Ohio chain ramps up offering in home health care
MEDINA, Ohio — Discount Drug Mart is taking its “360 Care” positioning to another level with its home health care offering.
The chain is building on its 2014 acquisition of Hastings Professional Medical Equipment with an array of home health care products and services in its 73 stores as well as at Hastings’ two distribution centers.
“We’ve always had people come into stores for oxygen equipment or a hospital bed,” says Discount Drug Mart vice president of finance Mike Eby. “In the past we couldn’t serve them, but now we can.”
Stores may even carry such relatively hard-to-find items as continuous positive airway pressure (CPAP) machines. At the same time, Hastings’ warehouses in Cleveland and Canton, Ohio, offer home delivery of such products as stair climbers, with installation.
Bolstering Hastings’ business is Discount Drug Mart’s implementation of new software for it. The action helped drive durable medical equipment sales for the chain up by 8.7% last year.
A further boost for the business will be a marketing blitz centered on television commercials that launched last month. “We spent a year and a half getting ready to integrate Hastings and leverage our stores with its two sites,” Eby says. “Now all the planning is coming to fruition.”
One piece of the home health care market that Discount Drug Mart will be missing out on is Medicare contracts, but the chain has a bid in for the business in 2017.
In the meantime, the chain can get nontraditional Medicare business through private contractors and third parties. It can also get Medicaid contracts and commercial business. Hastings, notes Eby, is well-known in the field, especially in the western suburbs of Cleveland.
Reinforcing the chain’s commitment to home health care is its new logo, which merges the Discount Drug Mart and Hastings names.
Discount Drug Mart’s in-store pharmacy business contributed about 45% of the company’s overall sales last year, which was unchanged from 2014. Flu shots were up about 14%, outpacing the industry. The chain also provides shingles and pneumonia vaccinations.
But the retailer’s aggravation with maximum allowable cost (MAC) dictates and associated reimbursements hasn’t changed much, notes Eby.
On the positive side, over 40 stores are using the chain’s contact center, through which 90% of pharmacy calls are processed. “We’re very pleased with its progress,” says Eby, noting that the center is fostering medication therapy management by pharmacists.
Also, Discount Drug Mart’s three walk-in clinics in partnership with the MetroHealth hospital system are thriving. The retailer is talking to MetroHealth about adding clinics, says Eby, pointing out that the hospital system covers a three-county area where the chain has upwards of 20 stores.
Discount Drug Mart’s 55% contribution to sales from the front end is unusual for the chain drug industry, and it is supported by such unconventional categories as video rentals and delis. Not many retailers in any channel still rent DVDs, notes Eby, “but we are still doing it and still making money from it.”
Of the company’s 73 stores, more than 40 have delis, and all new units get the department. Helping lift deli sales are prepared sandwiches and salads (generally at the checkstand) for meals to go.
And two 40,000-square-foot stores have full meat departments with extensive offerings of other consumables. “We call them grocery stores,” Eby comments. “They’re two of our top-performers.”
The retailer’s newest store, in Sharon township in Medina County, between Akron and Medina, Ohio, has performed strongly since its October opening. The chain could debut another one or two units this year and will probably relocate another.