Despite 'hiccups,' POCs poised for growth

Tuesday, June 22, 2010

Even manufacturers concede that portable oxygen concentrators aren't perfect technology yet, but their impact on the market is profound and should remain a potent force in the years ahead.

Chris LaPorte, product manager for portable oxygen concentrators at Elyria, Ohio-based Invacare, says new technology "hiccups" have been part of the POC growth curve, but that "compared to three years ago, this technology has come a long way."

Issues with battery life and overall reliability are definitely valid, he said, but that's nothing that can't be improved with time.

To be sure, the POC market is still in its infancy and the various glitches are "teething problems," said Kenth Drott, head of markets for Atlanta-based LifeGas.

"This is to be expected with new technology," he said. "When POCs are as reliable as laptops, then the real revolution will take place."

Although reliability remains an issue for POCs, it's only because the technology hasn't had enough time to prove itself, asserted Ron Richard, president and CEO of San Diego-based SeQual Technologies.

"Long-term reliability is something that is yet to be proven because the devices have only been on the market since 2006, but from early indications, (our) Eclipse can be used and has been used on thousands of patients as their only source of oxygen," he said. "The internal workings of the device use the very same components as a stationary concentrator, so the notion of the systems not being capable of being used 24/7 is becoming a thing of the past."

Robert Jacobsen, vice president of Buffalo, N.Y.-based AirSep's Medical Products Division, sees no reason why the POC market can't continue to be the fastest-growing segment of oxygen therapy, but he adds that providers need to assess each patient's condition to determine which unit is most appropriate.

"Oxygen patients are extremely sensitive to the weight of POCs and lighter units provider greater patient acceptance," he said. "Wearable POCs--less than 5 pounds--are in the most desirable class. Transportable oxygen concentrators (TOCs) can supply both pulse and continuous oxygen delivery, but they are substantially larger and heavier than wearable POCs, so carts are necessary for moving these devices. Since COPD patients are not using continuous flow during ambulation, TOCs burden the oxygen user with unnecessary weight."

Cost obstacle

If there's one primary growth inhibitor for POCs, manufacturers agree that it's a higher acquisition cost. Despite the device's ROI potential, many HME providers are continuing to balk at the purchase price.

"Some providers are reluctant to jump too early on the new technology bandwagon considering the quality and reliability of the devices up until now," Drott said. "They reason, 'Why should I invest in these devices that are less reliable and will be obsolete as soon as new innovations are introduced?'"

Moreover, providers are using a number of models to calculate an ROI for the devices, Richards added.

"The faster payoff is, of course, viewed in a more positive light," he said. "Adopting low- or non-delivery modalities in long-term oxygen therapy can be more expensive upfront, but in the mid- to long-term, it's actually less expensive and has a much better ROI compared to older technologies."

Reimbursement outlook

With competitive bidding looking like a certainty, but minus specific details, its impact on the POC modality is up in the air, Richard said.

"Yet oxygen generating portable equipment systems will play an ever-increasing role in the global homecare markets," he said. "Technology such as this can help providers do more with less and streamline their business models, but only if they know their true costs and take the necessary steps to convert their patients sooner rather than later."

Currently, POCs and transfilling systems have a higher reimbursement rate, but Drott doesn't expect it to last.

"Unless the new technologies really offer something unique, I don't see a reason to have higher reimbursement for POCs long term," he said.

LaPorte agrees that reimbursement will eventually decline for POCs.

"The issue will become how the reimbursement pie is split up," he said. "It stands to reason that non-delivery solutions will see a bigger piece of the reimbursement pie at the expense of stationary systems."