The tide has turned for the home respiratory market. Experts see new growth opportunities, advances in technology and an expanding role for home medical equipment providers.

“I am as bullish on the home respiratory market as I have ever been,” says Joseph Priest, president and chief operating officer of AirSep.

Priest is not alone in his optimism. An aging population, increasing diagnoses of pulmonary disease and a reprieve from reimbursement cuts all contribute to anticipated growth. “This market is going to continue to grow,” says Donald Morrow III, president of O₂ Technologies. “In 20 years, 20 to 30 percent of the population is going to be over 65.”

For home medical equipment providers, opportunity is present. “It still is a service industry,” says Roger Briese, a biomedical engineering manager for Caire. “If a local provider is managed correctly, there is an opportunity for them to make money.”

TRACKING TECHNOLOGY

Technology advancements are also in the works for many companies who manufacture products such as ventilators, oxygen analyzers, oxygen conservers, spirometers, sleep therapy devices and oxygen therapy products, and cost containment is a strong driver of these changes.

“The biggest challenge we face as a manufacturer is to produce high-quality products that incorporate cutting-edge technology at a cost-effective price,” says Erika Laskey, director of sales and marketing for Chad Therapeutics.

Della Antista, director of marketing for PDS Healthcare Products, also emphasizes the cost effect on manufacturing and says her company looks to advances in technology to lower costs. “We continue to move toward more high-tech solutions, making devices smaller and taking costs out of some components by putting brains into the software rather than into the devices themselves,” she says.

“The driver for technology is reduction of cost and improved patient friendliness because those things drive product sales and product use,” says Doug Bosnik, executive vice president and general manager of Western Medica.

Yet, technology can often come with a price. “Manufacturers, as well as providers, are challenged to bring new technology to the market and to the end user in the face of fixed reimbursement,” says Gary Troilo, director of marketing, Pulmonetic Systems. “Patients are getting out of the institutional setting earlier, thereby lowering cost of care, but there is no increase in reimbursement when that patient goes home.”

COUNTING COSTS

To find some relief, providers are looking for lower costs and for new features, says Invacare's director of respiratory marketing, Mitch Barton. Barton also says it is important that products be provided in a timely and effective manner — another provider expectation.

The administrative burden of filing claims and the cycle time it takes for providers to get paid is an additional concern, says Rich Kocinski, vice president and general manager of respiratory for Sunrise Medical. “This is a huge cost to the business that does not add value to the provider side, the manufacturer side or the payer side,” he says.

A better use of time for respiratory care providers and equipment manufacturers, says Kocinski, is understanding what can be done to improve the quality of care in the home and what is the most appropriate use of existing technology. “When we can define the areas in which to improve either the quality of care or the cost of care, then we will better understand how to adapt the equipment,” he says.

Across the board, manufacturers are confident their research efforts will make a difference in the way HME providers run their businesses, mainly by reducing the time spent servicing the equipment.

“Some (advances) that are on the horizon could change the way the entire respiratory market delivers services and care,” says Bosnik, referring to new materials, delivery mechanisms and processes.

Asthma Educators Push for Recognition, Reimbursement

Similar to diabetes, asthma is a condition that requires patient education and training, and like diabetes educators, asthma educators want recognition and reimbursement for their services.

A national, multidisciplinary certification process for asthma educators is under way, says Christine W. Wagner, a nurse practitioner and asthma educator at Allergy, Sinus and Asthma Professionals of Houston in Texas. Wagner is a member of the National Asthma Educator Certification Board, which is in the process of establishing the certification process.

“We are interested in reimbursement for patient education,” she says. “Education is something that is done to a large degree by allied health professionals since asthma, like diabetes, is a chronic disease that needs constant reinforcement.”

The NAECB consists of a multidisciplinary group of asthma educators including physicians, nurses, nurse practitioners, respiratory therapists, health educators and pharmacists.

“Right now, there are certification programs in different states, but there is no national standard for asthma education and asthma educators,” says Wagner. “We can't really ask for reimbursement until we can validate what is being taught and that what is being taught is consistent with standards of practice.”

The goal is to have a certification test and process for administration in place by 2002. For more information, contact the Association of Asthma Educators at 888/988-7747 or visit www.asthmaeducators.org.

Growth Rates, Undiagnosed Population Offer Opportunity in OSA Market

The market for obstructive sleep apnea treatment devices is one of the fastest-growing segments of the home medical equipment industry. Experts estimate annual growth for these products to be about 20 percent — quite a difference from overall industry growth estimates of 5 percent.

OSA is estimated to affect approximately 20 million people, but experts say most of those affected have yet to be diagnosed. “Only about 10 percent are being treated right now,” says Jim Liken, president of Respironics.

Along with financial growth, technology for sleep therapy — continuous positive airway pressure, bi-level, and auto-adjusting devices — continues to advance. “This portion of the business is still fairly new, so there is new technology coming out all the time,” says Justin Callahan, president, Fisher & Paykel Healthcare. Compliance through patient comfort is the driver of this technology, he says.

Liken agrees. “The issues are to get more people into the sleep labs to get diagnosed and, once they get on therapy, the real issue is to keep them compliant,” he says.

Masks and other supplies are an important part of this industry's growth. “The interfaces that go with CPAP devices tend to be the primary portion of that market,” says Callahan. And these devices are reimbursed routinely. Liken says most insurance companies will pay for new supplies every six months.

Unlike home oxygen patients, most people diagnosed with sleep disorders are below the eligibility age for Medicare, making managed care the primary funding source for CPAP treatment, which adds more possibilities for reimbursement.

As promising as the market looks, are experts finding any loopholes? Yes, according to AirSep's president and chief operating officer, Joseph Priest. “The lion's share of products sold to the sleep market today are basic CPAPs — not the upscale, sophisticated CPAPs that (manufacturers) have put a lot of features into,” he says. “For the most part, those value-added features have proved of negligible value.”

Experts Interviewed: Della Antista, director of marketing, PDS Healthcare Products, Louisville, Colo.; Mitch Barton, director of respiratory marketing, Invacare, Elyria, Ohio; Doug Bosnik, executive vice president and general manager, Western Medica, Westlake, Ohio; Roger Briese, biomedical engineering manager, Caire, Burnsville, Minn.; Justin Callahan, president, Fisher & Paykel Healthcare, Laguna Hills, Calif.; Rich Kocinski, vice president and general manager of respiratory, Sunrise Medical, Carlsbad, Calif.; Erika Laskey, director of sales and marketing, CHAD Therapeutics, Chatsworth, Calif.; Jim Liken, president, Respironics, Pittsburgh; Donald Morrow, III, president, O₂ Technologies, Richmond, Va.; Joseph Priest, president and chief operating officer, AirSep Corp., Buffalo, N.Y.; Gary Troilo, director of marketing, Pulmonetic Systems, Colton, Calif.; Christine W. Wagner, Allergy, Sinus and Asthma Professionals of Houston, Texas

To follow up with these companies, check out the complete listing in HomeCare's annual Buyers' Guide.