Using Retail to Balance the Bottom Line
September 2016 Issue
Many pedorthists have relied mainly on insurance reimbursements to drive their practices. A physician writes a prescription for whatever he or she deems medically necessary to meet a patient's needs and sends the patient to the pedorthist to have the prescription filled. Most of the time the individual has insurance to help cover some or all of the cost of the services. The pedorthist files the proper paperwork and receives compensation for the work. It is a time-tested model that has served countless pedorthists well for many years.
However, the medical and insurance landscapes are changing. Insurers are utilizing tougher standards to accept claims. One pharmacy near my practice recently stopped dispensing diabetic shoes because it felt the trouble it had to go through to get paid was not worth the time and effort.
Some of you are in the opposite position. Rather than competitors exiting the market, you are dealing with too much competition. Various orthopedic and prosthetic labs, podiatry groups, pharmacies, and fellow pedorthists are all in competition for the same patients. Multiple parties vying to get an edge in a limited market causes a strain on the bottom line as there are only so many patients to go around.
It is seldom a good idea to have all of your eggs in one basket. For example, several years ago Medicare began including diabetic test strips in its competitive bidding program. Numerous durable medical equipment suppliers who had a great deal of their businesses invested in the test strip market suddenly found themselves left out in the cold without a bid. The reimbursement rate decreased drastically for the suppliers who did not get a contract. Some even had to shut their doors. The blow to a major portion of their income was too much to overcome. The same scenario could be played out in a pedorthist's office if too much emphasis is given to any one portion of income generation.
This article offers several ways to generate retail income to help supplement your pedorthic practice.
Over-the-counter (OTC) shoes
Many people have foot problems but will never seek out a physician for care. These individuals are potential customers for good footwear to help alleviate their conditions. One woman I know has a hammertoe and suffers from pain due to the shear forces rubbing a sore on the dorsal surface of the toe. She has tried using pads and other devices to help stop the rubbing. What if she were to try extra depth shoes so her foot is placed further below the toe cap compared to regular shoes? Her insurance company would not offer any reimbursement on the shoes, but she might be willing to pay retail price for them to get some relief. If you have been selling diabetic shoes exclusively, don't forget that many of the vendors you currently contract with carry other lines that may fit your customers' needs. You may want to broaden your product line and the brands you carry to include shoes for which insurance will not pay but that will work well to help various conditions.
Some pedorthists do not look favorably on prefabricated inserts, wondering why anyone would want something made in a factory compared to something created specifically for his or her foot. But the reality is that a lot of these OTC inserts are high quality and can relieve a variety of symptoms. There is a physician in my town who suffers from plantar fasciitis. He was in my store one day and purchased a pair of OTC inserts. They helped his feet so much that he regularly sends patients to see me with instructions to provide them with the same type of inserts he bought. The fact that you can offer OTC inserts for a lesser price than custom inserts also makes them appealing to customers.
Custom inserts for people with conditions that are not billable to insurance
As we all know, there are people who could benefit from custom products but their insurance does not cover their particular ailments. Why not supply them as part of your retail business? Bear in mind that making a diagnosis is not in the scope of your practice. Even though insurance will not be involved, you still need to follow a physician's order before dispensing a custom-made product. Although some pedorthists don't see the necessity of getting a prescription for these items, without it, you take the risk of selling your patient something that may aggravate some other condition. As long as you cover all of your bases, there is no reason not to open your practice to the larger public. You will be helping even more people and boosting your sales at the same time.
For the most part, the days of the local shoe repair shop and the time-honored craft of the cobbler have gone away and left a void that the pedorthist can fill. There are any number of shoe modifications that people need for which their insurance will not pay. This presents you with another avenue for cash sales. I regularly get requests to elevate a shoe, lift a heel, add a cushion, etc. Since my facility does not have the proper equipment, I refer most of these requests to another practitioner. But many of you are already set up for this kind of work, and you are probably already doing some of these things for insurance sales. The demise of the shoe repair shop provides you the opportunity to perform a much needed service for your community and boost your sales at the same time.
OTC braces for minor issues
Canvas ankle braces, plantar fasciitis wraps, hammertoe cushions, heel cups, corn pads, etc. help round out the foot care retail plan. You might also consider selling various creams, powders, and sprays. Shoe care products such as laces, polish, and brushes are another possibility to add to your product line. All of these can be purchased inexpensively from the vendor of your choice and you can take a reasonable markup that will elevate your bottom line.
Remember, many people have foot pain. The majority of them have no idea where to go to seek relief other than to their local shoe store. Often the employees at these stores have little training in helping people alleviate pain. In fact, most of these stores are basically self-serve outlets that expect people to figure out their sizes and try to find shoes, inserts, and whatever else they may need on their own. Some people don't even know how to determine their correct shoe size, let alone figure out what else they may need. This opens up a vast market if you are willing to take the plunge into the retail arena.
For most of you, retail will never take the place of your insurance billable practice. But it is an area to which you should devote some energy. A moderate selection of items along with a little marketing on your part has the potential to reap good returns. During those times when payments are slow coming in due to audits, it's difficult to obtain the proper paperwork to file your claims, or you are faced with other delays, a good retail secondary income can keep your practice going and ensure you continue pursuing your passion of serving your patients.
Terry Reed, BOCPD, is a certified pedorthist working for Caldwell HME, Wynne, Arkansas. Reed is the only certified pedorthist in an eight-county area serving the Mississippi Delta region of that state. He can be reached at .