Pharmacy owners get a skewed view or home health care profitability. Home health care departments live and die on Medicare sales. Medicare pays for around 65% of hhc products. Typical Medicare reimbursed products that a pharmacy provides are not well reimbursed. Diabetes supplies can be quite profitable, but most pharmacies only get about 20% margins. Nebulizer drugs, ostomy, and wound care are even lower.
Diabetes, if optimized, will be a 35-50% margin category for your store, but the real potential for high profit sales is durable medical equipment, braces, respiratory and some specialty sub-category products.
DME is the first step to take to increase high margin sales. You can start with canes and walkers and advance, if you want, to wheelchairs, beds and power. Take a look at the 2009 Medicare fee schedule on a few common DME items and typical costs for those products from pharmacy wholesalers. Medicare reimbursements vary by state so If you would like to check exact reimbursements, I would be happy to send you the fee schedule, and you can check your cost on the products from your wholesaler. The costs quoted are not for cheap off-brand products that informed referral sources won't accept and that may cause service problems. They are for high quality, brand name products that will give excellent service.
Product Meidcare Reimbursement Range Typical Cost
walker with Wheels $92.49-108.81 $35.00
nebulizer 119.63-140.74 25.00
standard wheelchair 511.88-587.27 150.00
lightweight wheelchair 839.58-987.74 350.00
semi electric hospital bed 1055.25-1241.52 450.00
Reimbursements for DME average over 60% and your department should average 50% or more depending on product mix. The store I worked for averaged 55% accross the board for home health care sales. It doesn't take huge sales volume to make a very significant impact on your bottom line.
