Moving to Non-Delivery

If the oxygen end game is to get to a no- or low-delivery business model, providers are still trying to feel their way toward that goal. What are the key drivers for them to make that move, and how can they get there?

Ultimately providers will need to transition patients to devices such as portable oxygen concentrators, because patients will need them since they improve their health, says Ron Richard, CEO of oxygen equipment maker SeQual Technologies. “Clinically, patients do better, and you see a reduction in healthcare costs and recidivism in patients that stay more active,” he says, explaining that patients such as COPD sufferers need to increase and preserve levels of healthy activity in order to stave off co-morbidities that loom more likely as their condition progresses.

“They can offset that or stabilize that by getting some movement and mobility,” Richard says. “That increases circulation, it reduces pulmonary edema, some of the side issues related to congestive heart failure — all these things, if they are left unchecked, can land patients in the emergency room.”

Of course, there also are reasons closer to providers’ business operations for transitioning to non-delivery equipment, such as portable oxygen concentrators, says Robert Jacobson, vice president and general manager of the Medical Products Division of respiratory equipment maker AirSep Corp. Chief among them is reducing the delivery operations, staff and vehicles required to support patients, he says. This goes double when considering expanding service areas.

“New locations can avoid many of the high infrastructure costs associated with delivering and supporting contents-based portable gas and liquid oxygen systems,” he says. “Providers can greatly expand their patient base with relatively the same resources, as a greater number of POC patients can be supported with equal or even less staff, as compared to contents-based systems.”

Simply put, “You can’t control the economy or reimbursement rates, but you can control how many times you go out to see a patient,” SeQual’s Richard says.
Of course, this leaves providers at square one: how to start the transition. Roger MacClellan, who runs ASAP Home Oxygen (St. Petersburg, Fla.), which services more than 3,000 concentrators, suggests that perhaps a staged approach that prioritizes patients would work best. Essentially, the provider needs to identify which patients could benefit from a POC the most, while saving the provider a significant sum in reduced deliveries in the meantime.

“You really have to have a customer who is a remote, high-end user, who uses seven or 10 tanks a week. Then I think it could work,” he says
Another patient group to target for early transition could be those who do a decent amount of traveling, since POCs reduce the costs and logistical problems associated with traveling patients, Jacobson explains.

This can have an additional benefit in that it can serve another driver for transitioning patients to POCs: they want them. Patients see them as a way to improve and increase mobility and travel options, including unlimited ambulatory time, overnight travel and air travel with FAA-approved units, according to Jacobson.
“In addition to the patients, referral sources also welcome and highly value the ambulation and travel advantages that POCs provide,” he adds. “Other providers have acknowledged the merits of POCs, by greatly reducing their ambulatory costs by targeting and addressing their highly ambulatory patient base.”

This article originally appeared in the December 2008 issue of HME Business.

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