Oxygen remains stationary
Although oxygen technology and portable systems continue to advance and make gains in market share, standard stationary units remain the main source of revenue for respiratory providers.
Manufacturers report that stationary systems, above all others, still comprise the bulk of the oxygen business, with approximately 85% of Medicare claims.
“While there are many companies currently positioning themselves with portable units, the ratio continues to lean to the stationary units,” said Lawrence de la Haba, senior vice president of homecare business development for Atlanta-based Graham-Field. “While the portable units do offer the primary benefit of true portability, these devices are expensive and are currently not fully reimbursed by Medicare. This has limited the increase of sales volume for portable units.”
The situation may change in five years, de la Haba says, but at present “the recent changes with oxygen reimbursement will continue to keep stationary units as the primary choice in home oxygen therapy.”
On a negative note, however, the changes make Medicare dollars more hard scrabble to obtain for stationary concentrators, de la Haba said.
“The recent policy that CMS issued regarding oxygen is a major change for oxygen providers,” he said. “The new rule makes suppliers responsible for the oxygen equipment, but they will not be reimbursed for any maintenance or service. This will make it difficult for providers to truly provide the same level of service as what has been done today.”
Battling the overhead costs associated with stationary systems is causing providers to make adjustments accordingly, said Kim Snyder, U.S. marketing manager, home respiratory care for Murrysville, Pa.-based Philips Respironics.
“Homecare providers are increasingly shifting toward no-delivery oxygen systems, combining stationary and portable oxygen concentrators or gas transfill systems,” she said. “We’re seeing increasing numbers of providers adopt this model. Examples of where this has been especially effective for providers is with active patients that would have required a high number of deliveries or as a tool to expand into a new geographic area without significant investment in infrastructure.”
Robert Jacobson, vice president and general manager of Buffalo, N.Y.-based AirSep’s medical products division, offers a historical context to illustrate the “new paradigm” taking shape in the oxygen environment.
“Before the advent of oxygen concentrators, home oxygen was administered only from contents-based gas and liquid systems,” he said. “When concentrators were developed and adapted for home use in the mid-1970s, they were initially met with limited acceptance. Delivering cylinders and liquid to the home was the accepted model then. Some providers, especially those with this infrastructure in place, were especially reluctant to embrace the new concentrator technology. They perceived these units as being too heavy, too expensive and too noisy with unproven reliability. They also questioned the lower oxygen level as not being â€˜as good’ as the higher concentration oxygen available with the gas and liquid systems.”
But as concentrators progressed, they went through a decade of rapid improvement, Jacobson said, with dramatic progress made in size, weight, sound, performance, efficiency, reliability and cost.
As manufacturers go forward, they are searching in various directions to meet the needs of patients that require portable oxygen, Jacobson said.
“There are those who are promoting a single solution, while others are espousing the practicality of two separate devices,” he said. “With the single source solution, one device is given to the patient to try to meet all portable and stationary oxygen needs. With a combo solution, the portable device is used for the ambulatory patient’s mobility needs, although only certain units with FAA clearance can meet the requirements of air travel.”
There are advantages for each system, Jacobson said, but ultimately “homecare providers need to consider these and other factors in determining which system is going to be the most desirable, cost-effective solution for their business.”