Portable O2: Approaching prime time

Sunday, May 31, 2009

Portable oxygen concentrators (POCs) appear poised to dominate the respiratory field. To be sure, there are compelling reasons why POCs are taking off - namely the 36-month oxygen cap and the looming national competitive bidding program. Both CMS initiatives should make the cost-effective POCs a more attractive option for ambulatory oxygen patients, thus creating a surge in demand, industry sources contend. Some sources even go so far as to predict that portable concentrators will be the predominant delivery system by 2020 at the latest. Others, like Ron Richard of SeQual Technologies, are a little more cautious.

“While it’s true that more providers are moving toward POCs, they won’t outnumber home-based concentrators until they are able to provide continuous flow,” said Richard, CEO of the San Diego-based manufacturer. “Clinically, does the technology match up to the prescriptions and patients’ needs? Approximately 85% of prescriptions are for 2 liters, some are for 3 and a small percentage is for 5. If you want technology that meets the needs of most patients, it must have continuous flow.”

Regardless, AirSep President Joe Priest sees POCs as a revolutionary force in the market.

“I expect POCs to be dominant in five to 10 years,” he said. “Hardcore adopters will be the small and mid-sized companies. They are smaller, fleet afoot and can adopt it faster.”

Cap a catalyst?

Will issues like the 36-month cap serve as an impetus for a surge in POC demand? Partially, but not totally, sources say.

“The majority of the interest in POCs is not due to the 36-month cap but more about being able to provide a better solution for oxygen users,” said Jay Vreeland, director of U.S. marketing, home respiratory care, for Murrysville, Pa.-based Philips Respironics. “Previously, patients could take oxygen cylinders to the mall, church and across town, but they were limited to how many cylinders they were able to transport and, inevitably, they had to return home. With POCs, patients now have an oxygen source they can take with them wherever they go - a plane, the beach or traveling to see their grandchildren.”

Chris LaPorte, product manager of portable oxygen for Elyria, Ohio-based Invacare, maintains that if the cap itself isn’t a catalyst for purchasing POCs, it definitely has providers thinking about ways to conserve on expenses.

“Situations such as the cap, which places limits on reimbursement, encourage providers to continue to challenge the status quo in their businesses,” he said. “Operational expenses - in particular the cost of recurring oxygen delivery - are often quite expensive and difficult to control. New oxygen technologies and strategies based on cost efficiency are fast becoming the norm for providing ambulatory oxygen in the home.”

The POC’s efficiencies are numerous, sources say, and can help providers cut their overhead by eliminating the need to fill liquid vessels and exchange tanks, as well as curtail regular home delivery. POCs also offer economic value because they are better suited for patients’ needs, says Bob Fary, director of strategic alliances for Santa Barbara, Calif.-based Inogen.

“They are ideal for the most active patients, who are historically the most expensive for providers to support,” he said. “Add the travel and mobility benefits and the provider is able to run a very efficient operation.”

Happy travels

Air travel got simpler for oxygen patients after the Department of Transportation recently cleared POCs for all airlines. This development has vendors wondering whether it will translate into a sales boon for providers.

Some airlines previously did not allow oxygen on board, which limited patient options for traveling. Moreover, patients had to arrange for oxygen equipment wherever they went, so having a self-generating oxygen unit that goes everywhere with them is a vast improvement.

“It is not so much a ‘boon’ for providers as it is a great opportunity for oxygen users,” Vreeland said. “Moving forward, traveling oxygen patients will have the freedom to fly whatever airline they choose, which is a tremendous benefit.”

LaPorte asserts that the ruling is “a giant step in the right direction” for both patients and providers.

“As more patients get comfortable flying with their concentrators, more providers will have opportunities with rental programs or the outright sales of these products to patients,” he said.