Answers from industry experts
Friday, June 15, 2018
RESPONSIVE RESPIRATORY
High pressure oxygen supplies
Sara Lippold, Marketing Manager
respondo2.com
What is your company’s specialty?
LIPPOLD: Responsive Respiratory is focused solely on high-pressure oxygen products. We design and manufacture products for use with oxygen therapy, including regulators, conservers, cylinders, carts and racks. Homecare providers are our largest customer segment.
How has the market for oxygen products changed during the last three years?
LIPPOLD: There has been an industry push for portable oxygen concentrators (POCs). However, when speaking with providers, we are seeing a group that endorses POCs, and a group that does not see the value. The high upfront cost creates a challenge in terms of cash flow, and the alternative leasing programs pull cash away from future opportunities. Patients with low O2 needs likely do not warrant the POC investment from a provider, and POCs cannot satisfy high O2 consumption.
Other than competitive bidding, what forces have put the most pressure on oxygen products?
LIPPOLD: Currently, raw material price changes pose the greatest challenge. Competitive bidding led to decreased pricing from manufacturers to support the providers’ decreased revenue. Now, the cost of raw materials is escalating, which will impact the market again.
How do you differentiate your products from others in the category?
LIPPOLD: We feature customized product solutions that offer value-added referral source marketing for providers.
How can HME providers realize profitability with this category?
LIPPOLD: For products, the providers should look at the value and quality of the product to last a minimum of five years, and ensure the quality will enable extended and multiple use opportunities. There is an untapped market that is willing to pay for product upgrades including higher-end cannulas (ultra-soft design), alternative carry-styles (back packs, fanny packs), as well as options to transport the cylinders securely in the patient’s vehicle.
What trends and innovations have you identified for oxygen products?
LIPPOLD: POCs are getting a lot of attention, but are limited in their output and longevity with patient use. POCs are viable solutions for newly-diagnosed patients, but as the disease progresses, these patients shift back to aluminum cylinders as the electronics are not adaptable to meet these later-stage needs. As such, the oxygen cylinder market continues to grow.
What are the key considerations patients should know about oxygen products?
LIPPOLD: Not all products are the same. An example is oxygen regulators using aluminum and plastic internal components and those only meeting a 2200psi rating.
How do you approach product development?
LIPPOLD: We look at the current market to introduce products that our customers are having trouble finding. We also look five to 10 years into the future to determine where gaps will form, and what new technology is being developed.
What tools do you provide to help educate dealers and potential product users?
LIPPOLD: We provide a full library of catalogs, literature and instruction guides for every product. Our online website is a resource for this product information. We also offer a free O2 To Go app and online web calculator to assist providers and patients in the estimation of available oxygen, given their cylinder size, device and liter flow, and fill level.
APPLIED HOME HEALTHCARE EQUIPMENT
Victoria Marquard-Schultz, Managing Director applied-inc.comOxyGo
What is your company’s specialty?
MARQUARD-SCHULTZ: Oxygen—we do anything and everything oxygen. Our reputation is that we put our providers first. We have everything a provider needs to move to the profitable smart delivery model of oxygen, including our OxyGo portable oxygen concentrators (POCs), transfill systems and resources to enter into the retail market to serve more patients.
What market segment is best served by your oxygen product(s)?
MARQUARD-SCHULTZ: We take care of providers. We do not sell direct to patients, and we strive to serve every provider with our signature service. We service, support and take care of all our customers, whether they buy once a year, or they buy a significant amount per day. We help all our provider customers look at their businesses in a new economic light by helping them to evaluate their delivery models and to make better decisions to be more profitable.
How has the market for oxygen products changed during the past three years?
MARQUARD-SCHULTZ: Medicare reimbursement data shows that the population of patients receiving oxygen therapy continues to grow in sizable chunks. The reimbursements are for either stationary concentrators, portable oxygen in tanks or for portable concentrators. Not only are we seeing the market grow overall, but we are seeing a significant shift to POCs as being the fastest growing segment within the home oxygen supply market. Baby boomers are fueling market growth. There has been a quantifiable increase of new patients with COPD and other issues that need oxygen. The pulmonologists that actually write prescriptions are becoming more aware of product choices and brand selection. There is more patient awareness of options as to how they consume oxygen, and being tethered to tanks is not high on their list of preferred choices.
Other than competitive bidding, what forces have put the most pressure on oxygen products?
MARQUARD-SCHULTZ: There is tremendous pressure to adopt the “non-delivery” model because today, equipment is not really the main cost—it’s the cost of paying drivers and the associated costs of fuel, maintenance, insurance and the like. Demand for a more mobile lifestyle while being on oxygen also puts pressure on oxygen products.
How do you differentiate your products from others in the category?
MARQUARD-SCHULTZ: We provide strong field support and education to providers and their patients. We see fewer POC service calls and maintenance issues than other POCs on the market, and we see that as a critical differentiating factor. We make POCs affordable through our OxyCare Total Advantage credit program, which allows patients to make low monthly payments, get the product they want and, at the same time, allows the provider to get paid right away. Our POCs have field-serviceable batteries and sieve beds. These can be changed by patients and require no tools.
How can HME providers realize profitability with this category?
MARQUARD-SCHULTZ: They can implement smart delivery models. Smart delivery is not non-delivery. The non-delivery model is to put POCs on every patient. Smart delivery is to use non-delivery only for patients where it makes the most sense. If providers can get customers to bring in products for service and evaluation, that’s a huge win on the cost containment front.
What are the key considerations patients should know about oxygen products?
MARQUARD-SCHULTZ: Few consumers know they have a choice in switching providers to get the product that they want. Not all POCs allow the same amount of oxygen to flow per minute, regardless of the patient’s breathing rate. Patients considering POCs need to know how to operate their POCs and not fear technical issues.
What tools do you provide to help educate dealers and potential product users?
MARQUARD-SCHULTZ: We educate providers by doing in-services, product demonstrations, webinars and the like. We provide up-to-date literature for patient use. We distribute our own magazine, Home HealthCare TODAY, to providers and patients. It allows us to educate, instruct and provide the latest health care information.