Wound care titans step aside
Expect competitive bidding to muddy the waters in the negative pressure wound therapy market as key players Medela and KCI sit out the first round.
“We couldn’t deliver the type of therapy we have historically offered at that price,” said Woody Staub, president of global vacuum business for KCI.
The average cut to the fee schedule for NPWT was 14%. That’s not too steep compared to other product categories, but treating and billing for the equipment is complicated and time consuming, which could eat into the profit margins of unprepared providers.
“We heard that many of the companies that won had never submitted a claim for NPWT and had no supply source,” said Bernie Laurel, vice president of pump manufacturer and provider Medela Healthcare Americas. “We got calls from dealers who won that said they needed us to lower our prices.”
That could pave the way for cheaper pumps to enter the market, but that will come at a cost, says Laurel.
“There are a lot of HME providers who may be tempted to buy a low-cost pump and outsource the dressings,” he said. “The difficulty is where the support for the provider is going to come from.”
Medela, KCI and newcomer Smith & Nephew have traditionally either provided the therapy themselves, or contracted with providers who take advantage of their full-service support system.
All this could spell bad news for the patients, says Staub.
“These are highly compromised patients,” he said. “If there’s no service or support, you’re looking at continual complications for the beneficiary.”
Staub said some providers seem to have accepted contracts with no intention of offering the therapy.
“We got a number of phone calls after the contracts were awarded, with people offering to sell us their winning contract and their business,” he said. “Clearly, people went into this to see if they could win and then use it as some form of collateral.”