Sooner Mobility’s Choate: ‘I Fired Medicare’

TULSA, Okla. — While many HME owners are dipping their toes into the retail waters as an add-on to their current Medicare-Medicaid business, it's not the only way to go. Gerald Choate, owner of Sooner Mobility & Rental in Tulsa, Okla., dove in headfirst.

About two years ago, Choate, unsettled by both the then-present and looming changes to Medicare and Medicaid and the rapidly declining reimbursement levels, decided to bail out of the government programs altogether and expand his retail arm.

"I fired Medicare," Choate said.

The move, he added, "has worked out relatively well." And that's been during a tanking economy.

"Credit card sales have really gone through the roof, whereas cash and checks dropped proportionately. I will take that 4 percent reduction [in credit card fees] compared to that 25 percent reduction in Medicare reimbursement," Choate said.

It did take some doing to swerve completely to a non-Medicare, even non-insurance arena. Sooner Mobility already had a partial retail business alongside its Medicare and managed care segments, and the company was located in a busy shopping center so location was not an issue. But Choate did have to commit more space to retail; he now has a showroom of 2,800 square feet. He also had to boost — significantly — his stock of scooters, lift chairs, accessory items and rollators.

"By the time you get all your product lines and everything stocked, I can't imagine getting by with less than 2,000 square feet," he said.

Choate got his stock out of the boxes and onto the floor so people could see it in different colors, test it out and compare one product to another. "We started looking specifically for other retail products — cupholders for scooters, backpacks, cushions," he said.

He knew that a retail customer, unlike a Medicare beneficiary, would not be likely to wait for him to order a product, and he did not want people to leave his store because he didn't have an item.

"When people are retail shopping and have money and you don't have the product, you're probably not going to get the sale," he said.

Unlike most HME providers, he has also made a significant investment in advertising. "We've done all kinds of advertising," Choate said, noting that while direct mail has worked well, "radio did not work for us at all.

"But really," he said, "there is no bad advertising.

One of the best things he's done is to take a booth at the Tulsa State Fair. "Basically, I set up an entire showroom there that is probably 1,600 square feet," Choate said.

"Wherever people are, you can sell home medical equipment," he said. "It's not just a necessity, it's a lifestyle product. You are running a retail business. It has nothing to do with medicine. You are accessorizing for people."

As with any retail business there is some downside to retail HME, Choate said, such as the economy, competition from the Walmarts and Walgreens of the world and even bad weather, which can keep people from shopping. Even with the drawbacks, however, Choate believes that for his business, retail is the way to go.

"No one wants to be paid less and less for a product," he said. "Medicare headaches are bad and getting worse. I think those suppliers that are already treading on thin ice, once they get hit with competitive bidding and their reimbursements are cut 20 to 30 percent more, will they be able to survive?"

"If you are retail-based," he said, "you are somewhat in control of your destiny."

For more on Gerald Choate's Sooner Mobility, see "Life without Medicare" in HomeCare's June issue.