Three Trends to Track in the Asthma Industry

• By Deborah Cooper
• Sep 01, 2006

The asthma market breathes a little more deeply than some. Compared to other areas of the respiratory industry, manufacturers in this niche seem upbeat and optimistic. There are several reasons to smile, it seems. Patients have many treatment options with proven efficacy; the number of asthma disease state management programs is increasing and there may be untapped opportunities in this market for providers looking for revenue outside of Medicare reimbursement.

1. The Pediatric Asthma Market
RM spoke to Craig Bright, president, Medquip.

What is the state of the pediatric market right now?
The pediatric arena has been very good and growing. The incidences of asthma are on the rise. Our success is based on products and educating the DME dealer that there’s a large market out there in the pediatric arena. Not only can a dealer pick up respiratory prescriptions, but there are quite a lot of other products from a DME standpoint. In these times of falling reimbursements [in medications], hardware, such as the compressor, has actually maintained relatively steady reimbursement.

Why is this a good market for dealers?
If you are out there dealing with patients with COPD, who are generally adult Medicare patients, you can get under water with some of the medications the doctor may prescribe. Very few children have pulmonary disease, as much as they have incidences of asthma. We are trying to identify a market out there for the dealer where he can go in and still be profitable and not get caught up in a “We’re not going to make money on the drugs” type of situation, or “We don’t want to have to deal with billing this patient month after month because of the 15-month capped rental.” The [pediatric] business is wide-open and easy to get. There is such a need out there. Medicaid, which is generally the pediatric side of things, and other private insurances, cover these units in a purchase manner, not as a rental.

What is the most important product to carry in this market?
Many studies show that the respiratory nebulizer market is going to increase. And reimbursement has not been getting slashed on the compressors. Those dealers that are scared of the reimbursement for medication can really focus on the pediatric market. If you don’t dispense Albuterol, you can easily refer it out to someone else. There’s a very unique opportunity out there for people who want to get involved with the hardware side of respiratory, as opposed to the medications.

How will competitive bidding affect your customers?
Pediatric products are more expensive because they come with a lot of things that make it enjoyable for the child to use. If competitive bidding is based solely on price and not just features and benefits, that could be a disadvantage for the industry. But if kids enjoy using the compressor, they will stay compliant; if they’re compliant they won’t end up in the emergency room with an asthma attack, which only drives up all of our health care costs.

How do you handle compliance issues?
Anything you can put in front of a child and the physician that is a little less menacing is our goal. When I develop products, I try to put myself first and foremost, from the patients’ perspective. All the business that is going to flow out of an HME provider is generally dependent on prescription referrals; so if you can design a product that the patient is going to be compliant with, then that’s what the doctor is going to want. All of our pediatric products are designed with compliance in mind to help the dealer.

What does the future of this market look like to you?
I’m optimistic. The market is not going to get any smaller, the need is not going to go away. Unless the federal government decides to further reduce reimbursement, I think the industry, as far as the hardware side, will be healthy because the demand will be there.

As a manufacturer, what advice do you have for dealers?
We encourage dealers to understand the referral sources, to know which products are going to come out of each referral source, and then allocate his or her time appropriately to the type of business that you want to focus on.

Also, attend as many educational seminars as you can for the market. Dealers need to understand the different types of products that are available and what can be billed. There are a tremendous amount of HCPCS codes out there in respiratory. We encourage dealers to review or ask the manufacturer about which HCPCS codes are covered by the products that they carry. Just because someone gets their nebulizer, it doesn’t mean that that is the end of the revenue you can get from that prescription. We’re more than happy to talk about the information we’ve learned with our customers.

2. Improving Outcomes Data and Patient Care with Disease State Management Programs
“We need to start thinking about diseases, not just equipment,” says Harold Davis, RRT, clinical consultant, Nationwide Respiratory, VGM. “One of the problems is that we in the industry say it’s cheaper to keep patients at home, we do a good job with it, we help keep them out of the hospital and we help with follow-up care. That’s true, but the problem is we have never collected the data to prove it. With disease state management (DSM) programs we do have an avenue to collect data. They are geared toward outcomes…and we can report those outcomes. We can collect data and do papers on improvement of outcomes and cost savings.”

Last year, VGM rolled out its own DSM programs, including one for asthma. The asthma program is, “based on educating the patient,” explains Davis. “We’re using modified, therapy-driven protocols within the program. Based on the patient’s condition, there are certain levels of patients entering the program. That level helps to determine the intensity of visits the RT will make with the patient.” In other words, a patient with severe asthma will have a different kind of follow-up regimen from an RT than someone in a mild, persistent state.

“Disease state management programs are important because they allow providers to differentiate themselves in the marketplace,” adds Tom Pontzius, president, Nationwide Respiratory, VGM. “We anticipate that with more DSMs, hospital and physician visits are reduced and therefore the costs of care are reduced. They help to improve the quality of life and in some cases actually slow disease progression.”

DSM programs represent a collaboration among the physician, the patient and the HME provider. The program begins by educating the patient about the disease, such as environmental triggers for asthma in the home. The provider then follows up by testing the patient’s knowledge. The programs are also vital in generating outcomes data. “There are data sets built into the program, where the patient sits down and does a perception test; we ask how they feel compared to before, and we can measure that data,” explains Davis. “We can also take objective data such as how many times patients have been in the hospital, how many times they have been on steroids, and so on.” Then the provider can utilize both sets of data for feedback.

Another benefit of this kind of program is that it can be tailored to both the individual patient and the physician. A provider can come up with his or her own program, says Davis, or purchase a ready-made program. Then they can present the whole scope of the program to the physician and see if they will get onboard with it. The RT would begin the work with the patient.

In Davis’ experience, the focus on education and clinical follow-up does make a difference to the patient’s outcome. He also hopes that RTs can become more involved in the DME industry via this path.

3. Respiratory Drug Delivery and Non-Medicare-Related Opportunities in the Asthma Market
RM spoke to Matt Conlon, director of sales & marketing for Respiratory drug delivery, Respironics.

What is new in the respiratory drug delivery market?
Drug delivery is a small, but growing, very specialized marketplace. It is a new, emerging industry whereby device manufacturers are partnering with pharmaceutical companies to find the most appropriate device for delivery of specific medications. Companies are partnering up with pharmaceutical companies to find the right device for their drugs.

What’s driving the push to develop new respiratory drug delivery devices?
Last January, a paper in the journal Chest called “Evidence-based guidelines for the selection of aerosol delivery devices,” showed that whether you use an MDI, or a DPI or a nebulizer, all three types of technology have the potential to do the job in delivering drugs to the patient. The challenge is to find the right device and drug combo for specific patients. For example, nebulizers may not be the most appropriate device in terms of the time it takes to deliver a treatment for most patients, but it certainly is the most appropriate for young and old patients who may not have the dexterity to use either of the other devices. So our job with nebulizers in the asthma market is to create the right technologies that will do the job of delivering the drug, but also keep in mind there are patient-related factors.

What other technological developments are under way in the asthma market?
Currently, the gold standard in terms of monitoring airways for asthma exacerbation is peak flow meters. It has been a long-standing recommendation according to clinical guidelines, but there is a growing need to more precisely identify inflammation in the airways so that we are not just throwing the maximum amounts of a drug at the patient until the symptoms stop. If we had better technology to monitor the airway inflammation, we could more precisely dose the right type of drugs to pinpoint that inflammation.

Specific airway monitoring technology is being looked at, such as nitric oxide gases in the airway or specific chemical markers in the patient’s breath. The market need is there to more precisely pinpoint the airway inflammation. From year to year, these technologies are closer to meeting market needs. There may be good technologies out there to pinpoint the level of airway inhalation, but previously they were prohibitively expensive. But as costs come down, there are some exciting opportunities in monitoring.

What opportunities are out there for DME providers in the asthma market?
There are opportunities in the challenging reimbursement environment that we face today. For respiratory medications, while those reimbursement cuts mostly affect the Medicare population, it doesn’t per se affect the asthma population. DME providers are accustomed to getting a big part of their revenue through respiratory meds.

But there may be other opportunities in the asthma market for them that are less government-reimbursement dependent and more dependent on private payors or cash sales; for example, we know patients all get their meds, but a big part of asthma is controlling triggers. A lot of patients need things like bed covers that reduce dust mites, and special cleaning solutions.

We see a growing trend of pharmacies wanting to get into DME supplies, and DMEs trending toward more store-front walk-in business to attract out-of-pocket cash. It’s an underserved area in terms of the controls the patient needs. Where do they go to get bed linens or air filters? They can go online and figure things out from there, but a DME could work with that physician to be the resource for that patient to help them control the environmental triggers. If the patient can go into a store as a one-stop shop and get advice, that store could be the destination for that patient to get all their counseling. I think the physician, the patient and the DME all have an opportunity to help each other out.

What about reimbursement cuts? How is the asthma market handling those?
My sense is that the pendulum will need to swing the other way. Both the young and the old are always going to need nebulizers. CMS isn’t recognizing that need and paying for the service surrounding that need.

What does the future look like to you?
The level of challenge may be greater, but it’s one that DME providers and manufacturers have seen before, and I think together we’ll find creative ways to keep patient care as optimal as it’s always been. As a group, we need to look beyond cuts; there are other opportunities in asthma that haven’t received the level of attention that they could receive. There are ways for DMEs and manufacturers to fill an unmet need in the marketplace.

Pediatric Asthma Statistics
• Asthma is the most common chronic condition among children, affecting more than one child in 20.
• Asthma is more common among children (7 to 10 percent) than adults (3 to 5 percent).
• Nearly five million asthma sufferers are under age 18.
• Nearly half (44 percent) of all asthma hospitalizations are for children.
• Asthma is the third ranking cause of hospitalization for children.
• Asthma is the #1 cause of school absenteeism among children accounting for more than 14 million total missed days of school (approximately eight days for each student with asthma).
SOURCE: The Asthma and Allergy Foundation of America

This article originally appeared in the Respiratory Management Sept/Oct 2006 issue of HME Business.