Regardless of competitive bidding and impending rental caps, the demand for providing oxygen remains — and is poised to grow.
Case in point: Chronic Obstructive Pulmonary Disease (COPD) will become the third leading cause of death for Americans by 2020, according to the American Lung Association. The association says 12 million Americans are currently diagnosed with COPD, and estimates an additional 12 million Americans to be undiagnosed COPD sufferers.
With those figures alone, clearly there is a patient need, and thus a strong marketplace, for oxygen services. But how should HME providers position themselves to best deliver oxygen products and services in 2008?
“I think HME providers can look at this from two different perspectives,” says Joe Lewarski, vice president of the respiratory group for Invacare. “One is to look at where the technology is going and how it will help their business. The other is to look at where the industry is headed.”
Where products are concerned, Lewarski says HME Providers should not expect any “paradigm changing” technologies to enter the market. Instead, he says the focus will remain on portable air concentrators and transfilling systems.
Moreover, now PACs and transfilling systems have had some time on the market and have matured and been refined “now is a good time, if not a better time to jump in” and invest, he says.
However, Lewarski advises that technology is only part of the puzzle. Providers need to spend equal time – and perhaps more – ensuring that their business model matches the industry’s changing conditions. Besides competitive bidding and 36-month rental caps (the impact of which won’t be felt until 2009), providers will also likely experience increasing labor costs and insurance costs.
“In the face of that, providers are starting to appreciate that you have to be more efficient in the delivery of care and service,” he says. “Most of the answers revolve around removing costs without diminishing service.”
And in terms of timing, Lewarski advises HME providers act sooner, rather than later to create those efficiencies, rather than wait for any new earth-shattering technologies to ride to the rescue by reshaping the market. “If I’m sitting around waiting for something new to change my business, then I’m probably going to miss the bus,” he says.
To get the inside scoop on what Lewarski and other industry experts have to say about oxygen prospects in 2008, make sure to read the February 2008 issue of HME Business magazine. SUBSCRIBE NOW!
