Team Up With New Oxygen Technologies

• By Deborah Cooper
• Nov 01, 2006

“I think new technology is really the way of the future, there’s no getting around it,” says Jim Byington, Mountain Aire Medical Equipment. “The provider is going to have to leverage himself so that he can afford to do it and a part of that is buying the right equipment the first time and making sure whoever he buys from will stand behind it.”

If the HME industry has been yelling, “It’s the service costs, stupid,” for several years, then the manufacturers have been listening and responding. As everyone knows, the two main developments in new oxygen technology have been realized in the form of portable oxygen concentrators and in-home transfilling systems.

When Invacare Corp. launched its HomeFill equipment in 1998, the company aimed to address the business needs of its customers: “We looked at the biggest cost component in providing oxygen and realized it was delivering cylinders. We had been doing concentrators for years. We were already providing oxygen a patient can breathe off right in their home, so why not figure out a way to bottle that so they can use it for their ambulatory needs?” explains Mike Irvine, product manager, Invacare Corp. HomeFill is designed for patients who are highly ambulatory and who typically require frequent deliveries when using traditional equipment.

Irvine points out that reliability is key to cost savings. “When we talk about a non-delivery model, one of the things I talk to providers about is that if you have to go out every two to three months to service that unit you may as well be delivering cylinders. You are not saving.” According to Irvine, every HomeFill unit goes through rigorous testing before it’s shipped out. There are no filters or timing belts involved, and the only service required is the standard service done on the concentrator every six to 12 months.

There are other systems on the market that also have the provider’s needs in mind. “The main advantage of transfilling in general is that now the provider does not need to make deliveries weekly or bi-monthly. That expense in itself will eat away all the profit for ambulatory patients,” says Jim Clement, global director, DeVilbiss Oxygen Systems.
Clement adds that DeVilbiss’ iFill Personal Oxygen Station is unique in that it can be tucked away out of sight in a laundry room or spare bedroom. That way the patient doesn’t hear it or have to have it on view in the living room.

Increasingly, no matter whether manufacturers are large or small, long established or younger, they have realized the importance of offering products that keep the provider’s bottom line in mind, while maintaining the highest clinical standards. “Providers should look for oxygen equipment that is reliable, easy to maintain and that can be quickly serviced and put back in the fleet,” says Rick Davis, VP marketing and product innovation, Access Point Medical.

Davis understands that it’s typical for many providers to have a significant number of pieces of equipment waiting to be repaired or serviced. “What we’ve tried to do is make it as easy and as fast as possible to troubleshoot, repair and get it back into service.”

The most difficult problems to fix tend to be concerned with finding leaks and these involve a very time-consuming troubleshooting process. To that end, Access Point launched the AXS-590 Oxygen Concentrator at Medtrade, which is designed to help providers reduce their troubleshooting time and costs. The unit is modular; the circuit board, compressor and the oxygen module itself pull out from the concentrator shell so they can easily be exchanged for another module and a provider can have the unit back up and running in 15 minutes.

Dealers were very much on the mind of Tom Bannon, president, Responsive Respiratory when they developed their new home filling system for portable oxygen concentrators. “We’ve had over 20-year’s experience in filling equipment for dealers,” says Bannon. The Cyl-Fil Oxygen System is designed for use with both ambulatory and in-home oxygen sources and allows patients to fill a portable cylinder “in 15 minutes or less.” The control regulator technology is new in that it will automatically shut off when full so the patient does not have to stand and watch it; or in a situation where the connection is lost, it will stop filling. The system’s valve is also unique in that the cylinder never completely empties and maintains a positive residual pressure, thereby reducing the possibility of contamination.

The benefit to dealers is the large oxygen supply cylinder, which contains enough volume to fill up to 18 smaller M6 cylinders. As Bannon explains, “the majority of the dealer’s oxygen cost is not in the oxygen but in the labor involved with filling the cylinders. So you drop off a large supply cylinder that costs about $10 to fill instead of $4-5 for multiple smaller cylinders. It also means you can cycle the cylinders regularly. There’s no need to have more cylinders back at the warehouse, which means a lower investment.”

Additionally, the system removes the need for emergency deliveries: “If the power goes out this becomes the emergency oxygen source. Now the dealer doesn’t have to make a special trip.”

Portable Oxygen Concentrators (POCs)
Anyone who glanced around the exhibit hall at Medtrade would soon have noticed the portable oxygen concentrator (POC) trend is fast becoming a common industry standard. Several new concentrators were announced at the show, joining the established players. In addition, the Department of Transportation’s Federal Aviation Administration approved three additional POCs on September 12, 2006, that may be carried on and used onboard aircraft. The new devices are: the SeQual Eclipse, the Respironics EverGo and the AirSep FreeStyle. There are now a total of five systems that air carriers may allow passengers to use. The already approved InogenOne and AirSep LifeStyle system remain approved items.

CMS also signaled its intention to reimburse this equipment at higher rates compared to stationary oxygen. Providers can now also get reimbursed by Medicare for the portable portion of their use of SeQual’s Eclipse Oxygen System.

The key saving with POCs is the reduction in the number of deliveries a provider has to make. “Now you are not making the frequency of deliveries you would have had even two years ago,” says Bernie Lambrese, senior partner, Healthcare Strategies. Offering this technology can also drive new business, he suggests. “Sophisticated referral sources such as physicians and discharge planners are learning more about the benefits of this technology for the patients. By purchasing the technology it gives the referral sources a compelling reason to use your company.”

New oxygen technology can help overcome cost uncertainties, Lambrese adds. “A dealer can’t control the cost of fuel or employee health benefits but if they invest in this technology they know what the cost is, because it’s fixed and they can plan for it and manage their cash flow.”  

With reimbursement unlikely to improve, and more likely to be squeezed even further under a competitive bidding environment, portables offer a cost-cutting alternative. Respironics just launched a new portable concentrator, the EverGo. “The advantage it brings is that it eliminates the cost that providers do not get reimbursed for in getting the patient set up to travel on their oxygen. It’s a struggle to see a return on the costs associated with taking tanks to and from airports, waiting for patients to get off airplanes, and maintaining a large fleet of cylinders. By eliminating those components, it helps reduce some of that large service cost,” says John Frank, VP and general manager, Home Respiratory Care, Respironics.

Savings Beyond POCs
POCs are important to consider but providers can still look forward to other innovations. Respironics is introducing a new stationary concentrator, for example, that incorporates a filtering mechanism, which avoids the need to frequently replace the filter. This filter is designed to last two years, reducing the extra trips and avoiding the need to maintain filter inventory. “We try to do the right thing for the patient while reducing the investment a provider needs to make,” says Frank. “It’s not just about the price alone, it’s the lifetime cost of the patients; the acquisition upfront as well as the maintenance and service throughout the life of the equipment. It’s a total cost picture.”

Liquid oxygen will also see benefits from new technology, predicts Frank. “We’ll see devices that will generate liquid in the home instead of having a truck with a liquid storage container.” These new systems aim to eliminate the need for frequent deliveries and the installation of cryogenic systems.

Meeting Providers’ Expectations
Providers have willingly adopted the new technologies to varying degrees and so far they are expressing a good degree of satisfaction. “By using the in-home filling systems we’ve increased our patient base without having to add two to three drivers and trucks,” says Jim Spellman. He believes that the idea of weekly deliveries will soon become a thing of the past: “How valuable are they if people can manage their own equipment?”

This article originally appeared in the Respiratory Management Nov/Dec 2006 issue of HME Business.