Invacare 2012 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2012 Invacare annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

More importantly for the home medical equipment industry, the Centers for Medicaid and Medicare
Services announced the bid rates for the second round of National Competitive Bidding (NCB). On average, the
reimbursement rates for Invacare’s customers will be reduced by 45% in the 91 metropolitan statistical areas.
While the Company continues to believe that the bidding process behind NCB is flawed, the Company is
uniquely positioned as the largest and most diversified manufacturer in the industry to provide products and
services to help providers drive efficiencies within their businesses. Invacare will continue to explore ways to be
a part of the solution for its customers, including financing solutions and product offerings geared toward retail/
cash sales channels, while at the same time actively managing its credit risk associated with NCB.
Integral Part of the Solution to Healthcare Reform
Despite the challenges that Invacare faces, the underlying industry fundamentals continue to be compelling.
The aging of the population and growing prevalence of chronic illness will drive demand for medical devices in
the home and long-term care settings. In the United States, the Affordable Care Act (ACA) incorporates a
paradigm shift away from “fee for service” to a capitated model with an emphasis on outcomes. Its success will
require reduced lengths of stay and lower readmission rates. The ACA has multiple programs designed to
improve outcomes and lower costs, including the “medical homes” national pilot, more robust care transitions to
facilitate the effective use of post-acute care and the Medicare bundled payment initiative, to explore the most
effective way to migrate people to the lowest cost setting for their healthcare – the home.
Conclusion
As a management team and board of directors who collectively own approximately 15% of the stock, we are
aligned with our shareholders. We are determined to take the appropriate actions to position Invacare as an
integral part of the solution to healthcare reform. We are encouraged by the future of homecare, and all of the
improvements that the Company is making will make it an even stronger company. As we work to achieve and
demonstrate sustainable quality systems compliance to the FDA, we also look forward to continuing to innovate
and introduce the types of solutions that are Making Life’s Experiences Possible™for the millions of people who
use Invacare devices.
Thank you for your continued support of Invacare.
Sincerely,
Gerald B. Blouch A. Malachi Mixon, III
President and Chief Executive Officer Chairman of the Board