Page 12 - HME Business, September/October 2021

Annual Roundtable

7. UNILATERAL PRICING POLICIES
Retail sales have been the cornerstone strategy for helping providers deal with larger reimbursement and healthcare trends. Moreover, retail sales have become such a natural component of the HME industry that there are providers that are majority-retail or retail-only.
Poonawala’s a provider with
a proven retail track record.
For him, retail sits at the hub
of healthcare innovation and patients’ need to improve their health, remain independent and stay in control of their care.
But there’s a fundamental problem in retail HME that must be addressed, he warns: pricing policies. Currently, brick-and- mortar retail providers don’t have much protection with today’s vendor pricing policies, he contends.
Retail items have traditionally been priced by vendors using two different methods: manufacturer’s suggested retail price (MSRP) and minimum advertised price (MAP). MSRP represents the maximum a manufacturer wants an item to be priced. MAP represents the lowers price it wants to see an item priced.
Neither policy has done much to stem the trend of providers’ physical retail locations getting “showroomed.” That means a prospective buyer comes into the retail location, inspects the goods, ask staff questions, and then, instead of purchasing the item, leaves to find an online seller offering the same item for cheaper, Poonawala explains.
But a new pricing policy has developed in the retail world: unilateral pricing policy (UPP). UPP sets a hard-and-fast sales price the manufacturer sets for resellers. The price is the price.
“Why is a product permitted to be sold for cheaper online than in our retail store?” Poonawala asks “ The next iteration of the iPhone is the same price no matter where I buy it. I’m starting to move to brands where the price is the Apple concept.”
He’s calling on retail providers to tell their vendors to imple- ment UPP. In fact, he argues that even if a MAP might be favor- able, providers should still support vendors that offer UPP.
“If [vendors] start seeing that there are more providers publicly looking for UPP, and they’re the first ones to imple- ment it — even over more premium brands — I’m going to start buying that product,” he says.
8. DEVELOP CREATIVE BUSINESS NICHES
Regardless of all these trends, the overarching strategic priority for providers is to develop pathways to new business, and that means getting creative, according to Resnick. And if anything, providers still have
the best asset in town: their patients.
“Money follows the person,”
Resnick says, explaining that
providers have followed
referrals based on patients
needing prescriptions based
on traditional private insurance,
Medicare, or disability prescrip-
tions. What they haven’t done is pursue non-traditional sources of business such as the Veterans Administration. And that’s a missed opportunity, particularly in smaller markets where the VA is under-served. Providers’ excess inventory could become very profitable in such a scenario.
“It’s not easy getting a contract with the Federal govern- ment,” he says. “But once you get it? It’s stable revenue.”
Similarly, providers can also reach out to federal and state programs that provide special funding for patients in adult communities and residential group homes serving patients with disabilities and that might not have family support.
Also, get creative about driving retail engagement, he says.
“You’re only as good as the people who come into your store,” Resnick advises. ”Go into these assisted living centers, and speak with the physical therapy or recreation department. They all have vans, so have in-services on a variety of products, and they’ll bring in eight or 10 people.”
Faisal “RJ” Poonawala,
President of Spring Branch Medical Supply

Ron Resnick, President and owner of Blue Chip Medical Products
12 HMEBusiness | September/October 2021 | hme-business.com
Management Solutions | Technology | Products