Many questions in wake of ResMed-Brightree deal

Friday, March 25, 2016

YARMOUTH, Maine – When two companies as big and different as ResMed and Brightree merge, there’s more than likely going to be an impact on their HME provider customers, the majority of respondents to a recent HME Newspoll say.

Sixty percent of respondents expect the mega deal to affect their businesses, some say in good ways and some say in potentially concerning ways.

“Mergers and acquisitions have become common in our industry,” wrote John Reed, CEO of Walnut Medical Services. “We have relationships with both Brightree and ResMed. We’ll wait and see.”

ResMed announced plans to buy Brightree for $800 million in February. Sixty percent of respondents said they were shocked by the news.

Some respondents, most of them customers of one or both companies like Reed, expect the deal to result in more streamlined and efficient products, and better integration between products.

“If there’s any effect at all, due to our relationships with both Brightree and ResMed, I hope it would be positive,” said Deb Swaim, a manager at Riverside Health Equipment.

But just as many, if not more, respondents have concerns. One of the most frequently cited: That ResMed now has access to pricing information.

“Having access to Brightree means that ResMed will have the ability to set our pricing using factors not always available, such as our reimbursement, total items bought and their competitors’ prices,” wrote one respondent.

This is a reason the deal even has some customers of both companies feeling uncomfortable.

“We’re Brightree users and ResMed buyers,” wrote Lori Sears, owner of Active Home Medical. “I can't imagine how the deal would be worth it to ResMed if they didn't plan on using that information to their advantage somehow.”

More concerning for others: Will access to pricing information, as well as patient data, set the stage for ResMed to sell directly to consumers?

“Look at ResMed’s acquisitions of late: Jaysec, CareTouch, Inova and Brightree,” pointed out one respondent. “They have the document management piece, billing system, re-supply and oxygen. They’re only missing the delivery piece to go direct to consumers. It may not happen in the next 10 years, but they are aligning the stars.” 

For some respondents, the concerns are more immediate and practical. Will the deal force them to change products and services?

“I’m worried this will steer Brightree to becoming exclusive with ResMed, and affect our relationship and integration with other vendors,” wrote one respondent. “As someone who primarily doesn't use ResMed, I am not a fan of this at all.”

Another respondent added: “I’m also concerned about the ability to maintain our current business relationship with Philips Respironics in the long term, given that at some point in the future the connectivity between Encore Anywhere and Brightree could be eliminated, or ‘taxed’ by Brightree, making it financially burdensome.”

Regardless of its impact on HME provider customers, some respondents acknowledge this is a smart move by ResMed in a highly competitive and quickly changing healthcare market.

“This vertical integration gives them the ability to be flexible and to scale to take advantage of new healthcare value-based models if the opportunity presents itself,” the respondent wrote. “They have the ability to present themselves as a solution at a much higher level than they ever could have being an equipment manufacturer.”

ResMed, in a statement to HME News, said, “Our customers can rely on Brightree and ResMed to do what we say we’re going to do,” including safeguard patient data and pricing information. To read the full statement, click here.