Business Solutions

Soliving the Oxygen Puzzle

Respiratory providers are facing a difficult challenge: How do you cut operating costs and still provide therapy that ensures good patient outcomes and compliance?

• By Joseph Duffy
• Dec 01, 2012

Over the past five years, most, if not all, HME oxygen providers have experienced some type of “rightsizing,” a positive label for the process of changing a business model (laying off employees, implementing new technology, outsourcing, etc.) in order to survive difficult economic times and better compete in the marketplace.

It may not seem different from what any other American business has been doing in response to an economic downturn, but when you are in an industry in which business changes can adversely affect patient care, there is tremendous pressure to be competitive while offering patients the best possible standard of care.

How providers are cutting oxygen costs

“Hindsight, as they say, is 20/20,” says Bob Messenger RRT, CPFT, FAARC, Invacare, Manager of Respiratory Clinical Education. “Historically CMS has established a pattern of reducing reimbursement for long-term oxygen therapy. Savvy providers that took note of that pattern realized years ago that they needed to reduce their operational costs. Many of those providers embraced oxygen-generating portable equipment (OGPE), such as transfilling concentrator/tank systems and portable and transportable oxygen concentrators. These devices offer a win-win for the patients and the providers. Patients have an unlimited supply of portable oxygen, while delivery costs are all but eliminated for the provider. For the early adopters, this has paid huge dividends. Even in the face of the 36-month cap and national competitive bidding (NCB), early adopters have been able to continue to provide their patients with clinical support. In fact, many providers are ratcheting up their clinician training of patients in an effort to reduce hospital readmissions and garner preferred provider status with referring hospitals.”

Messenger points out that providers who remain heavily invested and fully committed to the traditional model of delivering cylinders have taken a variety of steps to reduce costs. Some are delivering more cylinders at a time to reduce delivery frequency. Some are establishing policies that limit deliveries, or require patients to come to their location to obtain additional cylinders that exceed an allotted quantity. Others are simply establishing a policy that limits patients to a set number of cylinders.

Maureen Cooper, RN, Director of Regulatory Affairs and Performance Improvement at HomeCare Concepts, says that although the oxygen industry is going through the most challenging times she has ever seen, HomeCare Concepts has made strides to keep the business strong. These include staffing the most knowledgeable, skilled employees; rightsizing departments; increasing staff education; and ensuring the staff is accountable.

She says the most common ways providers are cutting costs include routing of oxygen to specific geographic areas on specific days and assessment of the systems that are being used to ensure the most effective model of oxygen delivery.

Scott Wilkinson, Executive V.P., Sales and Marketing, Inogen, says his company is seeing a lot of interest in technology to reduce expenses, but that oxygen providers seem to be in the educational phase right now. They are trying to understand how key business model changes can impact their results, such as conversion to a non-delivery service model and automation of phone systems, patient touch and communication mechanisms, etc. But these items generally require up-front investment and fundamental business changes that providers are not ready to execute when they have the uncertainty of competitive bidding hanging over their heads.

“I do believe these business model changes will accelerate significantly once Round Two of competitive bidding passes (or is replaced by MPP),” says Wilkinson. “These investments and business changes will be absolutely necessary for providers to survive in the future.”

Providers can consider cutting costs by examining operations for areas of inefficiency. Miriam Lieber, President, Lieber Consulting offers the following questions for providers to ask of their company:

• Do you have RTs doing non-RT work?
  In other words, are clinicians required to perform all the duties they are currently performing? Check state respiratory care law to learn about your state’s requirements. If a clinician is not necessary for delivery and setup of equipment, have a technician do it with clinician oversight.
  
  
• Do you rank your patients?
  If not, consider setting a standard of high-, medium- and low-maintenance patients. Establish a standard protocol for each level. Whereas a high-maintenance patient might receive a phone call, a low-maintenance patient might not receive one as part of standardoperating procedure.
  
  
• Do you really need to deliver refills to all of your oxygen patients?
  When oxygen patients require refills, invite them to pick up equipment at the office. Given the surge in gasoline prices, in addition to the costs associated with delivery, some providers only stock portable oxygen concentrators despite the extra up-front expense. Still other providers prescreen patients and, based on their findings, may or may not deliver a portable concentrator (e.g., distance from the office, agility). Regardless of how you dispense your oxygen systems, you should develop standard operating practices for which equipment to dispense when.
  
  
• How often do you perform maintenance on oxygen equipment?
  Finally, when creating a protocol for how often to visit your oxygen patients, use the manufacturer’s guidelines coupled with Medicare requirements. In other words, if the patient has been renting the equipment for more than 36 months and they are due for maintenance, you will need to visit the patient (at the appropriate interval) in order to bill. While some companies use the patient visit as a PR advantage, others consider the astronomical costs of visiting each patient more often than is absolutely necessary. Rather than run out to the home, they first try telephonic troubleshooting efforts, such as a standard checklist of questions/possible issues when they receive a call that equipment isn’t working properly. They visit only when absolutely necessary.

“As you can see, providers are using varied techniques to reduce costs associated with caring for oxygen patients,” she says. “While they still give superior service, they have had to redefine ‘superior service.’ The real question is how much service can you afford when you exhaust your resources contending with Medicare’s prepay audits for all oxygen patients? Most providers have been left little alternative but to employ one or more of the tactics listed above.”

The Value of Equipment, Interaction

Messenger says that at the 2011 American Association for Respiratory Care (AARC) Congress in Tampa, FL, there were multiple presentations and papers that demonstrated that DME providers can have a profound impact on reducing COPD patient readmissions. What all these DME-based programs had in common was a commitment to OGPE technologies and multiple patient touches during the first month of therapy.

Patient contact took the form of in-person visits, telephone contact and supportive written materials. In-person visits were all conducted by clinicians and included not only training on equipment, but also education on what COPD is, nutritional information, the importance of activity and compliance with the oxygen order and how patients can recognize if they are getting worse and what actions they should take. Telephone contact was made in some cases by clinicians, but in others by office staff using prescripted questions and trained to recognize responses that are red flagged for follow-up by the clinical team. All of these providers also recognized that tracking patient outcomes gave them hard data that the marketing staff could take back to their referring hospitals as evidence of their ability to support the hospital’s objectives.

David Baxter, President, Medical Necessities, has cut costs by implementing a delivery tech manager who makes sure every patient is seen for tanks and evaluates tank usage and frequency.

“We also have a dedicated therapist who contacts oxygen patients after initial setup to go over their experience and expectations about oxygen,” Baxter says. “In addition, we identify how active or portable patients are to evaluate what system/technology would best fit them. We use a questionnaire to get patients on a system that works while eliminating unnecessary trips to areas we are not in all the time. This has worked great to help outcomes (keep patients active and out of the hospital).”

Patient compliance

According to Messenger, you can’t get patients to stay compliant when you cut clinical/educational services.

“There is just too much evidence that supports the positive affect that clinician training has on outcomes,” he says. “Conversely, a lack of clinician education will lead to poorer outcomes. Please note that I am referring to education here, not training. Education implies that patients are being taught about their disease and being given the knowledge they need to manage their condition and improve their outcomes. Training on the other hand is just simply ‘here’s how to turn your concentrator on, here’s where the filters are, how to reset the alarm, etc.’ In the long-term, providing training will continue to meet the requirements, but providing education will improve outcomes and grow a business.”

For Wilkinson, he says that patients are actually becoming more compliant rather than less, but that it’s driven by Medicare audits and not reimbursement cuts.

“Medicare has really increased patient scrutiny through the audit process regarding oxygen compliance and regular physician visits,” he says. “We are all putting much more emphasis on patient education and documentation in this area and its flowing out to the physicians as well. Everyone through the continuum of care is more informed and more focused regarding compliance, including patients.”

Wilkinson has been a champion of the non-delivery oxygen service model for over 10 years, and says he has witnessed (and helped) many oxygen providers change their businesses through adoption of hometransfilling devices and POCs. Wilkinson says that with proper execution and phase-out of the old delivery model, providers have realized lower total service costs and improved patient satisfaction and outcomes. In addition, patients are more active and more compliant with devices that provide unlimited portable oxygen; they use their oxygen regularly instead of “saving those tanks” for the next storm. They are able to get out of the house and go if they want, and studies have shown more active patients are hospitalized less and live longer, he says.

“I am a firm believer that better service equals better compliance, so conversely, I don’t think providers can cut services without hurting compliance,” says Wilkinson. “But I am also a firm believer that lower service costs do not necessarily have to equal lesser services. Technology can be used to reduce service costs while improving service — non-delivery approaches using OGPE, educational videos, etc., are examples of technology solutions that reduce costs and improve service.”

In theory, getting patients to take a greater ownership of their therapy should help them remain compliant to treatment. Wilkinson says that if you want patients to take ownership of their therapy and help themselves, you have to give them equipment that falls in line with this approach.

“OGPE fosters independence and puts patients in control,” he says. “Patient access to these newer products, such as POCs, is essential to patients taking control of their care. Conversely, it’s difficult to expect patients to take control of their therapy if they are dependent on someone else to provide the therapy, such as tanks and LOX.”

Messenger says that 90 percent of COPD is a result of cigarette smoking, a lifestyle choice, and that the typical age range when someone is started on home oxygen is 66 to 82 years old.

“It’s very challenging to get someone who is sick and elderly to change his or her behavior,” he says. “Unless there is an incentive, few will. Unfortunately, aside from their own health, patients have no real skin in the game. If patients were held financially accountable to change their behavior, such as facing increased deductibles or co-pays, we would likely see better compliance.

“The best way to appeal to anyone whose behavior you want to change is to answer the question, ‘What’s in it for me (the patient)?’ Messenger continues. “Clearly nobody wants to feel sick. So educating the patient about their disease, what will make them feel even worse (continuing their behavior) and what will help them feel better (changing their behavior) is a good place to start. Enlisting the support of a spouse, family member or friend can also go a long way. These people may be providing support, but they certainly don’t want to add to the current level of stress by needing to provide even more care if the patient gets worse. They clearly have an incentive to see that the patient complies with therapy. Include them in the training and education. Knowledge is power.

“By teaching patients and their caregivers how to manage their COPD, providers become active members of the healthcare team and give patients the tools they need to improve their outcomes and enhance the quality of their life,” he explains. “What’s in it for providers? An opportunity to grow market share by aligning their services with the needs of their referral sources as well as an altruistic sense of doing the right thing.”

Regardless of all the turmoil faced by oxygen providers, all the cuts and caps that might you question why you are in this business in the first place, Cooper reflects on the following set of principles, which have been attributed to everyone from L.L. Bean’s Leon Leonwood Bean, to Studebaker Sales Vice President Kenneth Elliott, to Mohandas Gandhi, but ring true regardless of who said them:

• A customer is the most important person in our business.
• A customer is not dependent on us; we are dependent on him.
• A customer is not an interruption of our work. He is the purpose of it. We are not doing him a favor by serving him; he is doing us a favor by giving us an opportunity to serve him.
• A customer is not an outsider in our business; he is our business.
• A customer is not a cold statistic; he is flesh and blood, a human being with feelings, likes and dislikes.
• A customer is not someone to match wits with, or try to outsmart.
• No one ever won an argument with a customer.
• A customer is a person who brings us his wants. It is our job to handle his requirements so pleasantly and so helpfully that he will return again and again.

This article originally appeared in the December 2012 issue of HME Business.