Eight Ways DME Companies Can Thrive In Hard Times

Several years ago, DME competitive bidding was instituted by Medicare and the impact has been dramatic. Many smaller DME companies that could not successfully compete sold their assets, restructured their business, or simply closed their doors.

However, other companies saw an opportunity to be exploited. In my national DME merger and acquisition practice, I’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 entrepreneurs will realise quickly that healthcare is now being shaped by economics, managed care, rapid innovation, 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 adopted a millennial perspective.

Rather than the lethargic approach characteristic of many operators from the Baby Boomer generation, successful  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.

3. They partnered with investors and capital.

Successful entrepreneurs scrapped the traditional “go it alone” strategy in favour 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.

4. They sharpened their strategic clarity.

The 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 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 targeted their offerings.

Traditional 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 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.

6. 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 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.

7. They’ve become fanatical about measurement.

Funding entities and payers, whether public institutions, managed care organisations, 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.

8. They’ve learned to learn quickly.

Successful Durable Medical Equipment 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 market is shifting, like the rest of the healthcare industry, to a value-based, outcome measured model.

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