Invacare 2011 Annual Report Download - page 4

spite of government spending slowness. The Company is committed to its goal of delivering $100 million in
annualized savings by 2015, which in part will be invested in increased research and development spending and
other initiatives. However, some of this progress may not be achieved as quickly as originally planned, as the
Company is diverting some internal resources, such as engineering, to accelerate its regulatory compliance
improvement programs.
In 2011, the Company introduced the first new product platforms that stem from its globalization program,
including the new Invacare®Top End®Reveal™ Active wheelchair, the Invacare®Matrx®MX1 cushion, the
Invacare®Glissando™ Mattress, the Invacare®Rio™ Bath Lift and the Invacare®Etude™ Plus bed. The
Company also started to launch standardized major sub-components. For example, the Company expanded its
use of the new Single Stage Drive (SSD) motor gearbox across the majority of its power wheelchair lines in the
fourth quarter. This standardization of motor sub-components for the Company’s power wheelchair platforms
around the globe reduces complexity from 96 unique pairings of motors to less than 10. This will significantly
reduce cost and complexity in the Company’s supply chain.
Also in 2011, the Company announced the closure of two facilities in connection with its globalization
program. With the closures completed, annualized savings are expected to be approximately $3.5 million.
New opportunities
Invacare continues to look for new opportunities to expand its product and service offerings across the
continuum of care. In the third quarter of 2011, the Company completed the acquisition of Dynamic Medical
Systems (DMS), a solutions-based service organization. With an established presence in the western United
States that complements Invacare’s existing service organization in the eastern United States, this acquisition
gives Invacare a national rental footprint, which strategically enhances its ability to service regional and national
long-term care providers. DMS also significantly expands Invacare’s clinical solutions selling approach for
wound therapies, safe patient handling and other rental applications in institutional settings. These offerings will
enhance the Company’s ability to serve the needs of its long-term care providers whether they opt to purchase or
rent capital equipment as market dynamics continue to change.
The Company also acquired the technology and assets of a negative pressure wound therapy system
currently in development. This line of products fits well within Invacare’s clinical solutions selling capabilities
and will add to its current offering of wound therapy solutions available through Invacare’s rental services to
long-term care providers. The Company anticipates that this area will be a growth platform in the future.
The Company continues to expand its relationships with its customers beyond offering new medical device
technology. In the United States, declining reimbursement, most notably related to National Competitive Bidding
(NCB), is forcing providers to drive efficiencies throughout their businesses. To help its customers address the
unique challenges posed by NCB, Invacare has united its broad range of resources and solutions in a
comprehensive marketing program. The Company offers guidance to providers so they can position themselves
for the future. The Company also continues to take a leadership position in Washington, DC, on behalf of its
providers. Currently the Company is rallying the industry to work with Congress to replace the onerous NCB
with a Market Pricing Program (MPP). MPP is a more sustainable pricing program for the HME industry where
only credible bidders can participate. For more information, visit www.invacare.com/ncb.
Integral part of the continuum of care
Providing products and solutions to serve the full continuum of care will continue to grow in importance as
the population ages and the role of healthcare changes. By 2030, the number of people in the United States over
65 is expected to exceed 70 million.1With the costs of healthcare continuing to increase in a currently
unsustainable healthcare system, it will become essential that people are given the right care, in the right place, at
1Landers SH. Bringing home the “medical home” for older adults. Cleveland Clinic Journal of Med Oct
2010;77(10): 661-675