The Wound Care Opportunity
How should providers consider wound care-related products and services as a means to drive diversified revenue?
- By David Kopf
- Feb 01, 2018
As HME provider businesses hunt for avenues into new categories in order to expand their revenue and market reach, wound care keeps popping up as a key opportunity. That’s not surprising given the scale of that opportunity.
It’s substantial. The global wound care and wound management market will expand at a compound annual growth rate of 4.3 percent from $33.9 billion in 2017 to $45.5 billion by 2024, according to research from data and analytics firm GlobalData. (Read more about this market study in “News, Trends& Analysis,” starting on page 8.)
There are multiple patient groups that need wound care services; a varied range of referral partners; revenues sources that go beyond the Medicare model; and some core HME product offerings that providers should be able to knowledgeably support. With the right level of commitment, a provider can establish itself as an expert resource for wound care products and supplies in its healthcare marketplace.
Those patient groups and referrals need product — lots of it. In terms of the product categories, key wound care products that wound care providers should considering offering would be:
- NPWT, which uses a sealed bandage and a vacuum pump to draw fluid away from the wound and draw blood to the area to promote healing. (She describes this as the cornerstone of a full-line wound care business.)
- Therapeutic support surfaces, such as Group 1 and Group 2 mattresses.
- Enteral nutrition to deliver proper nutrition for healing.
- Compression therapy.
- Bariatric products, because many wound care patients are bariatric.
- Standard dressings.
Obviously, while we’re talking about revenue diversification, many wound care products are still impacted by competitive bidding. In addition to competitive bidding’s impact on NPWT and support surfaces, it is important to note that Medicare has cut back on reimbursement for other wound care supplies, and has limited coverage in recent years.
For instance, doctors once used multi-layered, padded foam dressings for many types of wounds, which have good reimbursement. However, the coverage criteria for those dressings was changed so that if a patient did not have a stage 3 or 4 pressure ulcer, the dressing wouldn’t be reimbursed and the frequency at which those items can be resupplied also changed. Furthermore, reimbursement and usage of other types of dressings also became limited.
In terms of getting paid, Medicare remains an important funding source for wound care, but it isn’t the only one. Private payer insurance, such as Blue Cross Blue Shield and others, is another solid source of funding. That said, it is important to keep in mind that most carriers follow Medicare guidelines when it comes to wound care reimbursement.
Of course, another option is retail sales of some wound care items, as well. There are patients who will purchase additional dressings and other wound care supplies out of pocket because either Medicare or their private carrier will not fund everything they need. Also, some patients might want more than what is covered just for good measure.
But whether the funding is public, private or cash, it is also important for a provider to consider how it approaches different segments of the wound care and which products it offers.
For example, if a provider wants to provide wound care items to hospice facilities, many of them buy wound care products in bulk. The provider needs to ask itself if it can trade in a high enough volume and have a purchasing model that will ensure that volume is profitable. Moreover, can that provider stand up to the competition? In those scenarios, large supply companies dealing in higher volume and with access to lower pricing can come in and take over all the good accounts.
Other high-volume competitors would include Internet sales and chain drug stores. This is especially true as reimbursement and price points have come down. It’s all about finding the right economy of scale.
Gauging the true profitability of a segment of a provider’s wound care business and projecting whether or not it will be sustainable over the long haul is a business planning skill providers must develop.
Moreover, understanding the nuances in dealing with individual consumers is critical For example, the quality and variety of dressings has evolved in recent years, which means the provider needs to have lots of stock of a wide variety of offerings. And with payers wanting to pay for lower price options, while clinicians want to obtain higher end items, providers must source products that will suit both priorities can be a tough find.
For smaller providers, this can be a tough nut to crack, especially in retail scenarios. Those providers will have customers wanting to obtain just a few items, but if they’re going to be getting them on a regular basis, then they’re going to be price shopping. But with the right product knowledge, providers can identify products that will help them buttress their revenues in the face of Medicare and other cuts. They just have to be selective.
But if providers can find the right mix, then they can tap into the “caretailing” scenario of mixing funded items with retail upgrade. With limited items being funded and the sense of urgency related to wound care, many patients are looking to extend their purchase. This is important because providers can set up a base line of value-added products that patients frequently buy or order and then heavily promote those items.
Referrals and Caregivers
In the same way there are a variety of wound care products and users, there are variety of referral partners that HME providers entering wound care should target. One key referral partner is wound care centers. These centers often server diabetic patients, people with pressure ulcers and other patients that need treatment. Others include doctors and hospitals, as well as orthopedic facilities are another source.
Working with referral partners in wound care is just like other aspects of HME: it comes down to relationships. Providers must develop strong bonds with local wound care centers, doctors and others and work closely with them to ensure it is a trusted partner in the patient’s care.
The key is to be a product expert on whom doctors and other referrals can rely. The provider wants to be the go-to resource for anything regarding wound care products — even items that the provider might not regularly stock. In acting as this kind of on-hand resource, the provider establishes itself as the expert in its marketplace.
Regularly work to educate your referral sources on the products you offer and new product innovations that are now on the market. The benefit here is twofold: you reinforce your reputation as the primary supplier of those items, and those referrals will make product recommendations to their patients and funding sources based on the education that you have provided.
In the same way providers work with referrals, they should also coordinate with caregivers and family. This is actually essential because they will help drive new product demands, and they will function as in-home support. Providers must focus on educating these key care allies. Ideal times to do this are when a patient is first getting set up, or when a referral partner, caregiver or family member contacts the provider regarding a wound care need.
In either case, use these opportunities as a springboard to perform a patient evaluation or home evaluation. In addition to providing some education on various products, ask questions about the patient’s living situation and habits. What is the client’s morning routine? How long does the client sleep? Does the client spend time in the bed during the day and how long?
Additionally, ask questions regarding the various factors related to the causes and treatments of wounds, as this will help shed light on a client’s wound care “scenario.” Some prime examples:
- Diagnosis — The patient has met with other healthcare professionals and has specific, prescribed needs. This will obviously dictate what the provider teaches them.
- Incontinence — This is an issue that is experienced by various patient groups, and when incontinence is not addressed properly, it can lead to pressure sores.
- Nutrition — Many patients do not heal properly because they are not eating the right goods and getting the proper vitamins.
- Hypoxia — In the same way they need good nutrition, wounds need to get properly oxygenated in order to heal properly.
- Where are patients sleeping? — Many patients wind up sleeping in places that aren’t ideal situations in terms of pressure relief. Dozing in lift chairs is a good example.
- On what is the patient sitting? — Obviously this is a key concern for mobility patients, because the wrong seating surface can combine the pressure, moisture and heat that leads to a pressure sore.
Successful care hinges on truly understanding a patient’s lifestyle to get a true picture of how a patient’s routine can influence his or her wound care. Questions such as these help to identify product needs and allow the provider to function as a consultant to those caregivers and clients.
This article originally appeared in the February 2018 issue of HME Business.