Paving the way for increased POC use: The VGM Group

Wednesday, May 31, 2006

WATERLOO, Iowa - In an effort to help providers who are between the proverbial rock and a hard place, the VGM Group has purchased 50 portable oxygen concentrators and will rent them to members who otherwise could not afford the high-tech units.
"People are losing patients because they cannot afford to bring them on," said Tom Pontzius, president of VGM's Nationwide Respiratory. "It's not a wise business decision to pay $3,450 or whatever it costs if you are only going to rent it out for a week and then be sitting on top of the capital equipment."
VGM purchased the 50 POCs from Inogen and will buy more if needed, Pontzius said.
Under the new program, VGM members can rent a POC for $500 a month and then rent it to a traveling patient for a suggested $300 a week, which will cover wear and tear, training and other services. VGM is also lining up a consumer finance program."It's just like buying a piece of furniture," Pontzius said. "The dealer will have the paperwork and submit it to the creditor who will finance the purchase for the patient. It makes it more affordable for the patient. There are a number of providers who have rented these in various markets and 60% to 65% were converted to sale."
Manufacturers of POCs and transfilling oxygen concentrators acknowledge the equipment's high purchase price. They also maintain, as do many providers, that the equipment justifies itself by reducing deliveries and related expenses. Manufacturers of this equipment stand steadfast in their belief that, given the downward pressure on reimbursement, providers eventually must adopt this technology to reduce deliveries and related expenses. Nevertheless, the purchase price, especially for POCs, currently poses problems for providers and patients. The Palm Beach Post ran a long story in mid-April on portable oxygen concentrators, and that story quoted a senior citizen who called POCs "toys" for the wealthy.
"Most people can't afford it," provider Greg Esposito told the Post. "We're getting a lot of questions because people have heard about them and think, 'I've got Medicare.'"
But Medicare allows only about $230 a month to supply oxygen, and at $4,000 or more each, Esposito said, it's not feasible for his company to supply POCs. VGM, by purchasing the units and leasing them to providers, hopes to eliminate that dilemma, Pontzius said.