Why would we sidestep HMEs?

Wednesday, December 31, 2008

MURRYSVILLE, Pa.-- Philips Respironics in December blasted rumors that it plans to sell sleep products to mass retailers and directly to consumers.

“We’ve been in business for 30 years, and we’ve built a tremendous reputation among our provider customers,” said Don Spence, CEO of Philips Home Healthcare Solutions (HHS). “Why in the world would we consider going around them?”

Respironics began hearing of the rumors from its sales reps and providers in late 2008. Not wanting to “beat around the bush,” it sent a one-page letter to providers denying the rumors. The letter also appeared in industry publications.

The basis of the rumors is a Philips PowerPoint slide, titled “Wave 2 - HHS Must Lead Channel Innovation in Home Healthcare,” that details “transforming traditional channel to mass market” by 2015.

Too much has been made of the slide, Spence said.

“A slide that was used as part of an analyst presentation, frankly, isn’t part of our day-to-day business strategy,” he said.

Spence acknowledged “there could be opportunities for products, markets and even parts of the world that we’re not in today where it may make sense to go direct to consumers” in the future.

“But (our strategy) isn’t at all about taking our traditional business and transforming it,” he said.

Respironics recognizes that sleep products like CPAPs are prescribed devices and require service, Spence said.

“We expect those products to stay in an area where support can be provided,” he said.