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Eight Ways DME Companies Can Thrive in Tough Times

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Eight Ways DME Companies Can Thrive in Tough Times

DME Companies Thrive
How DME Companies can thrive in tough times?


Several years ago, durable medical equipment competitive bidding was instituted by Medicare and the impact has been dramatic. Competitive bidding was so disruptive to the healthcare market that over 40 percent of DMEs are no longer in existence. Many smaller DMEs that could not successfully compete sold their assets, restructured their business, or simply closed their doors, with the owners moving on to new pursuits.

While these 40 percent of DMEs were in denial or frozen like a deer in headlights, other DMEs companies saw this market disrupted for what it was an opportunity to be exploited with growth and increased profitability.

In our national DME merger and acquisition practice, we’ve seen a number of success stories of companies that have both survived and thrived in this increasingly competitive environment. Here’s what they did:

1. They ruthlessly assessed the healthcare marketplace.

Successful DME entrepreneurs realized quickly that healthcare is now being shaped by economics, managed care, rapid innovation, strongly stated customer preferences, digital marketing, and new direct access to DME products. They then made a commitment to adapt to these changes rather than pretend they weren’t taking place.

2. They partnered with investors and capital.

Successful DME entrepreneurs scrapped the traditional “go it alone” strategy in favor of a new affiliation model, where competitors actively partner with one another in selected areas. They also brought in new investors, especially private equity groups that had abundant financial resources and saw an opportunity for disruptive innovation.

3. They adopted a millennial perspective.

Rather than the lethargic approach characteristic of many DME operators from the Baby Boomer generation, successful DME entrepreneurs have acted with a sense of urgency and agility that’s characteristic of high-tech firms, where most of the key employees are from the millennial generation.

4. They sharpened their strategic clarity.

Traditional DME companies often had a general sense of their strategic goals rather than a precise understanding of what would be necessary to succeed in a changed and changing marketplace. The most successful DME entrepreneurs set aside their historic biases, systematically assessed their risk/benefits, identified the resources necessary to succeed, and then aligned those resources strategically prior to taking action.

5. They focused on precise execution.

In the past, DME companies often had good, but general plans for the future. However, few were able or willing to execute those plans with precision. The DME companies that thrived acted with conviction, evaluated their results, and made course corrections in order to keep on growing and diversifying. They were and are ambitious, in the best sense of that word.

6. They targeted their offerings.

Traditional DME companies tended to offer a full line of products, regardless of whether those products were profitable or in high demand. By contrast, today’s progressive DME companies tend to “drill down to core offerings,” all the while paying attention to cross-selling opportunities. This allows them to quickly eliminate under performing products, thereby increasing profitability.

7. They’ve learned to learn quickly.

In order to take the actions described above, successful DME companies have learning quickly from their mistakes and successes alike, incorporating those lessons into new offerings and new initiatives. Mostly, they’ve learned that the DME market is shifting, like the rest of the healthcare industry, to a value-based, outcome measured model.

8. They’ve become fanatical about measurement.

Funding entities and payers, whether public institutions, managed care organizations, commercial insurance, or even consumers who pay cash, want to know about observable outcomes and value in terms of their healthcare. Healthcare companies that can’t deliver these outcomes and value or can’t communicate them effectively simply can’t compete in this rapidly changing market.


The disruptive approaches have helped DME companies survive and thrive despite the monumental changes in the industry. They also offer lessons learned that can guide you now and in years to come. Further changes are inevitable so keeping an agile perspective on the future will serve you and your DME well.

If you would like to know more about this article, you can reach us directly at support@wonderws.com

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