Providers watch for changes at Drive DeVilbiss

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Friday, September 13, 2019

PORT WASHINGTON, N.Y. – HME providers say they’re keeping an eye on Drive DeVilbiss Healthcare, now that it has been reported the company is $600 million in debt.

“We do buy from them and rely on them, so it’s troubling,” said John Quinlan, president of the Northeast Medical Equipment Providers Association (NEMEP) and owner of Quinlan’s Pharmacy & Medical Supply in Wayland, N.Y.

The Wall Street Journal reported on Sept. 4 that Medical Depot, which operates Drive DeVilbiss, has begun restructuring talks with its senior lenders. The company has been owned by Clayton, Dubilier & Rice, a New York-based private equity firm, for the past three years.

Providers say the news isn’t impacting their buying decisions just yet.

“We buy quite a bit of stuff from Drive and we’ll continue to do so,” said Michael Kuller, owner of Allstar Medical Supply in Walnut Creek, Calif. “But we will be looking for alternatives in case we experience any issues.”

For one, providers say they’ll be watching whether or not the restructuring impacts pricing for Drive DeVilbiss products. The timing of the news was problematic, as it came only a few weeks before providers had to submit their bids for Round 2021.

“If Drive, for whatever reason, brings prices up, that wrecks my bidding spreadsheets,” said Chris Rice, CEO of Diamond Respiratory in Riverside, Calif.

Providers will also be monitoring product availability.

“I think providers are very concerned about the restructuring process, particularly if supply is disrupted or products are eliminated,” said Cathy Hamilton, chairwoman of the board of directors for the Home Medical Equipment and Services Association (HOMES) and a senior accountant with Acelleron in North Andover, Mass. “Drive is a very strong leader in the hospital bed/bent metal arena. Changes in product offerings have been occurring in the industry, and these changes have a direct impact.”

Some providers have already scaled back their business with Drive DeVilbiss, citing supply chain issues that have cropped up mostly in the past year.

“They’ve struggled to deliver products and provide parts for those products,” said Mark Nicotera, owner of AZ Mediquip in Scottsdale, Ariz. “It tells you something when our business is up year over year, but our business with them is down.”

Providers say they don’t like seeing one of the industry’s legacy manufacturers struggling.

“The market needs competition on the supply side, as well,” said Woody O’Neal, vice president of O2 Neal Medical in Pelham, Ala.