Oxygen Delivery

The Strongest Link

Although low/no delivery methods for oxygen are helping providers to survive cuts, caps and competitive bidding, how are these strategies impacting efforts to ensure solid clinical patient care?

• By Joseph Duffy
• Aug 01, 2012

Healthcare, as a whole, has been trimming down services and managing overall care ever since physicians stopped making house calls. Funding cuts, population explosion, the rising cost of healthcare services, and technological advances have made it a challenge to continue to balance healthcare costs and effective, personable clinical care.

HME providers’ transition to a low/no delivery model for oxygen is the latest example of technology allowing providers to reduce and tightly control operating costs in the face of almost perpetual funding cuts from Medicare. And it’s a trend the industry should expect to see more often. Scott Lloyd, co-founder and president of respiratory provider Extrakare LLC, says that in the current reimbursement environment, providers must explore every opportunity to control operating costs and implement those that fit with its operating model, capital resources and culture.

“With continued cuts to reimbursement, oxygen companies have to find ways to stay profitable with oxygen, thus eliminating overhead and frequent visits to patients’ homes with tank deliveries, and going to a non-delivery model,” echoes David Baxter, president of provider Medical Necessities & Services LLC.

Similarly, Kelly Riley, CRT/RCP, director of the National Respiratory Network for the MED Group, says this is a challenge her organization has been helping providers wrangle.

“We have seen the pressure of so many factors within our industry that have forced providers to step away momentarily from the day-to-day tasks of running their business,” she says. “In actuality, they have had to thoroughly analyze the costs associated with running their business. This includes taking a very close look at non-value-added services, asking themselves, ‘Are we doing this only because we always did it that way?’

“When working through an analytical process, the math always demonstrates that with patients who have ambulation outside the home more than 10 hours per week, the clear choice is to look at a limited delivery model of oxygen service,” she continues. “We at the National Respiratory Network developed an analytical process for our members to follow.”

Joe Lewarski, vice president of Clinical Affairs for oxygen equipment manufacturer Invacare Corp., says that the traditional models for providing home oxygen therapy are burdened with numerous expensive, non-value-added activities. He points out that before and after the actual delivery, there is a cascade of events that occur as part of the delivery process. This generally starts with a customer call that is followed by order processing, warehouse picking and pulling activities, driver routing, the physical delivery, return of empty cylinders to the warehouse and some type of order confirmation process.

Add to the efficiency argument that cuts, caps and competitive bidding threaten the viability of the oxygen industry, it seems the reasons behind providers transitioning to a low/no delivery model make iron-clad business sense. But what about patients? Does less interaction mean inadequate care?

Concentrator Filling Systems Lead the Way

Before answering that question, let’s first look at the technology involved. According to Lewarski, the strategies and technologies for accomplishing low/no delivery of oxygen vary by market and company, but the Medicare claims data suggest the concentrator filling systems represent the majority of the low/no delivery systems.

“The claims data suggest that the concentrator filling systems are being used ahead of POCs [portable oxygen concentrators] by a ratio of more than three to one, although the POC data may be somewhat under-represented because many patients are purchasing a POC to be used in conjunction with their primary system,” he says.

“POCs are the most desirable for patients, as it gives them flexibility that other OGPE devices do not,” says Bob Fary, vice president of Strategic Alliances at patient-direct manufacturer Inogen. “POCs allow patients to go out as long as they want, as they can charge their batteries outside the home.”

Lloyd says that for his company, one of the keys to effectively implementing non-delivery is to ensure at least 50 percent of ambulatory oxygen patients end up on a nondelivery product within 18 months to 24 months. If a lower percentage of patients end up on a non-delivery product, he says it is challenging to make the labor reductions necessary to justify the additional capital expenditures.

At the same time, employees must be trained to avoid sending delivery staff to the homes of people with nondelivery systems when possible. Office staff carry a higher load for troubleshooting and resolving problems over the phone. Management must support the staff and create buy-in with the knowledge that some staff members will be concerned the organization is reducing service levels through these changes. Lloyd says his organization is making patients more independent and helping them to solve their issues immediately (i.e., while on the phone) rather than having to wait some period of time before a staff member drives to the house.

“The strategy for accomplishing low/no delivery must begin with a consistent analytical process with the entire HME oxygen product team using the same metrics,” Riley says. “For example, what are high ambulation needs versus moderate ambulation needs? How are you matching the patient to the right device? Can you point to a flowchart or other tool that everyone in your organization uses to match the patient to the oxygen device? If asked by a physician referral source why a particular modality was recommended, can you articulate what patient assessment metrics were used in making the decision? The decisions must be strategic with the goal being geared toward improved patient outcomes.”

Enhanced Patient Care

Overwhelmingly, the experts interviewed for this article say that low/no delivery of oxygen and the technology that makes it possible does not inhibit high-quality patient care; in fact, they feel it enhances care by helping the patient in other ways.

Fary says that the level of clinical care when transitioning to a low/no delivery method does not have to change.

“Clinical visits and patient contacts can be, and are arranged, as needed,” he says. “Titrations of the POCs are regularly completed by clinicians. Delivery model employees are not clinicians, and visits by clinicians in the delivery model are done only when necessary. Non-delivery companies have developed processes that result in frequent contact or touches of patients to make up for the lack of a monthly delivery.

“And the POC technology enables and even encourages patients to get out of the home and be more active,” Fary adds. “This is a critical issue, and helps them be healthier and avoid unplanned doctor visits and hospital stays. By eliminating the high, ongoing costs of oxygen delivery, we can afford to spend more on patient care and satisfaction.”

Riley says she does not foresee any element of patient care being impacted because of low/no delivery.

“In fact, deployment of this model with a thoughtful strategy should only present gains in the patient care model,” she explains. “With this model healthcare providers are better able to enhance the independence of patients, thus improving the overall feeling of ‘well being’ of the patient as well as caregivers involved with the patient.

“As the deployment of services, such as an oxygen limited delivery model are rolled out, this presents an opportunity to drive down business costs, such as fuel, vehicle depreciation, maintenance, and gas contents,” Riley continues. “These significant savings can go toward other investments, such as clinicians making less costly phone follow up calls and collecting information aimed at issues that will reduce hospital admissions.”

Lloyd also feels that a low/no delivery method does not diminish a patient’s level of care.

“Our job is the delivery of a prescribed flow rate of oxygen to a patient,” he says. “Non-delivery systems generally provide unlimited portable oxygen so they are actually capable of supporting the clinical goals in a better way as they encourage ambulation.”

Lloyd also says he believes that because most patients most value the independence low/no delivery gives them, they prefer not to have regular in-home visits.

Clinical protocols in home oxygen therapy have always varied greatly by provider but Lewarski would argue that a well run home oxygen program that uses new technologies will be dramatically more efficient with improved care.

“Eliminating non-valued-added activities will free up resources and monies that can be re-deployed elsewhere in the businesses,” he says. “For many, clinical services are at the top of the list. Organized, well-structured and appropriately employed clinical services can drive quality and more efficiency back into the business, especially in this new environment of ACOs and hospital readmission penalties.”

“We have not had any patients voice concerns about using POCs over traditional therapy,” Baxer says. “The main issues they have are questions about battery life. They all would like to have at least five hours of battery life, which is what we supply each patient; therefore, because of the battery life concerns, patients that are on higher liter flow are not appropriate for POCs because the life of the battery does not support their portability. Overall, we have seen no decline in quality of care.”

Patient Positives

Freedom and independence top the list of what patients most enjoy about low/no delivery models. Riley says that not having to manage or constantly think about the numbers of tanks left on the porch prior to the next scheduled delivery from the HME team offers a sense of relief to patients.

“Most patients have embraced non-delivery, as they have access to new technology,” Fary notes. “Smaller POCs with longer battery life enable them to live a lifestyle that is closer to their lifestyle before becoming tethered to oxygen. ... Just because there is not a monthly delivery does not mean that the patient is not being touched.”

Lewarski says that based on his interaction with oxygen users and discussions with providers, the reactions for low/no delivery are generally very favorable. The process of ordering and scheduling portable oxygen has always ranked high in patient complaints and frustration. Ordering portable oxygen and waiting for delivery often led to patients rationing their portable oxygen and in some cases, being non-compliant to therapy.

“One of the most commonly voiced patient concerns is having enough portable oxygen for their daily activities,” he says. “So in that regard, quality of care and quality of life for oxygen users is arguably better. I think it’s important to differentiate delivery from care, as they are not the same.”

A positive patient experience points to adequate patient education, says Riley, the intent of which is to demonstrate why a particular device is a better match for that particular patient. Once patients understand and have been empowered with education and knowledge, they then become part of their “care team” and not just a casual observer.

Although patients seem to be embracing low/no delivery methods, changing existing patients from one system to another is always challenging. Lloyd says that in his experience, most patients prefer whatever system they first receive and there is natural reluctance to change. Lloyd recommends avoiding a large-scale conversion of existing patients and using new equipment on new patients.

In that regard, Fary says new low/no delivery products have actually caused providers and patients to get closer in the initial stage of the relationship.

“There is more emphasis on matching the patient’s needs to the product because there are so many differences between the non-delivery devices,” he says. “We certainly get to know our patients and their needs as we ensure the product they use meets their lifestyle and clinical needs.”

Provider Challenges

Education is as important to providers as it is to new recipients of a low/no delivery method.

“The No. 1 challenge I’ve seen with providers is not understanding the limitations or proper use of limited flow devices, a.k.a., pulse dose conservers/technology,” MED Group’s Riley says. “For years we’ve been instructing on the need to titrate the patient to the device to ensure adequate oxygen saturation is being achieved. I had a supplier tell me recently that a device delivered six liters a minute. That was not the case at all.

“It is not acceptable to find the first device that is in the warehouse and distribute to the patient,” she continues. “Some devices while very ‘cute’ simply do not provide enough oxygen to certain patients. The HME can lose credibility quickly when you have a physician who is educated on these devices and understands and the patient oxygen saturation level falls too low, resulting in a visit to the emergency room or doctor’s office.”

Anthony Anzalone, vice president of Global Marketing at Inova Labs, points possible solutions to challenges brought on by transitioning to low/no delivery methods:

• Most manufacturers offer financing terms that help offset payment for new technologies with receipt of new rental revenues. The net effect is positive cash flow while transitioning into a non-delivery model with a POC.
• Existing assets can yield incremental capital to providers through their liquidation or accelerated depreciation during the transition to non-delivery.
• Some POC makers offer extensive warranties that help limit the total cost of providing oxygen to patients by limiting the service risk to providers.

Finally, Lewarski points out that a low/no delivery method can help overcome a lack of service funding.

“The clinical and care challenges faced by HMEs are not necessarily related to the type of oxygen technology being used but the lack of funding for HME-based clinical services,” he says. “Since there is no direct reimbursement for oxygen and other HME-related clinical services, many HMEs have subsidized their clinical programs from their operating profits. As reimbursement and margins are compressed, there are fewer financial resources to support non-reimbursed activities. I believe the low/no delivery oxygen models can eliminate many of the non-value-added costs, and as I stated earlier, be used to support clinical services.”

This article originally appeared in the Respiratory & Sleep Management August 2012 issue of HME Business.