Rising gas prices fuel frustrations

Sunday, September 4, 2005

YARMOUTH, Maine -- In the aftermath of Hurricane Katrina, HME providers can only watch as gas prices continue to soar.

"We're all scared to death," said Michael Hamilton, executive director of the Alabama Durable Medical Equipment Association. "We can't do anything about the effect of huge increases in gasoline."

"I'm going all electric," laughed Angelo Oliva, CEO of Pulmocairx in Calif., where gas prices were pushing $3 a gallon even before the storm. "What do you do?"

Because most HME providers derive much of their revenue from Medicare and Medicaid, as well as contracts with other third party payers, they cannot pass the cost onto customers, even as their own cost of business rises.

"There's a flaw in Medicaid, no provision that affects anything that runs your cost up," said Hamilton. Higher costs to him include higher freight charges on items he needs. "We can't change rates up and charge Medicare."

Instead, providers must seek other ways to cut costs. Tom Inman, president of Virginia Home Medical, uses GPS to route deliveries more efficiently and encourages customers to pick up their orders.

"We're in a tourist area and idling in summer traffic is a nightmare for us," he said.

Oliva is also trying to consolidate routes for his fleet of 11 vehicles, delivering in one day what used to take two. He's considered doubling up oxygen tank orders but hesitates to tie up inventory with customers.

"Because they have more (oxygen), they are going to use more. Medicare only reimburses X amount of dollars," said Oliva. "It's highly frustrating. It's a no-brainer -- if Medicare reimbursed more."

And providers won't back down on providing quality service.

"We've invested a great deal of money and training, and they're the best ones to serve the patient," said Don White, president of Associated Healthcare Systems in New York.

"You can't tell patients no," agreed Inman.