DALLAS – John Skoro used to run multiple DME locations with more than 500 consignment closets. These days, Skoro is co-founder and CEO of Texas-based HME360, and he has advice for HME providers about the benefits of proper inventory management. Medtrade Monday sat down with Skoro, a multi-year panelist/speaker at Medtrade, to learn more about the technologies that can help—as well as a few nuggets of optimism for the future.
Medtrade Monday: What are practical lessons that you’ve learned in your many years as a DME owner and in your role as CEO of HME360?
Skoro: In our particular industry, a good half of your inventory is serialized. If you’re just doing an orthopedic practice, you don’t have that. But any kind of respiratory, or DME hospital beds, wheelchairs—they’re all serialized items. The ability to manage the serialization is really cumbersome. A simple way of helping you manage that better is getting that serial number and making your own barcode and putting it on the front of the item. We struggle all the time in moving that piece of equipment out of our locations, in the delivery vehicle, and being delivered. For the most part, people are manually entering them, which is super prone to errors.
By the time you get that serial number in the back, the billing person is trying to confirm it, and can’t confirm it because the serial number is not found—or worse, in the wrong location. A lot of times, they’re sweating down there and looking at where that serial number might be on this particular product—which is different from another product and another product. Just making that nice and bold and putting that on the front of the product, or in a very readable area of that product, is helpful. That will save a lot of errors and a lot of time. It’s really simple, but it pays big dividends. You’re going to cut out a lot of wasted labor spent chasing for that and also cut down on inaccuracies.
Medtrade Monday: When it’s done right, what are the benefits of proper inventory management?
Skoro: What we found in our business modeling, and with some of our early customers, is there is a five to 15 times return on your investment if you can pay enough attention to inventory. It’s obviously contingent upon lots of things, and how you operate. There’s a lot of unnecessary labor and touches that you have to go through to make your inventory accurate in some popular software systems. And because these systems are patient-centric, they were never really designed to be inventory systems. Warehouse management and inventory management have been around forever, and people do it really well in other industries.
Medtrade Monday: Why does the HME industry struggle?
Skoro: It’s that lack of cohesion between the patient-centric world and your typical warehouse or inventory management world. When you look at all the touches and you look at all the different things that had to go on to make that inventory correct, you’re spending labor from not just your warehouse guy, but your delivery technician, customer service person, and billing person all get involved in things that for the most part are unnecessary if you can manage them correctly. Other things can help with automation.
Medtrade Monday: What types of things can help?
Skoro: Radio Frequency Identification (RFID) is one mechanism to do that. That’s gaining lots of traction from the Walmarts and Targets who are mandating RFID as part of their goods being imported in. They must have RFID tags on them, and that presents opportunities for people to say, ‘Hey if it’s good for Walmart, can I use it in my system and what will it do for me?’ And if I can do things in the system automatically, wow, then my people don’t have to do that—and then everything becomes easy.
Medtrade Monday: What’s the process for ordering inventory?
Skoro: For the most part, people go out there with warehouse management and look at their inventory and then say, ‘Ok I need this, this, and this.’ And yet, a computer probably has all of that information somewhere. It’s just not easily extracted. If you can actually manage that inventory replenishment better, or let computers help you manage it, you’re going to capture probably one and a half times inventory back. That is something you could use to grow your business, to hire more people, or bring in new product lines. It’s all trapped in your inventory because somebody is not going through and managing that efficiently.
Medtrade Monday: What do people need to know about inventory management?
Skoro: Providers want to know; How is inventory management really going to help me? How long does it take to implement? What kind of people do I need to do this with? What kind of systems do I need? People don’t really have a good handle on how to manage their inventory because the systems today are not very good at it.
Medtrade Monday: Why aren’t these inventory topics top of mind?
Skoro: Providers focus on intake, reimbursement, and revenue cycle management. There is an unfamiliarity with how you extract value from inventory.
Medtrade Monday: You have been a panelist and/or speaker at Medtrade many times. Why do you think in-person trade shows are still important?
Skoro: You can sit on a Teams or Zoom call and you can gain value, but it is that interactive discussion, the ability to be inquisitive that you get at Medtrade. Not only to a peer, but you’re able to ask questions of experts. You’re able to ask questions about the product vendors who are selling products. That’s not so easy to actually do on a Zoom call. You can, but you’re reading body cues at in-person events that make it easier to have those conversations. And sometimes it’s not the conversations that you’re actively dialed into; it’s a nugget that comes from another conversation you might be around, or something you hear. And the next thing you know, you take that to another conversation and make connections. If you don’t put the time or effort into it, you’re never going to extract the value.
Innovation and technology is really fueling progress. If you’re not there to pay attention and understand what’s going on, you’re going to be left behind. The industry is not going to slow down. It continues to grow. You’ve got private equity coming in who can spend money to do things and apply technologies, whereas in the old days you didn’t. If you can’t at least understand what the Jones’ are doing, you’re never going to be able to compete. As technology evolves and the big companies find ways to compete in smaller markets in a cost effective way, where are you going to be?
Medtrade Monday: What is your level of optimism about the state of the HME industry?
Skoro: I actually came from telecommunications and technology. I got into this business in 2000 when the dot com thing imploded. One of the reasons I got into this space is that wow, look at healthcare, it is never going away. It’s always going to be a solid industry. And if you think about it, this particular segment is recession proof. We know people need to be at home, because it’s expensive to go to acute facilities.
So what better place to be at? It’s not always easy because it’s kind of a quirky business, but there’s no better place to be if you know what you’re doing and can capitalize on some technologies. Look at the private equity trying to get in here. They’re generally not dumb people. They see a long term play here. That bodes well that the industry is strong, growing, and not going away. Put the effort forth to continue to innovate and be involved. It’s a fantastic space, but you must apply yourself.
