No more skipping meds

Saturday, July 31, 2004

WINSTON-SALEM, NC - Call it the year of the palm pilot. The multi-functional hand-held device, which has recently made waves as the lynch-pin of a popular new oximetry testing program and as a script pad for physicians, is popping up with yet another HME industry application - this time as a compliance monitor for nebulizer medication treatment.

In late June, Medical Industries America agreed to start making a new nebulizer that will be electronically compatible with the PC Neb 500, a palm device made here by ALR Technologies (ALRT). The PC Neb beeps whenever the patient needs to take medicine, monitors usage of a nebulizer (not flow of medication) and reports that information via modem to physicians, suppliers or anyone else interested in the patient’s compliance.

The makers of the device says this is the first telemonitoring solution for nebulizer medication treatments and that it drives a sizable wedge into the big bugaboo of non-compliance.

“If you look at the people taking their medications on a regular basis, I’d say half - at least 50% - are not taking their four full treatments everyday,” said Ralph Spang, a senior product manager at Medical Industries America.

The costly consequences of nebulizer non-compliance are not readily available. ALRT cites a Columbia University study which shows that its reminder device boosts compliance from less than 50% of the base to 97%.

That kind of success doesn’t mean much to Medicare, which doesn’t pay for the $27 PC NEB device or its $50 modem or its services fees that range from $4 to $20monthly.

Last year, Medicare allowed charges of $75.5 million for the E0570 nebulizer. At an average of $16 for each of 4.7 million allowed claims, CMS is the payer for 393,000 Medicare beneficiaries using nebulizers.

Although Medicare won’t pay, ALRT and its marketing firm, Des Moines-based Respiratory Compliance Solutions, say the math makes sense when you factor in the value of a service component that involves a rigorous appreciation of compliance.

“Your customer is the referring physician, not just the patient,” said RCS President Frank Nelson. “About 70% of a nebulizer patients end up on concentrators, and a COPD patient generates a revenue stream of about $30,000.”