Trends, Opportunities, and Challenges in 2022
on February 15, 2022
By Mike Mallaro, CEO, VGM Group, Inc
My DMEPOS forecast for 2022 is bullish. Despite the pandemic, supply chain disruption, inflation, the great resignation, and recalls, DME businesses have fared very well over the past couple years. I see organic growth in the 6% to 8% range across the industry for 2022. Growth should be overweight in the back half of the year as supply chain issues are worked through and pandemic issues subside (hopefully).
Below are the noteworthy trends I see creating opportunities and challenges in 2022.
A majority of Americans prefers to conduct their business in a contact-free manner. A subset of that majority strongly prefers contact-free. No, they don’t actually want to come to your showroom or your CPAP clinic. It’s not rocket science, folks. Just look around at grocery stores, meal delivery, and shopping malls. You’re not different. Our world has changed forever. You have to change too. Contact-free is customer preferred, and we need to respond. Luckily, contact-free fits many parts of our business pretty well.
2022 Action Item: Evaluate each contact point required by customers, and seek an alternative process to offer it as a contact-free interaction. That includes shipping items like CPAPs directly to patients’ homes. When doing this exercise, channel the old Arnold Palmer Invacare ads—Yes You Can!
Increasing Chatter of New Models
The dream of new models transforming healthcare has been alive for many years. New models do emerge, and certainly the pandemic ignited contact-free and home-centric models in healthcare. The next few years will bring emergence of alternative models that impact home-centric healthcare.
But a word of caution. The ACA became law in 2010 and with it the much-ballyhooed conversion to new models built around value-based reimbursement. More than a decade later, the portion of healthcare reimbursement dollars paid on value-based criteria is only about 5%. Change happens, but foundational change in healthcare always happens more slowly than one might think.
2022 Action Item: Be alert to emerging models where you could potentially add value, and seek to build relationships and connectivity to those.
The slow march toward more consumerism in healthcare continues in 2022. Many of the alternative models emerging are partially based on addressing the unfavorable customer experience that often exists today. Devising ways to improve your customer experience in the continuum in which you operate makes you a better organization—and it will increase your revenues, albeit more slowly than you’d like.
2022 Action Item: Map out the points of customer friction required to do business with you. Endeavor to eliminate 10% of the friction points and improve another 30% of them in 2022. Then re-imagine other ways to enhance the customer experience.
While this has been a risk area and pain point for several years, I anticipate an uptick this year. Cybercrime activity continues to rise, and providers are wise to shore up security around patient and payment data for which they are responsible.
Healthcare providers possess, directly or indirectly, loads of personal data on patients, and that data is valuable to hackers. DMEs get hacked and/or ransomed all the time. Over half of American businesses have been victims of extortion via cyberbreaches, with lost time being an even larger cost than the ransom paid.
An element of IT security that I think accelerates at a high rate in 2022 is the practice of third parties (think health payers or cyber-insurers) requiring you to complete security requirements questionnaires, and pass their requirements, as a condition of doing business. This activity was becoming more common in DME in 2019. The pandemic put much of it on hold. It comes roaring back in 2022.
Prepare to spend more time on these checklists. But more importantly, prepare to meet additional security requirements in order to reach a passing level—or risk losing contracts and cyber insurance policies.
2022 Action Item: Create an IT security risk assessment on your organization, including on third-party vendors with whom you rely for IT security and operations, along with a tangible plan for mitigation of elevated risks identified. You won’t need to be perfect to pass all the questionnaires, but you will be better off if you have a plan on how you’re getting to a satisfactory risk level. And it helps you prepare for what’s coming.
Utilization of Data
A wise Georgian once told me, “Mike, fish where the fish are.” Most of the time the answers are in the data, and we get to the answer much faster by casting our line there. Utilize data to find business (referrals) you’re missing, to understand fair pricing, to identify the snags with payers, to assess your CPAP program’s effectiveness, your employee engagement, and more.
2022 Action Item: Endeavor to be more data-driven in 2022 and you’ll be a better leader and have a higher performing organization.
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