ORLANDO, Fla. – Industry consolidation and low reimbursement have created a large gap in the local DME landscape in Florida, and Gilgal Medical Supplies sees that as a “big opportunity,” says Tom Chacko, vice president and one of the company’s owners.
The company launched in 2020 amid the COVID-19 pandemic, opening its first store in St. Cloud in the location of a DME that was closing. Six months later, it opened a second location in Orlando in the location vacated by Colonial Medical Supplies, which was acquired by a larger company.
“The Florida population is growing – it’s the third largest state – and there’s a big shortage of retailers,” said Chacko. “(During COVID), everybody was closing, there were shortages of medical supplies and people were scrambling. We thought of starting small with gloves and masks. It was a tough start, then we scrambled to get all the (required) licenses.”
Gilgal, which also has locations in The Villages and Fort Myers, carries medical supplies, compression stockings, braces and scrubs, and DME like wheelchairs, hospital beds and rollators. Retail sales make up about 60% of its overall volume, with 25% of sales to tourists to Orlando.
One challenge the company has worked to overcome is the “Amazon effect,” Chacko said. While consumers got used to ordering online when COVID hit, there’s always a need for a brick-and-mortar presence.
“With something like braces or compression stockings, you might need the right measurements,” he said. “And we warranty all our products. People are losing money buying wheelchairs and scooters online when there’s no way to repair them. We sell our scooters starting at $1,600. Someone can buy online for $800 but it will break down in six months. Here, they have a local store they can go to fix it.”
Another challenge: Medicare Advantage plans and closed networks. While Gilgal contracts with several large plans, including Blue Cross Blue Shield and Cigna, it’s had a harder time contracting with giants like Humana and UnitedHealthcare, says Chacko.
“It’s a challenge for small companies like ours,” he said. “They close networks, which is such a disservice to beneficiaries, and the reimbursement is just so low. But there’s not many retail DME stores around so that is where we see a huge opportunity to grow our presence and hopefully change that. We would like to open at least 25 locations in Florida.”