost or wait period Slide37
Superior Customer Service: Educate First, Then SellQualify:Ask questions to identify customer’s needs Who is the end-user?What are their daily HHC issues?Educate:
Explain & demonstrate products that best meets those HHC needsExplain personal benefitsOffer Solutions:
Educate about personal choices
Discuss alternatives to determine the best solution
Close the Sale!
Match Customer’s Needs with HHC ProductsSlide38Slide39Slide40Slide41
Does Your Hospital Bed Look Like This?Slide42
US Healthcare TrendsTransition to Outcomes-Based HealthcarePreventative vs. critical careOutcomes-based reimbursement vs. fee-for-service
Treatment care plans for chronic disease patientsHealthcare professional to coordinate care
Focus on Disease Management Programs
Patient Adherence
Patient Education
Patient Compliance
HME/Rx as Patient Care Coordinator?
Monitoring on regular basis (i.e. monthly visits)
Patient education paid per session
Share in profit from positive patient outcomesSlide43
The Rx Transition:Where are you?Slide44
Traditional Rx: Reactive Pharmacist behind counterPill-counter (“Count, lick & stick!”)Scripts as profit center
OTC’s + impulse sales = high sales/customer
Life was good!Slide45
Current Rx: Community Healthcare CenterVitamins & SupplementsCompoundingHome Healthcare (HME)
Flu Shots & Immunizations“Doc-in-the-Box” Clinics
Weight Management Programs & Products
Smoking Cessation Programs & Products
Dabbling w/o focusSlide46
Future Rx: Preventative & ProactivePatient EducationMedication Review & Synchronization (=
Adherence)Disease State Management (=
Compliance
)
Outcomes–Based
Health Plans
(= Patient Care)
Patient Care CoordinatorSlide47
Medication AdherenceOver 40% of patients do not take their medication as prescribed.Of the 45% of N. Americans who have a chronic disease, 1/3 never fill their prescriptions.Adherence alone would keep the majority of patients with chronic illnesses healthier and out of the ER and hospital.Outcomes payments for quarterly med reviews.Beyond pill boxes: “Smart” automatic medication management systems remind, dispense, alert, and post information on compliance and inventory.Slide48
Medication Therapy Management (MTM) Medicare ReimbursementPatient Education & Compliance Patients with multiple chronic diseases such as asthma, diabetes, hypertension, congestive heart failure, or high cholesterol“…to award grants for pharmacist-provided medication therapy management services for chronically-ill patients.”
Patients with high annual drug costs of over $3,000/year who take a min. of 8 Part D drugsMedicare Part D PBM’s specify requirements for reimbursement (i.e. $60 per 30-minute session)
Presented by pharmacist or “other qualified provider”
www.mirixa.comSlide49
Establishing the HHC Value for Outcomes = Patient Care CoordinatorCollect patient data
Educate patients (via disease & lifestyle management programs w/proven cost-savings)Demonstrate services are cost-effective
Demonstrate services lead to better patient outcomes
Document a reduced number of patient hospital readmissions and ER visits
Charge per patient/disease state/mo
(i.e. $2/min.)Slide50
Primary HHC Disease Management Programs AsthmaCancer
Congestive Heart Failure COPD
Diabetes
High-risk Pregnancy
Hypertension
Obesity
Sleep ApneaSlide51
5 Lifestyle Changes = 80% Reduction in Risk of Developing Type 2 Diabetes*Maintain healthy dietExercise regularly
No smoking for at least 10 yearsModerate alcohol
consumption
Maintain normal body
weight
(i.e. BMI 18.5-24.9)*NIH-AARP study 2012Slide52
Two HHC Options for Patient Education ReimbursementMedicareAccountable Care Organizations (ACO’s)= Health SystemsIndependents can contract with even if only 1 locationBecome Patient Care Coordinators for
Hospital at Home programsPaid for EducationShare in Risk (70%-80%)
3
rd
Party Payers
Different by RegionNeed Multiple Locations (= Coverage)
Chain or join/create a Network of IndependentsJoin Medical Home teamPaid for Education
Share in Risk
(20%-30%)Slide53
Medicare’s Hospital at HomeCare Team: Physician, HC Nurse, Rx, & HMEMonitor vital signsMonitor medicationsManage painDress wounds to avoid bed sores and infectionsConduct diagnostic tests to track recovery & monitor symptomsImprove lifestyle via management programsAssess home for safety and any HME neededCare for the caregiver to avoid burn-outSlide54
The Medical Home Model (3rd Party)Care Team: Physician, HC Nurse, Rx, & HMELivingWell@Home (The Good Samaritan Society):Telehealth (Blood Glucose, Blood Pressure, Pulse Oximeter, Weight, ECG recorder)
In-home Sensors (Motion, Temperature, Water Usage, Smoke)Personal Emergency Response Systems (PERS)
Cost: $6,000/person/year (= 1 mo./LTC)
Goals:
To reduce high risk for re-hospitalization with patients discharged back home after hospital stay.
Outcomes:
Reduce healthcare costsReduce utilization of healthcare servicesFacilitate better outcomes for quality of life and personal satisfaction
Support aging in home by delaying transfers to LTC’s