At first glance, it appears to be the same old story: According to HomeCare's annual survey, home medical equipment providers are interested in — and intend to purchase — the same 10 or so products they purchased last year, and the year before that, and the year before that.

Manual wheelchairs, tied for second last year, regained the top spot on HomeCare's Purchase Intentions list, surpassing bath safety products and making the shopping lists of 75.3 percent of providers. Beds, mattresses and pads — ranked fourth in 2001 — occupy the second spot on HomeCare's list with 71.5 percent. In third place, at 70.6 percent, are ambulatory aids, which were tied for second last year. Bath safety products slipped to fourth place at 70.4, sharing the position with nebulizers, which ranked fifth in 2001.

What's the significance of the same products being purchased by providers year after year? In the home care arena, experts agree, patients' needs just don't change very much.

“It's the old ‘80 percent of your business comes from the top 20 percent of your inventory’ story: Here, the top 10 products make up that 20 percent,” says Shelly Prial, director of government relations for HPS Healthcare Management in Melbourne, Fla. “People continue to suffer from the same illnesses, and they're going to need rehabilitation or respiratory therapy. That's never going to change.”

“In general, while certain products, such as wheelchairs, may be changed or modified, they still exist to satisfy a particular need,” explains Joe Groden, president of Rochester, N.Y.-based JG Consulting.

Also, experts say, these products typically are the ones for which providers are reimbursed.

“These are the products [dealers] get reimbursed for,” says Jerold Cohen, president of Caesar Cohen Limited, a consulting firm based in Woodbine, N.J. “Also, these products are the ones that keep getting ordered, so dealers are replacing what was sold last year, and keeping up with increasing demand for more of those products.”

But keep reading. The story has changed slightly, because of the Sept. 11 terrorist attacks, a national economy in the grips of a recession and uncertainties in the reimbursement arena. Although the same products continue to be popular, providers intend to buy fewer products overall — an average decline of 5.5 percent — in 2002.

Additionally, providers are searching for ways to cut costs. According to the survey, more than half are buying with fewer vendors, and almost a third said they will decrease product selection.

“Many dealers have found it to their advantage to purchase from an average of only two suppliers for each inventory item. This way, they have the less-expensive item to provide to third-party payers and the higher-end item to provide to cash customers and ABN purchasers,” Prial says. “So the same quantity of products still is being sold, but the number of products dealers are using is declining.”

Buying cheaper products is the cost-cutting method of choice for 25.5 percent of providers, while 22.7 percent said they will buy products less frequently, 19.9 percent will increase computerization, 8.9 percent will cut staff and 6.4 percent will cut services in order to save money. Only 18.8 percent of providers surveyed this year said they would not cut costs at all.

“The bottom line is the economy and decreasing reimbursement,” Cohen says. “The insurance reimbursement services that dealers traditionally have provided and the ‘comfort’ items that are more likely to be found in a retail store — I would imagine those to be the types of products and services dealers will be cutting. It will be unfortunate that services and products dealers were able to provide in past years will not be there anymore.”

And, although a few product categories continue to increase in popularity, the rate of growth for most of those markets has decreased. For instance, bariatrics is one of only five product categories from which providers intend to purchase more products this year than they purchased last year. The number of providers who intend to purchase bariatrics products in 2002 increased over last year by 3.7 percent. In 2001, interest in bariatrics products increased by 16.9 percent over the previous year.

While the popularity of the bariatrics market may be good news for manufacturers and providers who carry the products, it also may reflect bad news about the North American lifestyle, according to some experts.

The continued popularity of these products “is a very sad commentary on life in these United States,” Prial says. “Without a doubt, [Americans] are the most overweight of any nation. I would like to see more dealers providing classes and seminars on how to maintain your weight.”

On the other hand, the increased interest in bariatrics simply may signal an increased availability and awareness of products in this category.

“The need for these products was always there, but there were no products to meet it,” Groden says. “Now just about every major manufacturer has bariatrics products, but all that really does is expose the market to more providers. The need didn't get bigger, there just is more awareness now that those products are available.”

Other products that increased slightly in popularity this year were scooter lifts at 1.6 percent; diabetes products at 0.9 percent; skin care products at 0.4 percent; and wound care, pressure and sore prevention products at 0.2 percent.

“With the exception of diabetes products, many of these products are not expensive ticket items,” says Neil Caesar, an attorney with the Greenville, S.C.-based Health Law Center and principal of Caesar Cohen Limited. “It may be significant that the areas of increase are all in sectors that have relatively inexpensive products.”

And, while growth in the diabetes market certainly is related to increased public awareness about the importance of disease management, the trend is not new, he continues. “Diabetes [market growth] is not a surprise. Home care has been moving in the direction of disease management for several years.”

Nonetheless, “The diabetes disease-management focus has gained significant attention during the past year,” Caesar adds.

At the opposite end of the spectrum, interest in women's health products decreased by 18.9 percent in 2002, dropping to 39th place from 26th in 2001. However, experts maintain that the women's health care market continues to be strong.

“Those numbers may be a little skewed by when the survey took place,” said Cindy Ciardo, director of operations for Milwaukee-based Knuepple Home Health Care Services and manager of vendor services for Essentially Women, a women's healthcare buying group. The survey was mailed to providers only seven weeks after the Sept. 11, 2001, terrorist attacks.

“September eleventh is still impacting our lives on every possible scale,” she said. “We're seeing a decline in sales of non-essential items such as swimsuits and hats. Dealers think that, in a recession, people will hold on to their money, and won't spend money on items that are discretionary. Economically, cash markets have been heavily hit, even though those markets still are a strong medical backbone.”

Which of the following methods are you using to cut costs?

Activity	% of Providers
Concentrating buying with fewer vendors	55.4%
Cutting product selection	29.4%
Buying cheaper products	25.5%
Buying products less frequently	22.7%
Increasing computerization	19.9%
Not cutting costs	18.8%
Cutting staff	8.9%
Cutting services	6.4%

TOP-RANKING PRODUCTS FOR 2002

(ranked by percentage of HME providers who intend to purchase them)

Rank	Product	2002	2001	% Change
1	Manual Wheelchairs	75.3%	77.2 %	-1.9
2	Beds/Mattresses/Pads	71.5%	74.1%	-2.6
3	Ambulatory Aids	70.6%	77.2%	-6.6
4	Bath Safety Products	70.4%	77.3%	-6.9
5	Nebulizers	70.4%	72.0%	-1.6
6	Oxygen Concentrators	61.8%	68.1%	-6.3
7	Patient Lifts	59.3%	60.7%	-1.4
8	CPAP/Bi-Level Devices	56.8%	62.4%	-5.6
9	Oxygen Conserving Devices	56.8%	63.4%	-6.6
10	Lift Chairs	56.5%	63.3%	-6.8
11	Portable Oxygen Systems	55.1%	60.1%	-5.0
12	Incontinence Products	53.5%	54.0%	-0.5
13	Power Wheelchairs	53.2%	56.5%	-3.3
14	Pulse Oximeters	51.5%	56.5%	-5.0
15	Scooters	51.2%	54.6%	-3.4
16	Compressed Gas Regulators	49.3%	53.5%	-4.2
17	Diabetes Products	49.0%	48.1%	+0.9
18	Wound Care/Pressure/Sore Prevention Products	48.2%	48.0%	+0.2
19	Seating and Positioning Products	47.4%	51.4%	-4.0
20	Support Surfaces	46.8%	50.5%	-3.7
21	Urological/Ostomy Products	45.7%	49.1%	-3.4
22	Orthopedic Soft Goods	45.2%	46.1%	-0.9
23	Home Nutrition Products	43.8%	47.3%	-3.5
24	Skin Care Products	34.9%	34.5%	+0.4
25	Sleep Disorder Treatment Products	32.7%	39.3%	-6.6
26	Bariatrics Products	32.4%	28.7%	+3.7
27	Aspirators	30.5%	37.2%	-6.7
28	Hot and Cold Therapy Products	29.9%	41.2%	-11.3
29	Orthotics/Prosthetics	28.8%	32.5%	-3.7
30	Apnea Monitors	28.3%	35.3%	-5.0
31	Liquid Oxygen Systems	28.0%	35.7%	-7.7
32	Pediatric Respiratory Products	27.4%	37.6%	-10.2
33	Computer Hardware and Accessories	26.6%	N/A	N/A
34	Scooter Lifts	26.6%	25.0%	+1.6
35	Pediatric Rehab Products	25.5%	30.3%	-4.8

PREVIOUS TOP HME PRODUCTS

2001
1	Bath Safety Products	77.3%
2	Ambulatory Aids	77.2%
3	Manual Wheelchairs	77.2%
4	Beds/Mattresses/Pads	74.1%
5	Nebulizers	72.0%
6	Oxygen Concentrators	68.1%
7	Oxygen Conserving Devices	63.4%
8	Lift Chairs	63.3%
9	CPAP/Bi-Level Devices	62.4%
10	Patient Lifts	60.7%
2000
1	Manual Wheelchairs	74.1%
2	Nebulizers	72.5%
3	Ambulatory Aids	71.1%
4	Bath Safety Products	70.5%
5	Beds/Mattresses/Pads	70.2%
6	Oxygen Concentrators	64.5%
7	Portable Oxygen Systems	58.0%
8	CPAP/Bi-Level Devices	57.3%
9	Oxygen Conserving Devices	57.3%
10	Lift Chairs	55.9%
1999
1	Wheelchairs, Manual & Power	82%
2	Ambulatory Aids	80%
3	Bath Safety Products	78%
4	Beds/Mattresses/Pads	77%
5	Nebulizers	76%
6	Oxygen Concentrators	72%
7	Patient Lifts	68%
8	CPAP/Bi-Level Devices	64%
9	Lift Chairs	64%
10	Oxygen Conservers	62%
1998
1	Wheelchairs, Manual & Power	73%
2	Beds/Mattresses/Pads	73%
3	Ambulatory Aids	70%
4	Bath Safety Products	70%
5	Nebulizers	69%
6	Oxygen Concentrators	64%
7	Incontinence Products	61%
8	Wound Care Products	60%
9	Patient Lifts	59%
10	CPAP/Bi-Level Devices	57%
11	Lift Chairs	57%