Source: Medcity interview by Mary Vanac

She asked Mixon:

Q. What do you think about the proposal for a government-backed health insurance plan?
A. I believe in the free market. But I think there are people who … aren’t faring well under capitalism. I think Americans feel that no one should be left out.

Q. How might a government health-care plan affect Invacare?
A. Invacare does business in 80 countries. Canada and England are government-run health care systems. We do very, very well well in those countries. And the home-care reimbursement [there] in many cases is better than they have in America.

So do other homecare companies - it’s hard to argue with the above, except to add that most European countries actively support their citizens and their health, be it at home or otherwise. They also have competitive bidding programs similar to the US proposal (for example Germany) but the governments ensure a basic fundamental right to healthcare for all their citizens - no matter what - it’s the law.

Kinda neat?

Press release:

ELYRIA, Ohio–(BUSINESS WIRE)–Invacare Corporation (NYSE: IVC) has been named to FORTUNE Magazine’s 2009 FORTUNE 1000, ranking 983. The FORTUNE 1000 list is an annual ranking of America’s 1000 largest corporations based on revenue.
[Read more →]

Invacare Dedicates Site To Paralympics.

The story and the argument is not particularly new. What is somewhat new is the direct and stern criticism leveled directly at certain companies that the New York Times allege directly benefit from this delay. They name Invacare, Pride, Praxair and the Scooter Store and criticize Invacare’s Cara Bachenheimer who they allege does not want to see any substantive changes to the current system.

At the hub of the issue is the fact that consumers can purchase (according to the Times) – for example – a walker on the internet for about half the price of what national insurer Medicare (and therefore (directly / indirectly) the tax payer) pays.

It is true that in several cases the internet price of products is less expensive than the Medicare price. It is also true that the internet does not particularly serve well 90 year olds with Alzheimer’s or other incapacitating conditions who have no idea how to use the internet.

Unfortunately there have been documented cases of Medicare issues which have not helped the industry. Although it has changed somewhat, the industry has also not been able to get its act together in terms of a plan that makes sense to all. This continues today in some cases for example with the Scooter Store recommending that even higher specified products should be part of the competitive bidding process. Much to the chagrin of several industry stalwarts.

Adversity has made for strange bed fellows and time will tell if the new industry initiative will prove effective.

(In an unrelated event, Dan Meuser, President of Pride and former Republican candidate, will be hosting a Sen. John McCain lunch on July 23).

Update:

New York Times Opinion piece continues the onslaught “Medicare Savings vs The Lobbyists” - perhaps in part referring to the disclosure of a major homecare company spending $230,000 on lobbying in Q1.

If you would like to see our related post referring to the Office of the Inspector General and their report it is here - Pricing vs Reimbursement In The Homecare Industry - And The Competitive Bidding Solution

And a quick rebuttal from AAHomecare which actually is a little challenged in terms of winning this fight. You decide.

Robert K. Gudbranson has been appointed to the position of senior vice president and chief financial officer. He rejoins Invacare after a stint at Lincoln Electric. He formally held the positions of Investor relations, business development director as well as being based in Europe where he was CFO.

Press Release

It’s also about Asian sourcing, low barriers to product development and market entry - and who takes what and how much in the value chain.

Invacare has just announced (HME News) that they will no longer sell powerchairs to the Scooter Store. This follows last weeks announcement from the Scooterstore recommending that higher end rehab power chairs be included in the the (divisive - according to the majority of the industry) - national competitive bidding process (pdf download).

While the reason for the split from the Invacare perspective is related to their commitment to individual independent homecare dealers this is symptomatic of a much bigger issue.

What are the key factors…

The power wheelchair manufacturers (and others) have seen dramatic cuts in Medicare reimbursement in this category. Furthermore the new competitive bidding process is also sure to have a negative impact on margins. It also pits traditional manufacturers against the dealer distribution channel as to who and how will both parties participate in this new (coming -already here) environment.

In fact, everything that the major payers (reimbursement agencies, governments and de facto “consumers”) desire.

In order to deal with prices that continue to fall, the major manufacturers, started a few years ago, outsourcing heavily to Asia - as other industries have done when confronted with cost issues (or to increase their margins).

The issue for the manufacturers however is that they outsourced products with little or no intellectual property attached to them - only manufacturing know how. As one would expect, now that Asia has learned (with the help of the manufacturing industry) how to make rehab products - these same Asian companies are doing two things:

• Firstly they are establishing their own operations in the US and other markets. Some examples being Shoprider and Merits. Of course what these Asian companies have is products largely developed with the help of the US domestic manufacturers over the years - but what they still don’t have a great deal of is dealer and direct consumer customers.
• Still no big surprise - except that these (and several others) not only supply the traditional manufacturers with power chairs and other products, now have their own US direct operations, but they also supply national and / or large distributors with product, competing with the self same traditional manufacturers that essentially put them in business.

What’s next.

The competitive bidding process and the lines between manufacturer, importer, distributor and dealer are going to become increasingly blurred.

Companies like The Scooter Store, essentially breaking conventional ranks is a sign of things to came, not only in the US but also in other big rehab markets, like Germany - in fact its already started.

So, unless rehab “manufacturing” companies have IPOD (r) type patents and distributors of enhanced OEM rehab products have lifetime guaranteed customers - be ready for rapid change.

Or better yet be the change maker - and prosper.

Update January 28, 2007: Doug Harrison from the Scooter Store getting more isolated - maybe not. Lou Slangen from Invacare notes

“This is the most defining moment we’ve had in our industry on rehab products”.

Invacare and Scooter Store Heat Up Rhetoric - hmetoday

As a brief follow - up to the post on this subject this week, we can now confirm that Invacare, Meyra and Handicare will not be attending this years Rehacare.

This is the first time in the history of this show that Invacare and Meyra have not attended.

No doubt the empty space will be used by others - most notably Asia manufacturers.

The reshaping of the industry continues…