At first glance, the orthotics market might seem congested with competitors. Mass merchandisers, drug stores and home medical equipment providers all supply these products. But much like the ankles, wrists and feet they help to strengthen, manufacturers say that orthotics can support — and help to grow — an HME company's revenue stream.
Those working in the market say the aging and active population has created a growing pool of customers seeking such products. And, “orthotics fits well with retail and reimbursements,” says Tom Traver, vice president of sales and marketing for Swede-O.
Cash is King
Orthotics are a way to increase sales revenue, as the product lines — at least currently — do not seem to be affected by competitive bidding, according to Rhonda Newman, vice president of marketing for FLA Orthopedics. (See accompanying sidebar.) At April's Medtrade Spring in Las Vegas, Newman says she saw many HME providers looking to put up retail orthotics and softgoods displays in their stores as an avenue to shore up revenues outside of reimbursements, as about 80 percent of these products are sold as cash items.
“For products under the $100 price point, we see dealers moving away from reimbursements [to more cash sales] where they don't have to mess with the paperwork,” she explains.
And for those getting into retail, it makes sense to increase shelf space for braces, wraps, splints and like products, Swede-O's Traver says. “It's a relatively easy sale for HME dealers as opposed to some of the other products they sell such as beds, oxygen and wheelchairs. It doesn't require an enormous amount of time and effort to fit patients, and there's not a whole lot of follow-up that needs to be done after the fact.”
Additionally, the customer base seeking such products is growing.
Active and Aging
As baby boomers age, the market is becoming even riper for orthotics, manufacturers point out. Seniors seeking to remain active often look for ways to self-medicate their minor aches and pains.
“They're not looking for their doctor to scrip something for support for warmth and relief,” Newman says. “More and more people actually are coming in looking for supports to keep active in exercise programs and to maintain their quality of life.”
Drew Gallagher, pedorthics director for Sroufe Healthcare Products, agrees. “I don't know how many baby boomers are set to retire, but it's in the millions,” he says. “That's a big population for us.” Add to that the increase in patients suffering from such diseases as diabetes, arthritis and obesity, and manufacturers see the market supported by a multitude of growth drivers.
“Right now there are between 17 million and 21 million diabetics in the country, and that's a growing figure,” Gallagher says, noting that orthotics used to prevent blisters and infections can prevent worsening of diabetic foot conditions.
The growth in diabetes is also spurring sales in compression hosiery and shoes, Newman adds.
Further, the stream of injured soldiers coming home from Iraq in the news and the high profile of Hollywood figures such as Heather Mills, who recently appeared on ABC's “Dancing with the Stars” with a prosthetic leg, are heightening the acceptance of orthotics and prosthetics.
“A lot of people know someone in their community who is an amputee,” Gallagher says, pointing to the increased awareness in leg bracing and support. Whatever the ailment, he says, orthotics providers benefit because the “couch-potato mentality” is less acceptable today.
Treatment Trends
As orthotics become more sought-after, there is increased interest in both custom-fitted devices and prefabricated, off-the-shelf products, according to Alan Finnieston, president of Maramed Orthopedic Systems.
Prefabricated devices tend to be ancillary products that patients typically use for a short interim lasting a few weeks to up to six months, he explains. With custom-made devices, referring physicians and clinicians want to make sure the product sophistication that is necessary for their patients is provided. In both segments, new technologies are improving the products, Finnieston says.
For example, with custom-made devices like Maramed's Biosculptor, providers can now use CT or MRI scans of the body segment that needs support to create a three-dimensional model. That model then is used to create a well-fitting orthotic, Finnieston explains.
Sroufe's Gallagher also notes more accurate images are helping to generate detailed and better-fitting products. His company uses a digital foot scan to create a computer analysis and then carve an orthotic that more accurately fits the customer.
More durable materials are another factor that is improving products available in the market, whether they are prefabricated or custom. For instance, orthotics created from heat-molded polyurethane are more durable and don't crush down and compact, Gallagher says. For active customers and athletes “pounding the streets during practicing and training, the product always rebounds to the same level,” he says.
Material advances are also improving the product benefits. Silver and copper, which are believed to have healing properties, are being woven into some fabrics, for example.
FLA's Newman adds that product materials are constantly improving to boost users' comfort and patients' recovery. “Anything that's used in consumer fabrics eventually makes its way to orthotic products,” she says. “We're seeing more use of spandex and thin and lightweight materials that are big in sports apparel are being used more in orthotics. The trend is toward lighter weight and breathable products.”
Swede-O's Traver agrees, noting that fabrics that prevent sweat buildup also are finding favor with customers. Products that provide heat as well as bracing support are growing, too, “so you're not just putting a splint on someone for carpal tunnel syndrome, you're also providing heat therapy,” he notes.
Maramed's Finnieston said he's seen carbon fiber and polypropylene devices that make the products more dynamic. In only one example, he explains, because of the nature of new materials, products can better assist the ankle-foot system for stroke patients who can't pick up their foot when they walk.
Not Self-Serve
Because of such new technologies, customers today might need more education on orthotics than they have in the past, although the products are still a relatively simple sale, manufacturers say.
Many customers may conduct initial product research on the Internet, then seek additional help at the time of purchase, said Christine Voet, product manager for the Airway division of Surgical Appliance Industries.
Traver echoes those sentiments, noting that once customers do their own research, they then go into a store to make sure they get the right product and fit for their injury.
But it also can work the other way, experts point out. Customers may go into a store to research products and fit, then buy from the Internet to find the cheapest price. Working with local clinics can shore up business from referral customers and prevent the Internet drain-off, as well as help providers “to be more in tune with providing orthotics,” Traver adds. Manufacturers also say providers who want to build this business should make sure these products have a presence on their own Web sites.
Newman adds that her company regularly receives requests to provide in-service training and, consequently, offers continuing education online.
“We've noticed retailers are being more proactive in trying to educate their customer base,” she says. It's not unusual for potential purchasers to be able to walk up to an interactive display to watch a video, or get information from pamphlets or a touch-screen kiosk, she says. “We see a lot more interest in people looking for fitting information and training.”
In addition to providing point-of-sale education, providers can stay informed themselves — and in turn inform their customers about products and fit — by working with specialty clinics and physicians. Not only will this help to better understanding of the products available, but working with local physical therapy clinics and physicians can also help in cultivating referral sources, Traver says. “Most referral sources don't want to provide orthotics; they want patients to be fitted at another location.”
Despite the time needed to help fit a patient with an orthotic, the effort can pay off, these manufacturers say.
“Overall, the orthotics market is growing because the baby boomer generation is aging and more active in life than previous generations. They're still playing golf, basketball or whatever the sport may be,” Traver points out. The fact is, he says, “they're going to get more soft tissue injuries and need more orthotics to treat them.”
Mum's No Longer the Word on Breast Forms
Years ago, when a woman had a mastectomy, she kept that information close to her chest. But thanks to growing public awareness of breast cancer survival and progress, mastectomy products have evolved as well.
According to Christine Voet, product manager for the Airway division of Surgical Appliance Industries, today's mastectomy products have become a segment of opportunity with new breast form shapes available.
“The market initially started with solid silicon forms,” she explains. “With different types of surgeries, there have been some new developments with lighter-weight silicon, different sizes and uniquely shaped products for partial surgeries.”
A patient who has had a partial surgery instead of a full mastectomy, for example, now may choose a smaller breast form in a variety of shapes, including oval and even hexagon designs. Some customers may want a custom-made product or to choose from new options in weights, looks or colors to match their skin type.
Another growing category of customers for these products are men, who may use a partial fill-in form to create a natural look after a lumpectomy, Voet adds.
In all cases, customers generally have some knowledge about products, but often turn to a sensitive salesperson for the actual purchase. Older customers — who may not have done any product research — may still need a lot of education on breast forms, Voet says. And while younger customers might be far more proactive in educating themselves, they are still looking for a comfortable setting in which to buy the product.
“This used to be a hush, hush thing,” Voet says. “I think society has changed in terms of acceptance.”
Nevertheless, what HME providers should remember, Voet emphasizes, is that the process of buying a breast form has to be “positive, uplifting and helpful with a person's self esteem and image.”
O&P ‘Fares Well,’ According to Alliance
Medicare's competitive bidding program will not include off-the-shelf orthotics until at least 2009, and because prostheses and custom-made orthoses are excluded by statute, no orthotic or prosthetic devices will be included in the DMEPOS bid program's first round.
But according to the Orthotic and Prosthetic Alliance, a coalition representing the orthotic and prosthetic profession, the definition of “off-the-shelf” could present a problem if CMS adds these products to its second-round bid.
The alliance notes that the competitive bidding rule defines “off-the-shelf orthotics” as “orthotics described in section 1861(s)(9) of the [Social Security] Act that require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling or customizing to fit a beneficiary.”
However, the group points out on its Web site that “minimal self-adjustment” means “an adjustment that the beneficiary, caregiver or supplier of the device can perform and does not require the services of an orthotist certified by either ABC or BOC, or of an individual with specialized training.”
Calling the definition a “double-edged sword,” the alliance says, “on the plus side, CMS has explicitly recognized the importance of ABC/BOC certification as a measure for more complex orthotic and prosthetic care, but at the same time, this definition also potentially expands the types of orthoses that may be considered ‘off-the-shelf.’”
When originally proposed by CMS, the definition did not include the phrase “or supplier of the device,” the alliance notes. However, in the final rule, the wording was added, thus expanding the list of devices that could be included in the off-the-shelf category.
Even so, the alliance says,O&P “fares well” under the final rule.
The alliance includes the American Academy of Orthotists and Prosthetists (AAOP); the American Board for Certification in Orthotics and Prosthetics, (ABC); the American Orthotic & Prosthetic Association (AOPA); and the National Association for the Advancement of Orthotics and Prosthetics (NAAOP).
Experts Interviewed:
Alan Finnieston, president, Maramed Orthopedic Systems, Hialeah, Fla.; Drew Gallagher, pedorthics director, Sroufe Healthcare Products, Ligonier, Ind.; Rhonda Newman, vice president of marketing, FLA Orthopedics, Miramar, Fla.; Tom Traver, vice president of sales and marketing, Swede-O, N. Branch, Minn.; and Christine Voet, product manager, Airway division, Surgical Appliance Industries, Cincinnati, Ohio.
Orthotics Trends
- More shelf space
A decade ago, the typical HME provider devoted perhaps 5 feet of wall or shelf space to orthotic products, but with the strong growth of these products in the HME channel, that space has doubled. Manufacturers say it is not uncommon for active providers looking to build business in orthotics to give 25 or 30 feet to these products.
- Looking for help
With more educated consumers taking control of their own health, these customers are asking questions and looking for guidance in understanding which orthotic products can help their individual conditions. Manufacturers note that point-of-sale materials such as printed brochures can work as good sales aids. In addition, working with local clinics and physicians who specialize in this area can also help to build a referral customer base, as well as keep providers informed on treatments and market advances.
- Materials and design
Materials used in the design of softgoods and orthotics have opened up new options. Lighter-weight composites and plastics make products more comfortable, which leads to better patient compliance.
