Senior Care Issue

Hurdles to Health

Oxygen providers and senior patients both face challenges they must vault.

Health HurdlesWhen it comes to respiratory care and services, no other patient group is as critical to HME providers’ success as senior citizens. Simply put: seniors make up the overwhelming majority of oxygen patients, and it is a population that is growing, as well.

That said, if the state of senior oxygen care for both patients and providers could be summed up in one word, it would be “hurdles.” Both senior patients and their respiratory providers face hurdles, such as compliance issues and cuts to Medicare funding, that they must vault, sometimes independently, sometimes in unison. To be certain, senior respiratory patients and their providers are joined at the hip.

“The whole home oxygen therapy business is built around seniors,” says Joe Lewarski, BS, RRT, FAARC , vice president of Clinical Affairs at Invacare Corp. “All the research and the foundations of why we provide oxygen in the home were based on Medicare-aged or older patients that had chronic lung disease with severe hypoxemia. So why we do what we do is a result of looking at that population.”

Depending on the respiratory provider, it’s likely that between 95 percent and 97 percent of its home oxygen business is comprised of senior patients funded through Medicare HMO, traditional Medicare, or Medicare with Medicaid, according to Lewarski. The small remaining population is most likely a mix of pediatric respiratory patients and non-senior adults with conditions such as cystic fibrosis, pulmonary fibrosis, and pulmonary hypertension.

The reason so many patients go on oxygen therapy in their later years is that the impact their chronic disease states have on their lungs takes many years to unfold before oxygen is required. Patients are closer to the latter parts of their disease states when they become chronically hypoxemic.

Growing Population, Shrinking Reimbursement

And this population is growing. Looking at chronic obstructive pulmonary disease, the population of COPD patients, who are older, is expanding at a fast pace. There are roughly 14 million to 16 million people diagnosed in the United States with COPD, and it’s projected that there is roughly the same amount of COPD patients, perhaps in earlier stages of their disease, that have yet to be diagnosed. Moreover, more patients are now able to get diagnosed than have originally been able.

“With the national healthcare system, the diagnosis level is going to go way up because people have access to medical care and tests they would otherwise would not,” says Tony Anzalone, vice president of Marketing for Inova Labs Inc. “A lot of people aren’t being diagnosed because they don’t have healthcare benefits or they aren’t seeing physicians so, if care is made more affordable and available, particularly the screening part of the program, then that’s going to drive more diagnoses.”

And even though reimbursement might be scaled back, that growing pool of potential patients entering the marketplace to be treated could grow exponentially, he adds. So, from a business perspective, while unit profits might go down due to perpetual funding cuts from Medicare, volume could go up. The question is, by how much? For instance, more screening could be good news for non-senior adult oxygen patients because it might catch COPD at an earlier age, but for older patients, the benefit might be less pronounced. It’s a moving target.

“As you look at the tier of treatment, the first stage, second stage treatment options, which are mostly drugs, are going to be the ones to benefit [younger COPD patients] the most,” Anzalone explains. “But there’s a trickle down effect, because the disease progresses and becomes more severe. Most of the device conditions are situations where there’s a need for an intervention. By that point, the symptoms are there. So the degree of market expansion on that side might be a lot less.”

Getting back to current-day senior oxygen care, there is still a considerable volume of patients to handle. But even with an increasing number of older patients suffering from chronic respiratory conditions, providers are still struggling. They face many hurdles both in terms of funding and carrying out the day-to-day business and care aspects of running an oxygen care program. In addition to the implementation of the 36-month rental cap, which completely upended their businesses, they must contend with Rounds One and Two of competitive bidding, and a host of difficult funding challenges such as CMS’s stepped-up pre- and post-payment audits.

“If you’re a home oxygen provider, you’re facing multiple challenges,” Lewarski says. “... It’s not only the decline in reimbursement, it’s changes in regulatory rules they impose without notice, audit processes, competitive bidding, and other challenges from a payor perspective. So you’re constantly being challenged in terms of your ability to provide an effective home oxygen therapy program in the face of payment cuts, policy changes and other distractions to the business that steal resources and limit resources.

“And you have other barriers,” he continues. “Some of them are working with referral sources; getting the correct information and getting people diagnosed properly and the prescriptions correct. Not every oxygen prescriber is as knowledgeable about prescribing oxygen as they should be. So there’s sometimes quite a bit of back-and-forth between the provider and the referral source to get the right information and the right prescription.”

Seniors and Compliance

And then there’s a third challenge, which is getting patients to comply with therapy. And this is where it gets tricky — while one would think that a patient with COPD would immediately start complying with any treatment that restores proper oxygen levels in their blood, that’s not necessarily the case. Life and habit can get in the way.

There are multiple patient factors that impact how patients comply with their oxygen therapy, and influence what kind of oxygen delivery system best fist that treatment and compliance scenario, Lewarski notes.

“There are lifestyle challenges,” he says. “Does this patient go dialysis three days a week, and what are the technical needs to allow this patient to get to dialysis treatment? This patient works part time, still, or they volunteer, and they need to be gone three days a week, or five hours at a time or something like that. It’s not a one-dimensional approach to treatment.”

One of the biggest treatment priorities today is keeping patients active and ambulatory, Lewarski explains. Today’s stationary oxygen concentrators are rock-solid, state-of-the-art products that patients can really depend on, but there’s the whole other side of providing oxygen care that focuses on increasing ambulation. And this is where portable oxygen concentrators have become almost revolutionary.

“I think one of the biggest needs today that is being focused on is keeping patients active and ambulatory,” he says. “One of the benefits of putting chronically hypoxemic patients on oxygen in the home was getting them back to a quality of life that was like what they had prior to going on oxygen. ... To encourage them to be as active and ambulatory as possible.”

Studies have shown that patients with the most ambulation have had the best treatment outcomes, Lewarski explains. Wearing oxygen helps longterm survival, but active patients that were highly compliant top survival outcomes. Now quality of life and patient experience is a metric that’s actually being used in measuring patient outcomes.

“That’s a big shift in the way we’re approaching how we treat people,” he says. “Experience feeds into compliance, and compliance feeds into healthier outcomes. So if we can give patients great education; get them to understand why we’re putting them on the treatment; map the best therapy, drug or technology to the best clinical outcomes ... and get them a treatment that’s easy to do, it drives compliance.”

Technological Work in Progress

And that mobility is much desired on the part of oxygen patients. Many of them want to get out, and having a portable oxygen concentrator gives them the ability to range beyond the limits of the home or a portable cylinder. This is especially true of POCs with continuous flow.

“Most seniors are looking to restore their freedom,” says Dikran Tourian, CEO of O2 Concepts. “When they’re on oxygen, historically they’ve been ‘tethered’ to either a stationary oxygen concentrator, or portable tanks that are being delivered to them that are only going to be used for a finite amount of time. Overall, I think that for seniors, the primary goal in providing oxygen to them is restoring that freedom.

“With a POC, if they have a continuous flow type, they can travel, where before they couldn’t,” he continues. “Even with a pulse dose POC at least they can travel for the day. Most importantly, if you think about a guy who wants to take his grand kids to Disneyland, for example, until the continuous dose POCs came out, it was a very difficult thing to do.”

Prior to that development, Tourian notes that those patients would have to work with their oxygen provider to have a stationary concentrator set up at their destination, and all the other necessary arrangements. The difference in quality of life between before and after the development of POCs with continuous flow is almost night and day.

And POCs will continue to grow in capability. In terms of the development of POCs, perhaps the two largest points where the devices are in a state of perpetual improvement are form factor and battery, according to Tourian. The goal is for the devices to be smaller and easier to transport, while being able to last longer and longer on a single battery charge.

“There’s lots of room for improvement,” he says. “POCs are in their infancy, so manufactures are going be constantly improving them. They’re going to be increasing the volume of oxygen they can provide; they’re going to be increasing the battery duration, so that patients can go on longer excursions; and they’re going to be making them smaller and lighter, to where it’s more convenient for patients.”

Another important development area for POCs is the “user interface,” for lack of a better term. Readout displays, buttons, attachments and other points where the patient interacts with the device need to be as clear and natural for the patient to understand as possible. For patients that often grew up before television was ubiquitous, a POC be as mystifying as a piece of NASA space gear.

“Making the product intuitive to a senior citizen would be one of those areas of improvement,” Tourian says. “If they patients are threatened or confused by it, it’s the manufacturer’s responsibility to improve that product to meet the needs of the patients, as well as the provider.” “We’re inventing cool, new devices that maybe are a little more technically complex than this patient population is used to working with,” Lewarski says. “So there are age barriers, there are education barriers, and there are demographic cultural barriers.”

Positive Patient and Business Outcomes

And POCs have a business benefit. Putting patients on POCs means that the provider no longer has to deliver oxygen tanks, and radically reduces a provider’s operational costs. No longer must they roll trucks on a regular basis, or endure the rest of the costly overhead that is involved in tank delivery. This move to low/no delivery has helped providers protect their profitability in the face of funding cuts, while also helping patients be more active.

And in a way, the trend toward providing portable oxygen concentrators has actually lines up handily with patient needs. As previously mentioned portability is exactly what the doctor ordered.

“The pulmonologist will tell you that he wants his COPD patients to get out and be active,” Anzalone says. “To get to walk, to get out, and to get some kind of physical activity. That’s the biggest driver to maintaining health in this condition. When patients become sedentary, which is a big risk in the senior population, the disease progresses very quickly.

“If the provider is resistant to providing a portable device, which is a growing trend because of shrinking profitability and reimbursement,” he continues, “then that’s counter intuitive to what’s best for the patient. While it’s tempting to place a stationary concentrator and be done with it, and have the elderly patient stay at home, the reality is that you want to promote mobility and activity as best you can in order to maintain that’s patient’s health.”

So providers, physicians and patients are all in support of POCs. The key is investment. Providers have to be willing to endure the up-front capital cost of investing in technology such as portable oxygen concentrators in order to reduce the back end operational costs — not to mention aid senior oxygen patients with increased ambulation and activity.

“It’s a mindset change,” Anzalone says. “ ... It’s a transitional process that’s happening right now in the industry, and we are now seeing the very biggest players, such as Lincare, are starting to embrace models such as this. As they start to lead the way, I think you’ll see the others will get their direction from the big guys are doing, and start to adopt and move.”

If anything, the biggest funding challenge facing providers is competitive bidding. Round One is coming up for a Re-compete to renew its three-year contracts, and the bid amounts for Round Two are to be announced this fall and the winners to be announced in spring. Moreover, with the Supreme Court’s upholding of the Affordable Care Act, Round Two has been expanded to 91 competitive bidding areas. Many providers stand to be cut out of the oxygen business entirely, and if for those that are granted a CMS contract, they aren’t necessarily “winning.” Many providers with Round One found themselves serving larger territories with all new patient groups.

“There are a lot of providers that are waiting and seeing,” Anzalone says. “There are some players that are going to be in it. I think that everyone understands that to absorb a 30 to 35 percent reduction in reimbursement, you have to have some drivers of economic scale to make this worth your while.”

“ ... I’m not hearing anyone having an onslaught of new patients having to market and go after them, so there doesn’t seem to be any value creation in terms of winning the bid and having all the patients being referred to you,” Anzalone continues. “I haven’t heard that once yet. Rather, what I’m hearing is that they’re getting paid less to provide the same services to patients. So they have to find technologies or offerings that do that and still allow them to make an effective profit margin.”

“The reality is that what competitive bidding has done is that it has forced providers to look at working on razor thin margins and being very efficient in their business,” Tourian says. “The only way to do that would be a nondelivery model utilizing POCs. It’s really the only way that they will continue to be successful. What we have experienced as a manufacturer is that every day we come across a provider that is now evaluating and wanting to switch to a non-delivery model while getting ready for competitive bidding, and in doing so, they’ll absolutely be able to land on stable ground.”

The Biggest Hurdle

While POCs are helping both patients and providers, and will continue to do so, they are not necessarily the panacea to protecting oxygen care. At the end of the day, it remains threatened, and winnowing down the cost to providing care ultimately diminishes the provider’s ability to provide the best care. And this is where we return to the crux of senior respiratory care: The benefit remains threatened, and perhaps, in the same way that POCs have redefined patients’ care and providers’ businesses, the oxygen benefit needs to be redefined to protect them both.

“Right now I think that the reimbursement systems have been focused exclusively on the monthly cost of the rental of a piece of equipment,” Lewarski says. “And because there’s never been recognition of the service component, and because there hasn’t been any real focus on outcomes or the quality of life of home oxygen, the payor side is simply looking at ‘what is the cost of this equipment, and how cheap can we buy it?’ In a race to the bottom, you’re not going to get the best level of care and service, and the best access to technology.”

This article originally appeared in the August 2012 issue of HME Business.

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