Airgas helps providers crack liquid O2 market

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Thursday, September 30, 2004

RADNOR, Pa. - Airgas, the nation’s largest distributor of specialty gases, quietly launched a curbside, liquid oxygen refilling service three years ago that, by the end of June, was servicing 2,500 home oxygen patients.

That number is rising significantly as the desirability of lightweight liquid portability spreads and smaller HMEs decline to make the large capital and regulatory investments needed to sustain a liquid O2 business.

“I’m worried about the FDA, and I don’t have $30,000 to invest in equipment,” said Tim Arceneaux, vice president of sales and operations

at Littleton Respiratory Homecare in Wilmington, Ohio. “But one of our patients asked for liquid, and it makes sense to convert five others because they’re high users.

Like many suppliers who’ve signed on to Airgas’s Puritan Plus program, Littleton will lease Puritan Bennett’s Helios liquid oxygen systems from Airgas. Littleton will be responsible for billing the DMERCs for the oxygen reimbursement.

(Airgas acquired Mallinckrdot’s medical gas business, Puritan Medical, in January 2000. Puritan Bennett is a division of Mallinckrodt.)

Leasing the equipment and paying for the refills means that Littleton earns about 20% of the return on a typical oxygen patient. But, said Areceneaux, the relationship also decreases the level of stress.

“What we’re really solving here is a headache for the homecare provider,” said John Bookhouts, a marketing manager for homecare at Airgas’s Puritan Medical division. “When you’re handling liquid, you’ve got Hazmat [hazardous materials] materials issues at the Department of Transportation. You’ve got FDA issues. We’ve got that covered, and we follow JCAHO guidelines.”

Puritan Plus counts Cinncinnati, Miami, Atlanta and Albuquerque as the program’s strongest markets. In all markets, Puritan Plus is running a total of 45 liquid oxygen trucks. On April 1, the program’s infrastructural viability was enhanced by a new, integrated approach to the marketplace by Airgas and its Puritan Medical division.

“Puritan Medical used to be in 35 medical locations only,” said Jim Ely, vice president of corporate communications at Airgas. “Now, , Airgas Puritan Medical can really use the full strength of Airgas’s 600-plus branches, 2,500 delivery vehicles and more than 1,000 sales people on the street who can help the medical sales teams spot those possibilities.”

Much of the demand for Airgas’s Puritan Plus curbside filling service has been fueled by Puritan Bennett’s Helios television advertising campaign. (See sidebar) For smaller dealers, the Puritan Plus program is an attractive proposition from Puritan Bennett’s perspective.

“This is a solution where you get [Puritan Bennett] equipment and you outsource the filling and any issues to someone who is an expert,” said Raj Roychoudhury, group marketing manager at Puritan Bennett. “You stick to what you are best at, which is managing parents and doing respiratory therapy.”

Puritan Bennett is actively working with Airgas to develop this curbside refilling program. Lifegas is a Norcross, Ga.-based medical gas company that also provides liquid refilling in patient homes.

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