A Sleeping Giant Awakens

Apr 1, 2001 12:00 PM, Richard Park

After some years of sagging reimbursement and lagging interest on the part of providers, the beds and support surfaces market appears to be coming around, manufacturers say.

Independent research concurs with their optimism that the market will experience significant growth during the next few years. According to a report from San Jose, Calif.-based research firm Frost & Sullivan, the beds and support surfaces market generated more than $740 million in revenue in 1999 and is projected to reach more than $1.8 billion by 2006. That's a compound annual growth rate of 14.2 percent -- and a year-by-year growth rate expected to exceed 25 percent by 2006.

"The beds and support surfaces business is a healthy one," says Ron Resnick, president of Blue Chip Medical Products. "The technology has brought some costs down to where they're affordable. In addition, the business has matured to a certain level -- manufacturers have gotten more aggressive in reducing costs and are making better products. And now, due to the simplicity of operating these systems and the quality that goes into them, they are brought to market, where everybody gets a shot at them."

Fueling the market is the fact that home medical equipment providers are waking up to its growth potential. Once one of the steadiest markets for HME providers, the beds and support surfaces segment fell into a significant decline in 1998-99 after Medicare reconfigured reimbursement. According to manufacturers, the changes caused many providers to turn their backs on the market. But now, spurred by new products, providers are starting to return — a trend manufacturers expect will continue for some years.

"It's taken awhile for dealers to realize there is still a good opportunity in this market," says Thor Rood, medical division manager of Supracor. "So while the changes in funding hurt the market, it's now coming back because this is a market that is far from being utilized to its fullest potential based on our aging population. When the funding was changed, a lot of dealers felt it was no longer profitable, that they could better utilize their dollars somewhere else and their resources in another avenue. But now they are seeing it actually is very good."

The development of new product areas such as bariatrics has energized the market, manufacturers say. Traditionally, few providers operated in the bariatrics arena because it wasn't cost-effective to do so and the products are typically expensive. But the percentage of people who are obese has grown significantly during the past couple of years, and the market now offers appealing opportunities.

"The bariatric bed segment will continue in an upward trend, and a significant one at that," predicts Linda Gray, senior product manager of beds and therapeutic support surfaces at Invacare. "The bariatric population has increased dramatically over the last few year, and all research indicates that this trend will continue. We're seeing a number of providers that historically avoided this market segment now actively pursuing it, particularly now that there are quality products available at reasonable prices to service customer needs."

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More Prevention needed

THE FACTS ABOUT wound care are disturbing. According to research firm Frost & Sullivan, 15 percent of individuals admitted to hospitals in 1999 either already suffered from pressure sores or developed one while hospitalized. In addition, treating wound care cost an estimated $66 billion in 1999. Despite such statistics, Medicare does not provide adequate reimbursement for beds and support surfaces that could be used to prevent pressure sores, manufacturers say.

"Medicare is unwilling to provide or pay for good, preventive products, which is going to just continue to cause people to break down and therefore need the larger, more expensive products to treat wounds," says Jim Acker, general partner at Tempest International. "They're very much set in their ways, and they're not going to look at innovative new technologies for prevention. Until they change that attitude, it will continue to harm the patient's well-being. Medicare is very slow to initiate change, and they're not very progressive in their thought process."

Fortunately for some patients with private insurers, Medicare is not the only option. "Private insurance agencies tend to be more lenient because they often evaluate patients from a complete cost of care perspective," says Linda Gray, senior product manager of beds and therapeutic support surfaces at Invacare. "They recognize research that proves it costs five to 10 times more to heal a Stage III or IV pressure ulcer versus the minimal cost of providing preventative products. However, many providers don't realize the reimbursement support Medicare provides for pressure ulcer prevention through the Group I therapeutic support category. Many more Medicare patients could be enjoying the benefits of reimbursed Group I products if providers became more familiar with the indication criteria."

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A Closer Look at Pressure Sores

The following are descriptions of the various stages of pressure ulcers.

Stage I: An observable pressure-related alteration of intact skin whose indicators as compared with the adjacent or opposite area on the body might include changes in one or more of the following: skin temperature (warmth or coolness), tissue consistency (firm or boggy feel) and sensation (pain, itching). The ulcer appears as a defined area of persistent redness in lightly pigmented skin, whereas in darker skin tones the ulcer might appear with persistent red, blue or purple hues.

Stage II: Partial-thickness skin loss involving epidermis, dermis or both. The ulcer is superficial and presents clinically as an abrasion, blister or shallow crater.

Stage III: Full-thickness skin loss involving damage to or necrosis of subcutaneous tissue that might extend down to but not through underlying fascia. The ulcer presents clinically as a deep crater with or without undermining of adjacent tissue.

Stage IV: Full-thickness skin loss with extensive destruction, tissue necrosis or damage to muscle, bone or supporting structures (e.g., tendon, joint capsule). Undermining and sinus tracts also might be associated with Stage IV pressure ulcers.
Source: National Pressure Ulcer Advisory Panel

THE BEDS AND support surfaces market is competitive already, but manufacturers in the United States say an influx of less expensive overseas products is making competition even stiffer.

"We have seen a definite impact of lower-end foreign products coming into the States," says Dan Demsher, chief executive officer of Plexus Medical. "The reliability, quality and therapy are not the same. But they have also put pressure on the overall price points. That's one of the reasons why the push toward lower-cost products is there."

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Cheaper But Not Better?

While these products are less expensive, they are not necessarily better for a provider's business in the long run, he says.

"Keeping in mind these are rental products, it's a product that's a 24-hours-a-day, seven-days-a-week service," says Demsher. "And you may be saving a few dollars on the acquisition of the product. But if you have to service it on overnight and service calls, you're more than spending that money again and again to maintain the product in the field."