Transfilling concentrators

Monday, June 30, 2003

PERORIA, Ill. - If it plays in Peoria, there’s a good bet that it’ll play anywhere in America. That old adage was coined in the Vaudeville era, and applied to stage shows that might make it on Broadway. But the same is holding true for transfilling oxygen concentrators.

Here in Peoria, Advanced Medical has been supplying transfilling concentrators to its patient base for three years and now has in the field about 150 units, manufactured by both Chad Therapeutics and Invacare.

“It’s wonderful,” said Ken Humphrey, Advanced’s president and CEO. “You don’t have to send a serviceman out with tanks all the time. I would much prefer to pay more up-front than constantly be bombarded for service.”

Although the considerable up-front costs — from $2,200 to $3,000 — have kept the HME market from a wholesale embrace of the technology, today, six years after their auspicious introduction at Medtrade, providers say the systems are fully fledged, cost-efficient and, quite possibly, on the cusp of feeling the heat of consumer demand.

Diabetes supplies, power wheelchairs and respiratory medicines have all been the subject of significant consumer marketing campaigns; home oxygen systems will join their ranks this month as Invacare launches a new series of consumer advertisements designed to drive demand for the company’s Venture HomeFill II product.

Invacare believes the growth curve for transfilling technology will resemble a hockey stick. While sales of transfilling systems have increased modestly since introduction, the manufacturer believes the technology is now primed for a precipitous upward climb. At least one HME provider can envision the same.

“It would not surprise me if next week we made a corporate decision to only buy transfilling concentrators,” said Alan Kirk, general manager of Total Home Care in Elgin, Illinois.

At the same time, Kirk, and other providers, say there’s no reason to put a transfiller on every patient. Although one rival in Kirk’s market services an all-transfiller fleet, other providers say non-ambulatory patients just don’t need them.

“If we’re not billing Medicare for portability, it’s just a concentrator and a back-up tank,” said Kirk.

The road to general provider contentment over transfillers did not come without some bumps along the way. Chad ran through fits and starts during its first year. Invacare was beset by FDA issues and has completely redesigned the aesthetics of its transfilling compressor.

In the meantime, other portable oxygen stories have barged toward center stage — most notably, Puritan Bennett’s Helios liquid oxygen system, which features a long-lasting lightweight portable, and AirSep’s lightweight Lifestyle portable concentrator, which weighs in at about 10 pounds.

None of the existing systems have seized the proverbial brass ring, which when talking about home oxygen is a lightweight oxygen generator that will produce up to 5 lpms and serves all ambulatory and stationary needs. But that technology isn’t hovering on the near-horizon.

Today, transfillers are coming into their own. Look no farther than Apria, which is beginning field trials of Invacare’s HomeFill system.

One thing about transfilling has become clear to dealers. “Once you put it out, you can’t get it back,” said Sam Clay, president of Clay Home Medical in Petersburg, Va. “They’re popular with patients. They love it.”

That wasn’t always the case. In the beginning, Apria declined to consider transfilling when its director of respiratory couldn’t figure out how to operate the system. If he couldn’t manage it, he doubted the technology would find much traction with his patients.

User friendliness is no longer a great issue. The up-front investment continues to be a significant issue, though manufacturers are offering various financing programs to help providers over that hurdle.

For now, HME providers can’t really quantify the savings that transfilling brings to their operation — certainly not with the same degree of articulation that manufacturers bring to the table when they talk about transfilling systems that cost one-third as much as traditional oxygen delivery systems. But they are realizing savings.

“When you’re saving on delivery charges, and tracking cylinders and lot numbers for the FDA, it really pays off nicely,” said Chris Burgess, director of respiratory for Medical Emporium in Charlotte, N.C. “It frees our drivers to do more important things for our customers than just deliver tanks.”

Medical Emporium has 70-80 transfilling concentrators in the field.

Some companies are reinvesting those savings. “Now, instead of having a driver tech go out, we have a clinical person go out more often,” said Bernie Lambrese, CEO of Respiratory Solutions in Johnstown, R.I. “Our game-plan is to improve clinical outcomes, but also financial outcomes for payers.”

To date, dealers say most of the demand for moving transfillers is internal. Referral sources, by and large, aren’t calling for transfilling systems for their patients, definitely not to the extent that they’re calling for oxygen conserving devices. Consumer demand for the product hasn’t acquired the buzz that Helios was making among the lung clubs across the country. But providers who do market to consumers say consumers will call for it.

Burgess has advertised transfilling in print and has attracted some business that way. The business he’s most interested in is new business. Winning other companies’ customers is more problematic.

“If that happens, it’s okay, but that’s not our goal,” said Burgess. “We don’t want to create ugly hostilities with competitors, not to mention the billing problems this creates when transferring CMNs.”

Although manufacturers are insistent that transfillers are the lower cost model, and that the math is plain, passage of nationwide competitive bidding could pose new challenges for the technology.

“If it goes to competitive bidding, [transfilling] goes away,” said Burgess. “There won’t be any money for that.”

Burgess believes HME companies will revert to purchasing products with lower up-front costs and require patients to come in for their portable.

Not so fast, said Mary Miller, president of Encore Respiratory in Polk County, Fla. and a home oxygen provider in the competitive bidding demonstration project. She said Medicare’s supplier contract with dealers under competitive bidding prohibited requirements that dealers force patients to pick up portables.

“You can ask,” she said, “but you can’t force. You’re never going to get rid of delivering those portables.”