The times, they are a-changing

Friday, September 30, 2005

Do people really believe that HME providers pad their bottom lines by not investing in lightweight portable oxygen systems and instead giving patients less expensive e-tanks to schlep around? Unfortunately, people do. In fact, a number of attendees at the Sixth Oxygen Consensus Conference in late August - oxygen users included - said as much.
If you think about it, that line of reasoning, while unsupported by hard data (there's that word again), makes sense. Medicare is cutting reimbursement, and under its modality neutral methodology, it pays the same amount no matter what equipment the patient receives. Hey, if you are a provider, why not cash in and provide a less expensive modality? Let me count the reasons why that's not a very good business strategy or one that will persist in any great way far into the future.
First and foremost, Econ 101 suggests that competition and market forces - as they do in most lines of business - dictate how a provider must conduct his business if he wants to thrive and prosper. If an HME does business in a metropolitan or some other highly populated area, chances are he's competing vigorously for oxygen referrals. It's doubtful he'll generate much business pushing e-tanks ("These things are awsome!"), while his rivals talk up the benefits of their lightweight portable units. Referral sources aren't that dumb.
Secondly, with manufacturers speeding ahead with new technology to improve ambulation and cut down on provider deliveries, the future of LTOT seems pretty clear: E-tanks will play a limited but clinically appropriate role when a need arises.
I'm not saying that some providers don't shun lightweight technology in favor of bigger profits. But the evidence doesn't suggest that this behavior is pervasive and demands drastic action, such as asking Medicare to switch from modality neutral to modality specific reimbursement. Let the market work.
Ironically, the handful of patients at the Consensus Conference who pleaded for greater access to portable technology all used lightweight systems. In another twist, a conference researcher said he had to delay an experiment because hecouldn't find enough e-tank patients to take part. I think the HME industry can safely say: The times, they are a-changing.