Study: Development of high-end chairs discouraged

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Thursday, February 28, 2002

BURLINGAME, Calif. - Frost & Sullivan recently reported that reimbursement cuts have discouraged wheelchair and scooter manufacturers from developing premium models, but industry sources say that's not necessarily true.

Dave Williams, director of government relations at Invacare, said his company is broadening its entire product line, including high-end wheelchairs. At Medtrade in October, Invacare introduced one high-end, four mid-range and two low-cost wheelchairs, he said.

Williams admits the focus on low-cost wheelchairs has increased lately, but manufacturers are still putting R&D money into high-end wheelchairs.

Why?

Williams said high-end wheelchairs produce valuable cash sales for dealers. Moreover, because the new advance beneficiary notice (ABN) allows a consumer to apply reimbursement to a higher-end product and pay the difference out-of-pocket, they're easier to obtain, he said.

"You can't abandon high-end wheelchairs," Williams said. "They're too lucrative."

Frost & Sullivan contends the reimbursement cuts put pressure on manufacturers to price their wheelchairs and scooters within the maximum allowable for reimbursement. The resulting lower prices will slow revenue growth, they report.

In 2001, the wheelchair and scooter market generated close to $766 million in revenues, reported Frost & Sullivan, and by 2008, it's expected to generate over $1 billion.

But Williams said Frost & Sullivan traditionally look only at Medicare, Medicaid and third-party payer sales, and they don't take cash sales into consideration.

"If a company sees that reimbursement's going this way, and it says all its products are going there, too, they're going to miss out of a big market," he said. HME

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