Moving the HME Industry Forward


Are You in Business or Are You in Healthcare?

July 25, 2016

STILLWATER, MN – My name is Jim Schafhauser, and 11 years ago, after nearly 30 years in the restaurant and automotive service industry, I joined Rose Schafhauser fulltime at Association Management LLC, managing and administering associations and councils in the HME/DME industry across the country. I, like Rose, am a business person.

Since I joined Rose back in 2005, I have consistently wondered, often aloud, how a business model where “normal” often includes being reimbursed less than a profitable amount for products and services can be sustainable. As a business person who has always had financial statement responsibility, it simply makes no sense.

But when I ask I am often told: “We need to take care of the patient” or “We need to take care of the beneficiary” or “The patient needs it to go home from the hospital” or “We are a healthcare provider – we have to take care of the patient.” Each of these responses to my question is a valid, noble, and worthy answer. It’s an answer often punctuated with a comment along the lines of: “You’re a business person. You don’t understand healthcare.”

Here is what I do understand. Every home medical equipment, supplies and services company owner or manager needs to answer this one question in today’s environment: “Are you in Business or are you in Healthcare.” Unfortunately, in today’s Medicare, Medicaid and Private Insurance reimbursement environment, you are being forced to choose.

To me, being in “healthcare” means that you will continue to supply products and services to individuals at reimbursement rates that guarantee a net income on your financial statements that are negative numbers which will ultimately result in you no longer being able to provide healthcare to anyone. It will mean that you will continue to do business as you have done in the past, and you will continue to look upon the people you provide products and services to as “patients” and “beneficiaries”.

On the other side will be those that choose to be in “business.” These will be the companies who continue to change the business model of providing home medical equipment, supplies and services in ways that will result in profitable businesses.

Enlarging retail opportunities, going non-assigned, moving away from product lines that do not generate profit or lead to other profitable opportunities, refusing contracts that are unsustainable, training telephone and on site staff in the art of selling, implementing efficient business practices that streamline/reduce staff, joining state associations, attending education and the list goes on. Being in “Business” will mean that you no longer serve patients and beneficiaries but that you will serve “Customers.”

It will be a difficult process and some will simply not be able to make the transition. It is unfortunate but the day of being a “healthcare” provider may well be over. However, for those of you who decide that you will be in “Business” I believe the future is extraordinarily bright! There are simply too many of us who currently need or will need the home medical equipment, supplies and services being provided by the businesses in our communities for us not to be successful.

So I ask you to consider: “Are you in “Business” or are you in “Healthcare?”

Jim Schafhauser is the vice president and co-owner of Association Management LLC located in Stillwater, Minnesota. Jim serves in an administrative role for the Midwest Association for Medical Equipment Services (MAMES), the Arizona Medical Equipment Suppliers Association (AZMESA), the Region A  Council, the Region B Council, the Region C Council, and the National Supplier Clearinghouse Advisory Committee.