Saposnick: Why not add respiratory?

Monday, October 31, 2005

ATLANTA - As a registered respiratory therapist with 44 years of experience, Allan Saposnick has seen it all: reimbursement cuts, new technology, challenges related to delivery - everything. So it comes as no surprise that Saposnick, now an industry consultant, conducted a two-part seminar at Medtrade entitled, "Losing Referrals? Why not add respiratory?" By respiratory, Saposnick means not just oxygen but also CPAP and nebulizer medications. But with competitive bidding coming down the pike and a possible cut to the neb med dispensing fee in 2006, is this really the best time to break into this popular and heretofore lucrative business line? Here's what Saposnick told HME News.
HME: Let's start with the 800-pound gorilla: competitive bidding. It's most likely going to include respiratory services. That seems like a good reason to avoid this product line, especially if you're a small- to mid-sized provider.
Saposnick: We may have a more level playing field. We're not going to have too many people who are going to come in and low ball in order to get the bid because they're going to be required to provide and meet all of the same standards. But we're still operating in the void because we don't know what the requirements are going to be. There's a lot of ifs at this point.
HME: What about neb meds? A lot of small- and mid-sized companies find profits hard to come by and have either exited this line or are thinking about exiting it.
Saposnick: Certain meds are still very profitable and others are just marginal. Overall, it still can be a good area. Even the nationals have threatened to get out of it if things go poorly, and now they're threatening to significantly decrease the monthly dispensing fee which has been the savior, at least this past year.
HME: Is it possible for the mom-and-pops to compete?
Saposnick: You do have to compete with the Lincares and the Aprias of the world. But I think there always will be a place for the local guy who can provide a much more individualized service, knows the community, perhaps has a different kind of a relationship with key referral sources, whether that's the individual physicians or hospital discharge planners. Many of the patients feel that way. Develop a rapport with the patient, and that can be worth a million bucks over the long run.
HME: Under competitive bidding you could have the greatest service in the world, but if you can't operate at the bid price, you are out.
Saposnick: Mom-and-pops can offer other things that the large nationals don't want to be involved with. They're looking more at their quarterly financial reports, whereas many of the more local mom-and-pops tend to take a broader view of providing their patients with a range of services.