Lincare's sales efforts spark debate

Friday, May 31, 2002

CLEARWATER, Fla. - Lincare's "aggressive" efforts to woo oxygen patients from other providers has revealed a philosophical schism over what is acceptable when competing for business.

The issue surfaced in recent weeks when providers began receiving faxes from Lincare asking them to come pick up their respiratory equipment. After acquiring Med4Home, a large respiratory pharmacy earlier this year, Lincare apparently began trying to convert Med4Home respiratory-med patients to its own oxygen program.

Lincare does this by calling the Med4Home patients to confirm they need their respiratory meds replenished. Lincare then asks if the patient is also on respiratory therapy. If the patient says yes, Lincare's sales team kicks into gear, working to convince the patient to switch from its current O2 provider to Lincare.

"Before we know anything is happening, we are faxed a release of information from Lincare stating, PATIENT HAS ASKED US TO NOTIFY YOU TO PICK UP YOUR EQUIPMENT. I NEED A COPY OF A CMN, PICK UP TICKET, AND LAST BILLING DATE. THANKS FOR YOUR HELP! SHANE," said Pam Roath, director of respiratory care for Home MediService, in Havre de Grace, Md., which lost one patient to Lincare's sales efforts.

Lincare declined to comment on its sales and marketing techniques.

But providers accustomed to marketing direct to referral sources, express outrage at Lincare going behind their backs to the patient. These providers argue that "scavenging" for oxygen patients could make the entire industry look bad, particularly to lawmakers in Washington.

"Many of us feel that this kind of pull-through business is not the most ethical way to grow ones business," said a provider who asked to remain anonymous. "What we compete on is service to the referral source. Patients can be vulnerable at home and it may be preying on their confusion or lack of education."

Added Roath: "It is not right. We don't' try to steal business from other providers."

While Roath and other providers use "steal," "scavenge," "aggressive" and other strong language to describe Lincare's sales tactics, the strategy is not illegal, said Lisa Smith, a healthcare attorney with Brown & Fortunato in Amarillo, Texas.

Medicare prohibits cold-calling beneficiaries. But providers can legally contact and market to existing patients or those they've provided covered equipment to in the past 15 months, Smith said.

While Lincare's tactics may be aggressive, not all providers view them is disdain.

"There are a lot of independents that feel they can build a wall around their territory and say, 'It's mine and don't come in here," said Mario LaCute, president of Seeley Medical in Andover, Ohio. "That is not reality."

Seeley Medical trains its delivery technicians to look for inhalers when they go into a patient's home. When they see one, the tech "launches" into a presentation of Seeley's services and asks if they'd like to be contacted by the company's respiratory care department.

"We take pride in converting a customer," LaCute said. "One thing we stress with our employees is that it's so competitive today that if we haven't done something to make our service memorable or valuable to the customer in the home, that we haven't done our job, and if we lose a patient, shame on us."

Mark Sheehan, owner of Cape Medical in Sandwich, Mass., doesn't mimic Lincare's aggressive tactics, but has no problem with them. The additional competition may even be good for the patient by pressuring other providers to do a better job, Sheehan said.

What's more, if he landed 100 new respiratory med patients, and learned that 90 were unhappy with their current oxygen provider, he'd probably give them a call.

"That's pretty tempting," Sheehan said.

Joe Lewarski, director of the MED Group's National Respiratory Network, said he didn't know enough about Lincare's pull-through strategy to comment directly. But as providers struggle to grow their business "a new kind of competition may be surfacing," he said.

"Historically most HME providers have spent most of their marketing and sales efforts on referral sources and not really focusing on the consumer," he said. "But going direct to the more educated, active consumer may be another market that some companies are electing to pursue."

And that Lincare is out in front on this trend doesn't surprise industry watchers.

"Lincare is the company that people love to hate because they are highly successful," said another industry source. "They are on the cutting edge in many areas. And with their strong legal team they may be more comfortable making a decision like this than a small independent." HME