Medicare reimbursement cuts and the resulting demand from providers for inexpensive, high-quality products have forced manufacturers of respiratory products to crack down on costs, they say.

San Diego-based SeQual Technologies has adjusted to the cuts made over the last two years by focusing more on the patient's and provider's needs, according to Ed Radtke, vice president of sales and marketing. "Respiratory providers are in need of equipment that assists their business in the climate of declining reimbursements. While acquisition cost is a factor, there is more to the equation than the engineering cost of an out-dated model."

The result of the cost-cutting, Radtke says, can be beneficial. "Providers are in search of products with dramatic technological improvements that reduce maintenance and labor costs, while substantially increasing reliability and realistic lifecycle time."

More for less seems to be the respiratory customer's mantra, as well. Tim Clark, executive director of sales and marketing for Precision Medical, Northampton, Pa., sees this as an opportunity to increase the company's efficiency. "What is happening is that lower reimbursement rates are driving dealers to ask for lower prices," he says. "This causes the manufacturer to be more efficient in determining cost." These days, he adds, his company spends more time seeking better prices on parts and re-evaluating its product line.

Even while most manufacturers are reining in expenses, some see the respiratory market as a niche full of prospects. Bob Mogue, director of sales and marketing for Chad Therapeutics, Chatsworth, Calif., is a champion of the market segment. "Generally, the market for oxygen conservers continues to increase in opportunity," he says. "This can be attributed to two things: One is that the number of individuals who are being diagnosed with [chronic obstructive pulmonary disease] is growing. The second is that many are realizing the cost benefits from reduced reimbursement."

Reimbursement has been one of the most critical issues in the home care industry, according to Bob Jacobson, vice president and general manager of medical products for New York-based AirSep. "Our whole marketplace is driven by reimbursement. When the cuts came through on oxygen, it had a sobering effect on home care companies." Manufacturers and providers alike were forced to re-evaluate their situations in regard to cost and efficiency, says Jacobson.

Even though the respiratory market has seen better days, Jacobson thinks that there is still hope for a stabilized industry. "If it was all doom and gloom, you would not see these big global companies looking to develop a stake in home care respiratory," he says. "There is a resurgence of respiratory companies-and that is a very positive sign that the marketplace is starting to stabilize. Everyone is just watching the dollar."

On the following page is a selection of respiratory products.