After three sluggish quarters, the country’s economy continues at a tortoise-like pace. Higher oil prices haven’t helped, impacting everything from distribution costs to food prices. With unemployment continuing to hover around 9 percent, O&P businesses are feeling the backlash. In an industry where costs are rising as reimbursement rates are declining, what’s an O&P practice to do to maintain its competitive edge?
Some might consider controlling fabrication services by taking them in-house. North Carolina-based Center for Orthotic and Prosthetic Care (COPC) takes this strategy one step further. The company has created a business model where central hub facilities located in New York, North Carolina, and Kentucky serve between one and seven satellite offices with in-house fabrication services. For example, its 3,400-square-foot Binghamton, New York, center is equipped with 1,800 dedicated square feet for O&P fabrication, serving patients on-site, in the Cooperstown satellite office, and any offices that result from the company’s planned expansion efforts within the state.
Why would COPC duplicate O&P fabrication services, and therefore expenses? COPC Chief Operating Officer David Sickles, CPO, CPed, explains that he believes quality of care includes the timeliness in which a practice can deliver the orthosis or prosthesis. Other companies may be able to provide similar, high-quality componentry and patient care, he explains, but when COPC can fit and modify O&P devices more efficiently, “It really gives you a competitive edge,” he says. “We’ll win [referral sources] every time.”
While a central fabrication operation may provide quick turnaround times, Sickles says he prefers the flexibility and control that owning his own fabrication department provides. “You can move things around easier…,” he says. “You can give preference to the Raleigh office today, [for example].”
COPC uses overnight pick-up and delivery services between its fabrication facility and satellite offices. If a patient needs a device even quicker than that, Sickles says that while it may seem inefficient, the technician may even personally deliver it to the satellite center. “There’s a hidden value to that,” he says.
Arise Orthotics & Prosthetics, Blaine, Minnesota, also provides in-house fabrication services. As a tenant in a 90,000-square-foot medical center, Arise O&P must be flexible in meeting the demands of fluctuating walk-in traffic-patients who are referred by orthopedics, physical therapy, vascular, spine, and pediatric specialists who share space in the medical center. Charles Kuffel, CPO, FAAOP, Arise O&P president and clinical director, says that while he may have ten scheduled patients in the appointment book, the practice may see three or four times that many on a typical physician clinic day. “The next day we may only have ten people scheduled, and that is who we see all day long.” As a result, he says, “Our practice has to be very fluid.”
By catering Arise O&P’s fabrication inventory to the O&P needs of the building’s physician clinics, carrying costs and storage demands are reduced. Kuffel explains that minimizing expenses results in savings to patients, a plus in a profession where there is much “uncertainty…from a reimbursement standpoint.” He adds, “If somebody does not have insurance, it does not mean they do not deserve care.” In-house fabrication operations afford the company the ability to provide cash invoicing, where staff can take a patient’s finances into consideration, Kuffel says.
“Flexibility and [fast service] are so key in growing a business,” Sickles says. “I feel to grow you’ve got to have that control yourself.”
Editor’s note: In next month’s issue of EDGE Direct, look for our online exclusive “The Value of Central Fabrication.”