Wound Care: Financial First Aid
Wound care can help help HMEs searching for new revenue a way to patch up their bottom lines.
- By David Kopf
- May 01, 2017
With some provider profit-and-loss statements hemorrhaging
so deep in the red that they look like they need stitches,
providers are looking for a effective ways to bandage up lost
revenues. Wound care just might be the fix that will suture up
revenue structures and put their performance back on a profitable track.
The wound care opportunity is broad. There are multiple patient groups
that need wound care services; a varied range of referral partners and
revenues sources that go well 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 a expert resource in its healthcare marketplace.
“It’s not going away,” says Heather Trumm, BSN, RN, CWON, the director
of wound care for VGM Group Inc. “There are going to be more wound
issues. … that’s based on the demographics of our population.”
Trumm points out three key patient groups that are growing and will
need wound care services: diabetes patients, the elderly and the the
bariatric population. Each of these groups have their own propensity to
getting wounds, and needing therapies that can help those wounds heal.
“With diabetics, what generally happens when a patient has diabetes,
their sugar is high in their blood,” she days. “The way that I describe it is,
when you have diabetes your blood flow is a little bit more sluggish when
it’s got sugar in it. So for one, they probably will develop neuropathy, which
is a loss of a sensation in their digits or extremities.”
And when a patient has poor blood flow and a loss of feeling, they can
run into a situation where it takes them time before they discover they’ve
suffered a cut or injury on an extremity, and once discovered the wound take some time to heal because the blood flow is poor.
With the elderly population, the issues are similar: poor flow, plus a
propensity to wounds, but for different reasons.
“As we live longer, we develop various conditions, where maybe our circulation
isn’t as good,” Trumm explains. “So, venous blood flow, arterial blood
flow, isn’t as good. So if we bump our leg on a corner table, or if we get real
dry skin, the chances of our skin breaking open are greater. Then, it’s going
take longer for the wound to heal.
“There’s some physiological things that happen to us as we age,” she adds.
“We have less fatty tissue right underneath our skin, and so our skin is a little
bit more frail. So therefore, there’s less fatty tissue as well, you’re going to get
to the bone quicker. So, they’re at a higher risk for pressure ulcers.
“Also, as we age, our sensations decrease,” she continues. “So if we burn
ourselves on the stove, or get hit, or whatever, our reaction time is a little
delayed, and so more damage occurs.”
And, the bariatric population has its unique wound care issues, as well.
“I would say number one, they have more adipose tissue, or fat tissue on
them, and there’s no vascularity in adipose tissue,” Trumm explains. “You
have to have blood flow to get to the wound, and you’ve got to have the
nutrients, the enzymes, all the co factors getting to that wound to heal it.
Well if there’s fat in the way, and no vasculature — I know that sounds kind
of blunt — [blood] has a hard time reaching those areas.”
Add to that a less active lifestyle typically associated with overweight
conditions, and that adds to bariatric patients’ wound care needs.
“They have a harder time moving around,” she says. “Therefore, they may
develop pressure ulcers easier. Because you’ve got to move around, I mean,
you and I, if you’re sitting in a chair whether you know it or not, you don’t
even know you’re doing it, but you’re switching positions all the time. With
the overweight population they have a tendency to not move as much.”
And, like in other wound care patient groups, nutrition is an important
concern for bariatric patients.
“It all comes down to blood flow and nutrition,” Trumm says. “A lot of times,
they [bariatric patients] are not getting the right nutrition. They’re not getting
the right protein, the right vitamins and minerals in their body, as well.”
And with that broad blend of patients comes an equally broad business
opportunity. Wound care patients need wound care equipment equipment
and supplies throughout their care, and that care can last a while. Wounds can
be tricky for physicians, nurses and healthcare partners such as HME providers
to treat. One therapy might look like it will do the trick, but as the wound is
treated, it might be determined that a better approach is available. A smart
provider can strategically position itself to assist throughout that process.
“You find wound care in every setting, and it’s just not going to be one
healthcare arena that you’re going to find the wounds,” Trumm explains.
“Generally what happens is, if you start from the hospital as an acute care
setting, patients are in the hospital and have a wound, and they’ll be going
go to one of many settings. … Whether they’re sending the patient home,
or you can dig in that business. Unfortunately they might be sending the
patient to a hospice, or to a hospice home or in their home, hospice care.
They may be sending them for follow up to a wound care center, who may
be sending them to a skilled nursing facility.”
This presents providers with multiple opportunities to become a
partner and trusted resources to not just discharge planners, but a variety
of care professionals.
In terms of products, Trumm points out three key categories a wound
care provider can offer: dressings and bandages, therapeutic support
surfaces, and negative pressure wound therapy (NPWT). These can offer
points of specialization, or perhaps a spectrum of items that can support a
very broad wound care business. Let’s take a deep look at a couple of them:
Closer Look: Support Surfaces
A cornerstone offering in the home medical equipment industry is support
surfaces. That said, support surfaces have seen considerable change,
particularly when CMS added Group 2 support surfaces to the list of
categories for Round Two of competitive bidding, which caused a major
market shift. This includes alternating pressure and low air loss mattresses,
which make up a considerable percentage of the therapeutic surfaces being
provided to patients. The population patients that need a support surface
that either helps prevent or treat wounds and pressure sores is sizable.
Fortunately, Group 1 surfaces, such as non-powered mattresses and overlays,
and Group 3 surfaces, which are air-fluidized surfaces, but the fact that volume
of patients need Group 2 support surfaces cannot be ignored. This is where the
wound care market really comes into place, because wound care is more than
just Medicare. There are a variety of healthcare referral sources, health plans,
facilities and private payer sources that can fund group 2 support surfaces.
Providers might be working with hospitals, the Veteran’s Administration, a
hospice provider, and they can be working with a range of staff, such as wound
care coordinators, a wound care doctor, or a wound care nurse.
They key for a provider succeeding in such a highly diversified environment?
It comes down to commitment, according to Ron Resnick, president and owner
of therapeutic support surface manufacturer Blue Chip Medical Products Inc.
“Wound care is a commitment. It’s a commitment in education and
training,” he says. “It’s also financial commitment. You can’t just say
we’re wound care and not carry adequate type products. You have to be
committed. That’s number one. So before they [providers] even decide ‘oh,
this is a great opportunity.’ They have to be committed.”
And that commitment must come in a variety of
forms. The first is in education, according to Resnick.
“Your staff has to be adequately trained,” he
says. “I’m talking about customer service. I’m
talking about your drivers. I’m talking about your
sales people. Everybody that’s involved within
that company needs to be properly trained.
And, as Resnick notes, that training can come
from variety of sources, but one of the best
places for a provider to start is by working with
its vendor. And that’s important, because a
vendor that has a solid level of clinical expertise
can help a provider make good on another
aspect of its commitment to wound care, which
is committing to working closely with a highly
diversified set of referral partners.
“We have wound care ostomy continence nurse
on staff who can communicate effectively,” he says.
“We have the necessary assets to help a dealer.
A dealer can’t just walk in and say to her friend in
physical therapy and say, ‘Oh! You know what?
We’re doing mattresses now.’ That doesn’t work.”
Providers must take their partners “by the
hand and show them,” he explains. That means
being an expert, and there’s no faking that.
Providers must understand their products, how
they apply to various wound care conditions
and situations, other wound therapies and
treatment sin play, and how the patients can
play a role in their own outcomes.
“There are a lot of extrinsic and extrinsic
variables of the patient,” Resnick says. “Their
mental acuity; their nutritional value; are they
ambulatory or are they in bed? ... Mattresses
are not necessarily total protocol. There can
be on dressings. There could be a wound vac.
There could be a variety of different treatments.
… The deal is, if a provider is not committed
financially and educationally to go and learn to
do this properly, then they’re not going to be
able to compete.
“It is extremely important for everybody to be
an ambassador from the customer service rep,
to the driver who delivers whatever product that might be delivered whether it be a mattress, to adequately deliver it, set it up
and explain it to the patient or to have the sales person or the company has a
wound care nurse to go in there and explain how things work,” he adds.
Another way in which providers must commit is market development. HME
businesses must work overtime to ensure they they go beyond Medicare. And
Resnick assures there are a number of market segments in which providers can
find success — as long as they are willing to go outside their comfort zone.
“There are tremendous opportunities hospice, the long-term care
market, nursing homes, the acute care market,” he says. “Are you
competing against some of the big boys like Hill-Rom and KCI [Kinetic
Concepts Inc.]? Yes but so what? If you’re local and you can support a
region or a territory well, then a facility would generally consider you if they
feel that you’re competent enough to service that market.”
And in terms of the homecare setting, there are still non-Medicare options
to help patients get the right therapeutic support surface. Providers should
not be afraid to work with their referral sources to let them know that despite
the bid program, they can support patients funded by other insurance carriers.
“Go to the referral sources and say, ‘Listen if your patients can’t get a deal
or can’t continue onto Medicare, we have special pricing for them, whether
it’s in a rental in form, or as a purchase, if it’s going to be a long-term-use.”
And that gets to Resnick’s final component of support surface and
wound care commitment: product. If providers are focusing on a homecare
reimbursement model only, they will not see the types of reimbursement
that providers saw in the days before competitive bidding. That considerably
lower funding model means that providers will have to reduce their
cost structure. What’s the biggest cost in a support surface business? The
“People are seeking the path of least resistance aren’t they?” he says.
“Rather than provide the right care with the right equipment — and doing
so by branching out and trying to find new avenues — They’re just trying to
go with the lowest common denominator based on reimbursement which
is the wrong thing to do. … They have to be committed to doing it right. If
they’re not committed to doing it, it’s not going to work.”
Closer Look: Negative Pressure Wound Therapy
Negative pressure wound therapy uses vacuum pressure to help wounds
heal. Used on chronic wounds and second and third degree burns, a sealed
dressing is placed on the wound and connected via a hose to a NPWT
device. The device then uses a vacuum to draw out fluids from the wound
and increase blood flow to the area in order to promote healing. In terms of
the HME market, NPWT equipment is now portable and regularly used in
the home. In fact, there are even disposable, single-use NPWT devices.
Because NPWT therapy has caught on so much over the past two
decades, and because it can be used in the home, CMS added NPWT to
competitive bidding. However, that doesn’t mean there isn’t a market for
the devices, dressing and related services. Similar to support surfaces, if
providers who do not have bid contracts for NPWT are willing to explore
new funding opportunities, there are many opportunities.
In fact, the opportunities can be considerable. The global market for
Negative Pressure Wound Therapy (NPWT) will expand from an estimated
$700 million in 2014 to approximately $1.07 billion by 2021, according to a
new report from research and consulting firm GlobalData.
The company’s report, MediPoint: Negative Pressure Wound Therapy –
Global Analysis and Market Forecasts, says as more physicians learn about
of the therapy approach and its various applications, that growth in awareness
will help drive a 6.2 percent Compound Annual Growth Rate (CAGR).
Also, the discovery of alternative NPWT applications, such as bolstering skin
grafts to enhance graft uptake, will further drive an increase in its use.
In terms of equipment, GlobalData researchers noted that “while standalone
devices are expected to see steady global sales due to the higher availability
of clinical data demonstrating their efficacy, portable and disposable
devices will witness relatively fast growth over the forecast period.”
“This wound care market place is very daunting; it’s huge; it’s got lots
of different technologies,” says Patrick Schwab, NPWT product manager
for manufacturer Medela LLC. “But the negative pressure piece of it is real
simple. Usually it involves a full thickness wound, and [NPWT] goes on the
hospital; sometimes it goes on in the wound care clinic; sometimes it goes
it goes in long-term care, or in a long-term acute care facility.”
And, like support surfaces, the key is for providers to go outside their
comfort zone. NPWT sounds complex, but looks can be deceiving.
“One of the interesting things about our negative pressure wound
therapy HMEs that we have today: most of them didn’t start in the negative
pressure wound therapy business,” he says. “It’s really not that hard. If you
already have a referral source, and you know how to transition patients out
of hospitals or any brick and mortar care facility, and they’re going home,
and you have some equipment that you’re delivering, then you’re a potential
candidate to being able to expand your business.”
And because NPWT is such a widely used treatment, there is ample
private payer business providers can attract. is steady private payer sources.
“Even if you don’t have a competitive bid and you didn’t win the competitive
bid in your area, explore who the insurance providers are,” Schwab
advises. “You may already have business with private pay that would be
advantageous for you to take advantage of negative pressure wound
therapy, and we [Medela] have consultants that can come in and help the
HME determine whether negative pressure wound therapy is right for them.”
In fact, Schwab recommends that provider definite work with vendor
partners who have a vested interest in their success. To that end, there are
equipment makers who can both educate their provider customers, but also
help develop and educate referral sources.
“We’re going to help with referrals, wherever we have relationships,” he says.
“And if an HME has a referral source that they have a great relationship with
and with whom they’re looking to expand into NPWT, we’ll help them get to
understand what that business is like. We have an entire website devoted to
supporting their business, training staff, training associated home health clinicians,
and helping them train their in-facility folks.”
And this includes education, Schwab says. Both the provider and the
referral source must understand NPWT.
Medela tries to help facilitate that “Medela provides the clinical and business training,” Schwab explains. “We can help the HME and their other care partners — the nursing staff,
the long term care facilities — we can help with that education and get
them up to speed there, so there’s a little bit of a learning curve but it’s not
long and we can help them there.”
Schwab underscores that the provider needs to work with a vendor that
can also help facilitate solid patient and clinician support. No matter what
time of day, if an NPWT patient has a question, that question should get
answered. Providers need to have a safety net in place.
“I kind of think of it as a tag team,” he says. “If they need help with technical
and clinical answers — whether it’s a patient or a clinician that’s taking care of
a patient — and they reach out to the HME provider and if the HME provider
either doesn’t have anybody available, or ties, but still needs a little bit more
support, that’s where the tag team comes in. Under normal hours we have a
staff of clinicians that can help answer that question. And if it’s after hours we
have support that they can use, so they’re not out there left hanging.”
Fortunately, the equipment is pretty simple and straightforward, and not
subject to regular revision or game-changing technologies that change the
approach. Ubiquity has helped make NPWT very approachable.
“It’s becoming more and more standardized and more and more clinicians
are gaining familiarity and ability with negative pressure wound
therapy than ever before,” he notes.
And that’s not surprising given NPWT’s aforementioned market expansion.
With more and more diabetic wounds being treated , and with the elderly
population continuing to grow, providers looking to expand into wound care
should consider NPWT. Schwab reiterates that the market opportunity is there.
“There’s not a lack of at-risk patient population,” he says. “It’s going to
grow, it’s a well-established business and there’s more than just Medela
to gain educational and clinical resources. Now it’s a great time when the
market is still growing.”
Getting Educated, Getting the Business
To Resnick’s earlier point, providers can fake their way through wound care.
They must have the right education.
“There’s plenty of training out there for wound care,” VGM’s Trumm
notes. They need to understand wound care. There’s a week-long course
out there that they could take that’s available from the Wound Care
Education Institute, and that’s a very good course.”
Trumm also suggests a provider add some “big guns” clinical expertise to
the team, as well. Specifically, she suggests something like a Wound Ostomy
and Continence Nurse. This is important because, while the WOCN is not
allowed to touch the patient, he or she can speak the same language to other
WOCNs and similar clinical staff on the patient’s “wound care team” to make
the the right recommendations and give specific, product-related instructions.
“This is my soapbox — and some HMEs will argue with me — but the
most successful DMEs that I see out there that are doing great wound care,
have a clinical person on board,” she says.
That creates a level of expertise that will build the provider’s reputation
“Then the referral source looks to that DME and they look to them as
they have the expertise in wound care,” she says. “And that’s what will
drive the business.”
This article originally appeared in the May 2017 issue of HME Business.