This article is from in the December 2007 issue of DOTmed Business News. A list of registered users that provide sales & service can be found at the end.

It is easy to predict that the overall aging of the population and graying of the baby boomers will bring prosperity to companies that specialize in mobility aids. By 2030, a projected 57.8 million baby boomers will be aged 66 to 84, according to the U.S. Census.

However, other mega trends serve to temper this promising sector somewhat including regulatory pressures to cut healthcare costs, which tighten Medicare reimbursement requirements. The highly competitive industry has also experienced consolidation of firms into fewer but more dominant OEMs. Another factor at play is Asian manufacturing, which drives prices down and can be viewed as both a cause and effect of prevailing market forces. So while profits may not be boosted in proportion to market growth, the age and mobility demands of the U.S. population make wheelchairs, scooters, walkers and mobility aids a growth industry.

"Fifty years ago, nobody dreamed of the type of lifestyle products that are available today," said Reuven Kohn, President, All Time Medical, Monsey, NY. "Baby boomers are a group of smart shoppers that are growing older and will live longer and expect to have mobility aids that really make their life easier and not confining."

Kohn's company is an independent service provider (ISO) that doesn't manufacture the equipment but rather drop ships it to customers including hospitals, clinics and private individuals. Drop shipping from the manufacturer cuts costs since the shipper has no inventory-related overhead. Because manufacturers have dozens of warehouses around the country, delivery is fast and efficient. The ISOs can also offer hospitals, imaging centers, nursing homes, and other providers a choice of products from several manufacturers.




The leading OEMs in this equipment are Invacare, Medline, Sunrise Medical, Graham-Field Health Products, Everest & Jennings, Drive Medical, Pride Mobility Products and many others. Invacare enjoys one of the largest market shares in wheelchairs, walkers and scooters by selling to distributors and nursing homes.

"There is tremendous price pressure in this industry because of legislators trying to control costs," said Mark Sullivan, Vice President of the rehab category for Invacare, which is headquartered near Cleveland, OH. "It's no different for hospitals and nursing homes, everybody is trying to contain healthcare costs. Pricing pressures keep the number of [OEM] competitors down."


Cupholders and Food Trays

The wheelchair and scooter market was estimated at $3.2 billion in 2005 and is expected to top $7 billion by 2012 according to Research and Markets. The Freedonia Group reported that the mobility market for this equipment breaks down into 27% rehabilitative care, 25% leisure and recreational, 21% home health care, 12% medical institutions, and 15% industrial and commercial.

The variety of mobility equipment now available is astonishing, including a wide array of features for each type of device. Product categories include walkers, standard wheelchairs, rollators (which are walkers with wheels), power chairs, scooters, and a number of hybrids. For example, a knee walker is like a rollator but supports one leg, for instance pre-operatively for joint replacement surgery. Rollators and walkers come with helpful accessories like cupholders and food trays. Other features on wheelchairs and scooters include crutch, cane, or walker holders; seat belts, oxygen tank holders, even rear view mirrors.

The motorized wheelchair, which typically runs on two, 12-volt batteries, is controlled with a joystick. This is more common in health care settings than scooters, which are used more recreationally. In fact, power chairs may be gaining ground across market segments.

"Primarily in the geriatric market...a lot of people are winding up in the power chairs versus scooters because the power chairs are center-wheel drive and more maneuverable in the home," Sullivan observed. "The scooter market has gravitated toward smaller, lightweight, more portable scooters to go to the mall. But as far as mobility on a daily basis, they often go in power chairs versus scooters."

The prices for mobility equipment range from $500 for a standard wheelchair up to $5,000 for a geriatric power chair, to $25,000 for a chair for those with spinal cord injuries. Scooters typically retail in the $1,200 to $2,000 range. Walkers are around $100.

Designed for Patients and Staff

A big trend affecting the segment is obesity. Hospitals must increasingly take the needs of the bariatric population into account. It was once commonplace for hospitals to purchase wheelchairs that are 18 inches wide. Today, the standard is 20 or even 22 inches since providers fear that patients will literally outgrow their equipment investment.

As important as serving these patients is, an even greater consideration is the impact on the nurses and staff. Fortunately, several new design approaches are entering the market to address the problem.

"Patients are getting larger and caregivers, principally the nurses are getting older. We are trying to address their needs as well by bringing products to market that make it easier for the caregivers to push the wheelchairs," said Rich Derks, Vice President of Marketing for the Durable Medical Equipment division at Medline. The company produces and distributes several hundred thousand standard wheelchairs (non-powered) each year worldwide.

The new design approaches involve lightening up the chair by using different alloys. Reducing friction for easier rolling is also a priority. Medline is exploring new frame and wheel designs using computer-aided engineering and materials used in high-tech bicycle manufacturing. The company's Freedom chair is one of the lightest on the market at 14 pounds.

Wheelchair attachments such as a push bar can give staff more leverage and improve ergonomics. (A related retrofit is to add an anti-theft bar that prevents chairs from folding so they're hard to steal, since theft is a big problem in hospitals.) Medline has also added hand brakes to some models. All of this innovation does add cost to the equipment, but typically hospitals, imaging centers and nursing homes buy based on quality as well as price.

"Hospitals look at wheelchairs as something important to take care of, but they don't want to revisit it every year. They want chairs that are going to last," Derks said.

Servicing wheelchairs is not easy and parts from overseas are difficult to get, so it's understandable that providers are willing to invest in quality equipment as long as the value is good. As providers and purchasing organizations try to cut costs, the smaller medical equipment distributors feel the squeeze.

"There's a move by the hospitals to deal directly with the manufacturer to reduce their costs. They are starting to compete with mom and pop durable medical equipment companies," said Steven Tabor, Vice President of Sales at 1st Senior Care, a web wholesaler in Tigard, Oregon. The company offers a truly unique product, made in Israel-a portable scooter that folds for easy storage in a car trunk. They also have a folding rollator, which folds side to side instead of front to back to go through narrow doorways.

Regulatory Matters

Regulatory issues are important influencers of sales in mobility equipment. Medicare reimburses for this equipment but the manufacturers must receive pre-certification for eligibility. And things are tightening. For instance, on the home healthcare side, a prescription for a power wheel chair now requires detailed face-to-face physician evaluation and documentation.

An important trend to watch is the government's move toward test market arrangements in which it pre-approves only selected equipment distributors or providers for Medicare reimbursement. The plan is in a trial now in 10 test markets, with bids expected to be awarded next year. The industry is lobbying to prevent this plan.

Another wrinkle on the legislative front surrounds government plans to use Internet pricing for power wheelchairs as the basis for setting reimbursement rates for Medicare. That's also being contested by the industry since prices online don't reflect the full costs of services and evaluations required to furnish power wheelchairs properly, including fitting and assembly.

The industry is staying tuned to what is happening in Washington over the next several months.

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DOTmed Registered Wheelchairs, Walkers and Scooters Sales and Service Companies
Names in boldface are Premium Listings.

Domestic
Cheryl Kirk, Hy-Tech Respiratory Equipment, AL
DOTmed Certified
Samir Dahdah, Doral Medical Equipment, FL
Anwar Syed, MDIC, MO
DOTmed Certified
Dave Ogren, OMED of Nevada, NV
Reuven Kohn, All Time Medical, NY
DOTmed Certified
Dave Hill, A to Z Medical, Inc., OR
DOTmed 100
Art Stanfield, A.L. Stanfield Associates, Inc., TN
George Girgis, Meena Medical Equipment, Inc., TX
DOTmed Certified/100

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