A Viable Area That No One In Workers Comp Discusses
A very viable area of the WC system has existed for over 3o years and will continue to exist in the future. I often do phone consultations for investment groups that are looking to invest in the Workers Comp “space.” Over the last few years, one area of medical treatment seems to be unaffected by any economic upturn or downturn in any of the markets or claim counts.
This much-overlooked area is durable medical equipment (DME). As I am a nationally based consultant, there may possibly be a state or locality where my following analysis does not apply overall. I try to cover as many jurisdictions as possible with an article.
DMEs have the advantages of:
- Incredibly high markup value from manufacturer to end consumer
- Offshore manufacturing where costs are much lower
- Rare application of a state fee schedule
- Almost impossible for an adjuster to deny if the treating Dr. recommends them
- A very few networks to keep competitive price pressures in check
- Locality is a large influence as shipping costs are prohibitive
There are very few providers that deal with DMEs only. The DMEs are usually a part of a network provider’s overall product offering. Standalone DME companies are taking on a large risk of just one product line. However, their ROI is amazing.
One of the possible upcoming competitive areas may be smaller-sized DMEs. Shipping a cane or other smaller items are not centered on being a local provider. This all depends on the prices of shipping and fuel.
2020 Update – More states started including durable medical equipment in their fee schedules. The medical fee schedules should not become a deterrent for DMEs. DMEs will be a viable area of workers comp for years to come. They are still a great future investment.
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