IMCO’s Jay Butler discusses the growth and importance of the Extended Care market.
By Graham Garrison
It seems like everyone in the med/surg industry has a different definition for Extended Care, said IMCO’s
Jay Butler. “From an IMCO perspective we define it as everything from ‘post acute’ – including HomeCare, DME, Hospice, LTC – to everything in between,” said Butler, who was recently named IMCO’s new Vice President of Extended Care. In essence, Butler’s role is to bring members and vendors, serving the EC markets, together to help drive incremental growth by working to pair them up based on the product, target audience, and competitive landscape.
Butlers comes to IMCO with 27 years’ experience at Nestle Health Science, most recently holding the position of Director of Distribution and Extended Care. In his previous role, Butler was very familiar with many of the IMCO members and their business. During his tenure he also gained a lot of experience with distribution, how companies within the space work, and how best to integrate into their organization. “This combination made my transition into IMCO a bit smoother,” he said. “Of course, with my knowledge being mostly with nutritional products, I had a lot to learn about other product categories and vendors. The vendors and members have been great, and very patient, in helping me get up to speed.”
In an interview with Repertoire, Butler shared several insights into the Extended Care market and the industry at large. The following were some takeaways:
An “explosion of demand” has created more concern with reimbursement
In Butler’s opinion, the area of most concern within Extended Care from a reimbursement perspective is homecare. This segment has seen an explosion of demand. At the same time, homecare has been impacted equally with rising costs in labor, freight, products, etc., with very little change in reimbursement. “This has created a perfect storm of issues for this segment that needs to be addressed,” he said. “Much work has gone into lobbying for relief that will hopefully result in increased reimbursement to ease the pressure. At this point, the sustainability of the category is difficult at best.”
Continued consolidation
Consolidation continues in the Extended Care channel, yet the challenges of lower LTC census and reimbursement in homecare continue. “This trend started well before the pandemic,” Butler said, “and I suspect it will continue as long as providers look for ways to escape the challenges all face with staffing costs and limitations, steadily rising product and freight costs, and reimbursement issues.”
Definitions are blurring
The pandemic definitely resulted in accelerating the blurring of lines between different care settings, Butler said. As patients were unable to enter LTC facilities and chose to stay home, the homecare setting exploded. At the same time, the acuity level of patients in the home and LTC setting was on the rise, resulting in services being provided in those settings that traditionally had been delivered in acute care and LTACs. “This presented an opportunity for our IMCO members to offer services and products outside the traditional core.”
Opportunity is out there
Along with all the challenges from the pandemic, opportunities arose for independent distributors. “As the national distributors suffered the same limits on product availability, and pulled back from many accounts and certain channels of the market to protect their base, IMCO Members were able to capitalize on the opportunity to fill the gaps for accounts frantically searching for needed products,” Butler said. “This opened the door for business in new accounts in all care settings.” The strength and nimbleness of the independent distributors was showcased as they worked feverishly to meet customer needs and clearly showed size does not necessarily mean better, he added.
Change hasn’t been all bad
Butler said since the pandemic began, IMCO Members have been able to expand into accounts and business segments in which they otherwise may not have had the opportunity. “This has resulted in expanding their market footprint in many instances.”
From a vendor perspective, the pandemic opened doors that may otherwise have not been open to them. “As vendors struggled to get product, those with supply were able to fill the needs and establish themselves in more IMCO Members,” he said. “At the same time, many were able to strengthen their positions as they worked to address Member needs and concerns. I would say the pressure of the pandemic allowed the cream to rise to the top.”
The pandemic brought IMCO new members, vendors, and product opportunities and innovations. The shortage of product in the market resulted in IMCO searching out new sources. “As you know, the number of pop-up companies offering PPE exploded, so we served our IMCO Members by screening out those who were questionable and providing guidance on the legitimate vendors who could meet the immediate demand while offering value in the post-pandemic environment as well,” Butler said. “As a result, our Members and vendors looked to IMCO as a valued resource partner. The stronger bonds resulting will carry forward for us all.”