Maintaining Sleep Resupply Success
Two experts offer top tips for growing your sleep resupply business, even in difficult times.
- By Joseph Duffy
- Dec 01, 2013
Competitive bidding has been a major factor in influencing the sleep resupply business, according to HME provider Robyn Parrott, RRT, president of Sleep Solutions Home Medical. She says her company has been in the sleep resupply business heavily for the past eight years, and has witnessed a 25 percent decrease in profitability regarding her company’s resupply segment. In fact Parrott says the financial impact came in part from losing the Medicare supply patient with the onset of competitive bidding. But even so, she feels resupply can be a good revenue stream when done correctly.
David Groll, CEO of Circadiance, a manufacturer of respiratory products, agrees that reimbursement cuts from competitive bidding have had a negative impact on sleep providers’ bottom line. And on top of that, proving patient compliance with therapy is another layer of challenge. However, that doesn’t change the need to serve the market.
“The important issue is that the underlying condition of the market hasn’t changed,” says Groll. “Most people who suffer from OSA remain undiagnosed. The diagnosis of these patients continues at a brisk pace through in-lab PSG and home sleep testing. So the number of patients in the installed base for CPAP continues to grow. The opportunity isn’t going away anytime soon.”
With that said, our experts offer the following top tips for creating or maintaining a successful resupply business:
Remain in contact with your PAP population, especially during the first week. “We utilize an online program to download data cards,” says Parrott. “The information we obtain from these data cards are shared with the referring physicians to ascertain that the proper equipment and interface is being utilized. If the patient is experiencing mask leaks we contact them. If the patient has a high AHI or is experiencing periodic breathing problems we contact the referring physician.”
Know the economics of your products and services. “There will be managed care groups and private insurers that revert to Medicare levels of payment,” says Groll. “If private payers follow CMS payment policies, it will be more critical than ever that providers know the economics of their products and services. This is more than just knowing the cost of the product. It includes the cost, the amount of reimbursement available and the resulting patient compliance. The cheapest mask will clearly not provide the best economics for the provider if the patients do not comply with their therapy.”
Ensure a proper interface in order to help the patient stay compliant. “The first month is important to compliance, so pay close attention to mask leaks and skin irritation,” says Parrott. “Also Perform mask refits and replace the interface early if the patient is having problems.”
“Focus on compliance, not product cost,” says Groll. “The majority of the revenue from a CPAP patient will be derived over the next 10, 20, 30 years of resupply. The cost differential between supply items is dwarfed by the effect of compliance. There is a strong case to be made that the interface is the most critical link in the therapy chain. As such, many providers are willing to invest in better mask technology to enhance the probability of a positive outcome.”
Engage the patient. “Encourage feedback and questions that patients may have and respond quickly,” says Parrott. “Don’t lose the patient early on or all your hard work will be worth nothing if the patient has the equipment picked up. One manufacturer offers an app to get the patient involved. We have been promoting this by placing the information in our setup folders and also when we mail out data cards. Many patients have signed up for this.” Other suggestions include:
- Offer a PAP tune-up day twice a year. Parrott says participants don’t need to be Sleep Solutions clients. They use these events to check and clean equipment, and manufacturers, who are present at the events, replace filters and tubing at no charge. Parrott says they also offer door prizes.
- Use email marketing to keep patients informed of any changes, sales and special offers on a regular basis.
- Offer one Saturday a month for setups and refits. Parrott says they are trying to accommodate patients who do not want to take time off of work to receive their equipment or require a mask refit.
Chose the right resupply product. Parrott says the top products in most successful resupply businesses include monthly cushion replacement, nasal interfaces and wipes. “We actually sell quite a few CPAP Max pillows,” says Parrott. “These pillows are designed to work with the PAP mask and make sleeping on the side easier — and sell the pillow case that goes with it.
“Tubing covers are very popular, especially in the winter,” he adds. “Our climate here [Detroit] causes much water build-up in the tubing. The addition of a tubing cover decreases the amount of water build-up in the tubing. We actually have a local seamstress make these to keep the business close to home. Also, we have a Mask Wipe Loyalty card wherein if the patient purchases 10 wipes the 11th is free.”
Groll suggests that most successful resupply businesses will have the following:
- A high-quality patient interface. “Not many would debate that the fight for adherence is won or lost here,” he says. “You can have the smallest and lightest PAP device with the most sophisticated algorithm and data transmission capability. None of that matters if the patient can’t tolerate the mask.”
- A reliable and cost effective flow generator with a heated humidifier that can capture and report compliance and clinical outcome data. “Auto-titrating systems are becoming the standard and are moving in the direction of not commanding a premium price,” he says.
- Heated tubing not only eliminates condensation, but also allows the use of higher humidifier settings. “This delivers air at a temperature and humidity level much closer to what the body expects, thereby reducing the work of breathing — another investment in a positive outcome,” he says.
- Lightweight extension tubing. “As interfaces have become smaller and lighter, a common problem that has emerged is the weight of the breathing tube and/or the torque resulting from patient movement dislodges the interface during therapy,” Groll says. “Once again a simple compliance-oriented solution that provides extra revenue to the provider.”
- Retail Items. “There are many products, such as hose clips, tubes cleaners, etc., that patients are interested in,” he says. “One has only to go online or walk through a retail DME location to see the vast offering of useful products.”
“A resupply program takes commitment from many people within the organization,” says Parrott. “All members of the team must be committed to the greater cause. Yes, we are a for-profit business but if we don’t manage our patient population correctly, there will be no profits to be had.”
This article originally appeared in the December 2013 issue of HME Business.
Joseph Duffy is a freelance writer and marketing consultant, and a regular contributor to HME Business and DME Pharmacy. He can be reached via e-mail at email@example.com.