Show your cards

Saturday, December 31, 2005

Here's something that should be said and rarely is: The HME industry needs to show its hand--not the whole hand, nothing so blatant as a collective average of its profit margin, but at least a reckoning of basic information.
I'm talking about how many days, on average, a hospital bed is in the field. Or a patient lift? A CPAP? An oxygen concentrator? Whether all or most providers actually track this kind of information or not is another story. But savvy providers do. They know. And this kind of information should be dispensed.
Why? Because the industry faces a proposal to eliminate Medicare's capped rental option for DME. We can say this will be bad for patients. We can say that Medicare will pay in the long run, because equipment will break, and patients will require more hospitalization.
But we can't say on average how many months a hospital bed is in the field. This is easily ascertained. It wouldn't take the Lewin Group or Dr. Bill Cronn more than a New York minute to figure it out.
If the industry is loathe to share this information, or talk about such issues, it's because there's a general feeling that some cards are better played close to the vest. I remember talking to Steve Knoll about this several years ago. He said that any time the industry sat down at the negotiating table with CMS and tried to reach reasonable accommodation, the industry was always a loser.
That may be so. But I also believe the industry is far more hampered by its reluctance to speak frankly about its business. Too frequently, the bows of defense are cocked with platitudes about the advantages of home care, and too infrequently with incontrovertible facts. If you believe in free markets, then you believe that most everything should be on the table.
I've watched HME providers hedge their bets for more than a decade, and I've also watched the industry lose for more than a decade. Yes, there have been victories, but the victories have always been a matter of stemming the tide against further reimbursement cuts--cuts that inevitably come anyway. So, for two or three years, there's more profit. That's good in the short term.
Meanwhile, the bigger picture is neutered. What's the bigger picture? A more robust, muscular industry. An industry whose critical role in the continuum is undisputed. An industry where hedging bets is not necessary.
We don't know how long the typical bed or concentrator stays in the field because we're afraid CMS will consequently make assumptions about profit, and use that information as an axe.
Better for the industry to be able to state, unequivocally, that you cannot cap the rental of a concentrator because the average unit is in the field for 14 months and at the 15th month, typically, this happens, and at the 19th month, this happens, etc.
The industry needs to be able to argue like this. Otherwise, we'll keep saying that home care saves money, and that message is about as potent these days as the one about Iraq and the need to destroy its weapons of mass destruction.