Invacare 2008 Annual Report Download - page 11

Distribution Channels. The changing home health care market continues to provide new ways of
reaching the end user. The distribution network for products has expanded to include not only specialized
home health care providers and extended care facilities but retail drug stores, surgical supply houses, rental,
hospital and HMO-based stores, home health agencies, mass merchandisers, direct sales and the Internet.
Europe/Asia/Pacific Market
The company believes that, while many of the market factors influencing demand in the U.S. are also
present in Europe and Asia/Pacific—aging of the population, technological trends and society’s acceptance of
people with disabilities—each of the markets of Europe and in Asia/Pacific have distinctive characteristics. The
health care industry is more heavily socialized and, therefore, is more influenced by government regulation and
fiscal policy. Variations in product specifications, regulatory approval processes, distribution requirements and
reimbursement policies require the company to tailor its approach. Management believes that as the European
markets become more homogenous and the company continues to refine its distribution channels, the company
can more effectively penetrate these markets. Likewise, the company expects to increase its sales in the highly
fragmented Australian, New Zealand and Asian markets.
The company is directly affected by government regulation and reimbursement policies in virtually every
country in which the company operates. In the United States, the growth of health care costs has increased at
rates in excess of the rate of inflation and as a percentage of GDP for several decades. A number of efforts to
control the federal deficit have impacted reimbursement levels for government sponsored health care programs,
and private insurance companies and state Medicaid programs peg their reimbursement levels to Medicare.
Similar efforts are being undertaken in other countries, including for example, Germany. Reimbursement
guidelines in the home health care industry have a substantial impact on the nature and type of equipment an
end-user can obtain and, thus, affect the product mix, pricing and payment patterns of our customers who are
medical equipment providers. The company believes its strong market position and technical expertise will allow
it to respond to ongoing regulatory changes. However, the issues described above will likely continue to have
significant impacts on the pricing of the company’s products.
GEOGRAPHICAL SEGMENTS AND PRODUCT CATEGORIES
North America
North America includes: North America/Home Medical Equipment (NA/HME), Invacare Supply Group
(ISG) and Institutional Products Group (IPG).
North America/HME
This segment includes: Rehab, Standard and Respiratory product lines as discussed below.
REHAB PRODUCTS
Power Wheelchairs. Invacare manufactures a complete line of power wheelchairs for individuals who
require independent powered mobility. The range includes products that can be significantly customized to
meet an individual’s specific needs, as well as products that are inherently versatile and meet a broad range
of individual requirements. Power wheelchair lines are marketed under the Invacare®TDX®brand names
and include a full range of powered mobility products. The TDX®line of power wheelchairs offer an
unprecedented combination of power, stability and maneuverability. The Pronto®Series Power Wheelchairs
with SureStep™feature center-wheel drive performance for exceptional maneuverability and intuitive
driving. Power tilt and recline systems are offered as well.
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