Meeting the Changing Needs of Oxygen Patients
Consider today's new breed of oxygen patients: younger, more active and better informed than their predecessors. Many of these patients live lives that necessitate greater mobility, both from the standpoint of work demands and physician mandates. Accordingly, they benefit most from oxygen systems that are portable and lightweight, while retaining high degrees of reliability and capacity.
Traditional concentrators and cylinders were stationary systems weighing between 50-75 pounds. While viewed as dependable by patients and profitable by suppliers, they were not designed as mobile, or ambulatory, solutions. Recent innovations in concentrator technology have brought units to the marketplace that weigh up to 10 pounds and can run on battery power for one to two hours to produce about 2 liters of oxygen. Yet even these are positioned as bridge units for use between electrical outlets.
Through the power of the Internet, patients now have immediate access to information about options that exist beyond traditional concentrators and cylinders. One such option is that of liquid oxygen (liquid O2), a mainstay in the market for more than 40 years. Though liquid O2 initially gained popularity due to healthy reimbursement margins for suppliers, it eventually withered to a mere 30 percent market share once those reimbursements disappeared. Yet liquid O2 still retains a higher weight-to-range ratio than concentrators. Moreover, manufacturers continue to refine and improve products in areas of portability, performance and reliability, giving them distinct advantages over concentrators for patients.
Armed with greater knowledge about the advanced benefits of up-to-date liquid O2 systems, more patients view them as a means to greater liberation and are exploring channels through which they can obtain them.
Consequently, suppliers are faced with a fundamental decision: Do they respond to the changing needs of patients by providing liquid oxygen systems as alternatives to concentrators, or will they seek out patients who remain unaware of these alternatives and continue to provide concentrators?
Liquid O2 and Concentrators: Standard Definitions
Comparing liquid O2 and concentrators is somewhat of an apples-to-oranges exercise. However, distinct differences do exist. Concentrators, which produce oxygen and then store it in small aluminum cylindrical containers, were introduced in the mid 1970s as a dependable and profitable alternative to liquid O2. For dealers, concentrators and their accompanying cylinders were systems that represented the lowest cost and highest profit. For scores of patients, concentrators often proved to be the only option they thought was available to them.
Concentrator performance has always proven steady and reliable?a true worry-free solution.
Concentrator performance has always proven steady and reliable, a true worry-free solution. Aside from changing filters, patients simply plug them into a stationary outlet. However, the electricity used by concentrators to manufacture oxygen is roughly comparable to the cost of running a refrigerator. This translates into an additional monthly expense of between $25-$30. Moreover, the typical concentrator runs off a compressor, which is noisy and generates heat, both unwelcome effects for many patients. Concentrators generate lower oxygenation--about 93 percent oxygen--as compared to the 99+ percent oxygen supplied by liquid O2.
Liquid O2 systems store oxygen that is initially liquefied at an industrial site. The portability and long operating time of Liquid O2 systems provide patients with significantly greater mobility than concentrators. Liquid O2 portables are widely recognized as the easiest, lightest and most comfortable O2 modality for ambulatory patients. Liquid O2 offers additional benefits of no electricity consumption, near-silent operation, no back-up system requirements, a longer product life cycle than concentrators, and often, telemetry technology that increases efficiency and reduces dealer costs.
Still, Liquid O2 is a consumable gas; therefore it must be constantly replenished, usually on a two-week cycle for typical patients. The built-in costs associated with this can quickly add up for dealers. If a patient is highly ambulatory, dealers must meet their increased needs with a large volume of cylinders and conserving devices. On average, dealers pay about $35 for every delivery of liquid O2, whereas concentrators are reimbursed on a flat fee basis from Medicare. That is, dealers who sell concentrators aren't burdened with the added expense of deliveries.
The Future of Liquid O2 Systems
Ask any oxygen patient: It's not unit technology that ultimately matters to them, but rather, the product's weight, ease of use, reliability and ambulatory longevity. Luckily, system technology and innovation have brought about the introduction of liquid O2 units that meet their changing needs.
For example, new liquid O2 lines introduced by some manufacturers are designed specifically to maximize patient comfort, convenience and ambulation. One such unit, a 0.3-liter lightweight liquid oxygen portable, features a built-in electronic oxygen conserving device that delivers a set pulse volume of gas with each breath. This device extends the oxygen duration per setting, while allowing for the overall small size and lightweight of the unit. Other units are designed to enable patients to easily read LED meters and quickly perform fill operations themselves. Many of today's units are available with existing popular connectors, allowing full utilization of a patient's current liquid system inventory.
From a dealer standpoint, liquid O2 is traditionally viewed as the more expensive, and consequently less attractive, alternative. However, recent innovations in liquid O2 systems provide options for reducing distribution costs while ensuring patient satisfaction. Consider a few examples:
New cylinders now possess substantial liquid capacity and less overall weight than before. This allows dealers to stretch deliveries without asking delivery personnel to carry a heavier unit. Innovative handle systems also allow also for easy transport.
Technological advancements in oxygen delivery systems provide more consistent, faster and efficient reservoir fills that are more consistent, effective and faster than in years past. Additionally, low evaporation rates ideally suit these systems for rural distribution.
Leading manufacturers now offer powered stair climb hand trucks that optimize fast, safe liquid oxygen deliveries. Lightweight, ergonomic designs enhance driver productivity, while significantly lowering worker compensation issues. Some units come standard with heavy-duty nylon tie-down straps, as well as AC chargers.
The Benefits of Telemetry
The high cost of transportation continues to squeeze profit margins for dealers that distribute liquid oxygen, since dealers use fixed schedules or frequent visits to ensure that liquid reservoirs don't go empty. Whether a dealer seeks to expand or simply maximize profits from an established customer base, the efficiencies in delivery realized with updated telemetry systems can dramatically improve bottom line performance.
Modern telemetry systems afford dealers online access to the liquid levels of their patients' storage reservoirs via centralized reports, information management tools and integrated fleet routing/scheduling software. By enabling dealers to reduce the number of fills and associated transportation costs, they ultimately can operate more efficiently?saving time, materials and capital.
The Consequence of Innovation
Like never before, liquid O2 systems are finding their ways into mainstream society. They are being installed in collegiate environments, such as Normandale Community College in Bloomington, Minn. Liquid oxygen systems are beginning to appear in casinos, on cruise ships and even in airports such as Minneapolis/St. Paul International, which is planning for the future use of oxygen patients with upcoming installations.
Liquid oxygen systems of up to 10 liters are now available that fit in the back of cars or sport-utility vehicles, essentially providing patients with their own portable refill station and greatly increasing potential mobility.
The portability and long operating time of Liquid O2 systems provide patients with significantly greater mobility than concentrators..
Those patients that live highly ambulatory lives overwhelmingly utilize liquid O2 as a driver of their increased mobility and freedom. As more patients become aware of the potential for this freedom, demand for liquid O2 systems will almost certainly rise.
In response, some dealers will seek to stabilize and ensure their current profit levels by attracting new patients who remain unaware of liquid O2 systems, and then selling them concentrators. Others however, will opt to provide access to high-quality liquid O2 systems that complement their patients' lifestyles. These people will set a course for greater profitability and expansion, while helping patients realize the degree of mobility that best suits their particular needs.
This article originally appeared in the January 2005 issue of HME Business.