In 2007, Target Medical, Inc., located in Memphis, Tenn., prepared to take on the DMEPOS Competitive Bidding Program by devising a two pronged attack. As in other major markets, Target Medical was being forced to “earn” Medicare business by submitting bids for product categories in the region, which at that time made up the majority of the company’s revenues. The first strategy was based on submitting winning bids and moving business forward with the unpredictable whims of CMS’ program. The second strategy, one Target Medical would use if it didn’t win CMS bids, would be to shift from selling durable medical equipment to selling medical supplies. Target Medical submitted bids in eight cities, but was disqualified from final consideration due to an alleged clerical error. Prepared to implement the second strategy, the company drastically reduced its reliance on the Medicare program and sought ways to diversify business.
Traditional DME Targeting Methods Like many DMEs, Target Medical is a small business with two locations and 35 employees. Until learning of Market Data, Target Medical utilized traditional sales methods, such as tracking current physicians and targeting physician specialties. But the company lacked the ability to identify key physician targets, quantify the potential opportunity, and create a sales strategy achievable by a limited sales force. Target Medical was first introduced to VGM Market Data partner, Health Market Science, at Medtrade Fall 2013. “The claims data offered in the Health Market Science database for DME products was shocking. We had been looking for a way to transform our company from reaching out blindly, to focusing on referral sources that actually prescribe the products we sell. The HMS database was exactly what we needed,” said Brent Brockway, vice president of sales.
Utilizing claims data to target key referral sources and drive growth VGM and partner HMS worked with Target Medical to achieve its goal – targeting key physicians prescribing the largest volume of the company’s products. By focusing on key HCPCS codes billed by DMEs for incontinence products, Target Medical could now create a sales and marketing plan to target the key physicians in its coverage area and track success.
THE SCIENCE OF BETTER RESULTS VGM MARKET DATA CASE STUDY
• 2015 Proactive Business Planning and Access to Market Data Creates Competitive Advantage for HME Company “We had been looking for a way to transform our company from reaching out blindly, to focusing on referral sources that actually prescribe the products we sell. The HMS database was exactly what we needed.” Brent Brockway Target Medical, Inc.
• Need to adjust business strategy because of competitive bidding program
• Small business with limited sales team
• Lack of knowledge about what products referral sources prescribe
• Utilize claims data to target key referral sources
• Focus on key HCPCS codes billed by DMEs
• Target physicians prescribing key products by volume RESULT
• Received orders from 100 new referral sources
• $750,000 total revenue growth
• Including $150,000 in additional opportunities Leveraging VGM and HMS’ extensive experience in physician targeting, Target Medical received the precise physician and organization data proposed. Included were ranks for each physician and organization based on the volume of claims and prescriptions submitted by the physician or DME facility. “The ability to sort by volume and hone in on physicians and clinics with higher growth potential for their medical supplies is a revolutionary concept for DME,” commented Brockway. After receiving the data, Brockway devised a plan that would put him on the road for seven months, routing him to doctors located throughout the state of Tennessee and expanding to Arkansas and Mississippi. “It was so helpful to know how many prescriptions per month a doctor writes,” said Brockway. “I targeted products that have a similar delivery and increased our footprint significantly.”
The sales reps’ shoe-leather strategy to target and personally call on physicians they knew prescribed the products Target Medical sells increased sales dramatically. For every $1,000 invested in VGM Market Data, Target Medical’s sales reps grew the business by $100,000, for a total of $750,000. Within seven months, the sales team was able to: • Receive orders from 100 new physician and caseworker referral sources • Generate a huge return on investment • Generate an additional $150,000 in opportunities Target Medical, Inc. will use the new targeting list for future strategy development and strong potential growth. With physician- and organization-level data, Target Medical, Inc. is positioned to benefit from a significant competitive advantage, making Market Data a sound investment for this VGM Member.