A severe blow to all the blowhards

Wednesday, April 30, 2008

One of the great attributes of the Internet is transparency. So much is now visible. Generally, this is a good thing. As the saying goes: Sunlight is a disinfectant; let it in. But transparency can be costly, as the HME industry is discovering.
Now, it's easier than ever to find out that HME suppliers can pay $400 or $500 for an oxygen concentrator. The same pricing information is available for power wheelchairs. In both instances, the Internet laid price bare but not true cost. One unwelcome consequence? Erosion of reimbursement.
It's all too easy for anyone to point at an Internet price and query why Medicare should pay so much more. For this audience, I don't have to detail what goes into the delivery of home oxygen services or power wheelchairs. Fact of the matter is that it can be done on the cheap. It's not done well cheaply, but it's done. You might say there's nothing that can be done about that.
Or you could look at Ron Richard's Internet reseller campaigns, first at ResMed and now at SeQual. For products sold by the two manufacturers, it's no longer enough for a buyer to simply pony up. If you want to sell their products, you have to come to terms with how you'll provide service.
It's hard to imagine that "blowhards" could do to portable oxygen concentrators what wheeler dealers did to power wheelchairs, abandoning merchandise on the doorsteps of seniors after payment's been secured. But why wait around to see? Richard's already encountered instances of drop-shipped concentrators.
Now you've got to play by the rules if you want to sell SeQual (See story on page 50). HME providers like this. It makes sense. The benefits are bound to be widespread as end-users develop relationships with good service providers and improve compliance, to boot.
This is an evolutionary development, as well, because what we're seeing here is a formalization of the service role that manufacturers of home medical equipment are playing in the supply chain. Used to be they didn't do service. Now they do. And, it would seem, they have to.
Consumers who make their own product choices are going to drive change. We saw that with power wheelchairs. We'll see this with attractive new technologies, like portable oxygen concentrators. More and more, we'll see consumers who provide their own service, and products that enable this.
"We are starting to design the next generation of products almost to the point where patients can change filters and batteries and take care of the units," Richard said. HME