Page 19 - HME Business, March 2018

“It’s also important to address job security concerns. Delivery drivers, for example, may question the future of their jobs if the company is moving away from the delivery model.”
— Nick Jacobs, Invacare Corp.
patient with essentially constant supply without the need to re ll the cylin- ders, so long as they have battery or external power. Patients prefer the exibility and freedom offered by POCs.”
Ambulatory patients have better outcomes because “objects in motion stay in motion,” says Victoria Marquard-Schultz, Esq., managing director of OxyGo, so the key is to nd a portable oxygen modality that ts the patient’s needs and can also be cost effective.
“Portable tanks used to be the main event — but with reimbursement cuts, the delivery associated with those is too high to be sustainable for most providers who take Medicare patients,” she adds.
“The popularity of the POC market has certainly increased over the last ve years, and probably more over the last two,” says provider Anthony LaCute, president of Seeley Medical. “In my view, the popularity has been driven by the manufacturers, patients, dealers and referral sources. We
think of POCs purely as an opportunity to reduce overhead costs, but it
has nothing to do with the marginal monthly increase in revenue. It also has allowed us to signi cantly grow all major lines of our business without hiring new service technicians. This is a result of far fewer stops for tank deliveries.”
POCs do cost more up front, but providers must have an understanding of their operational costs over time to evaluate the overall expense when comparing a POC model to that of stationary and tanks, according to David Lyman, RRT, vice president of respiratory for VGM & Associates. Providers should consider that the model of stationary and tanks encompasses more than the expense of delivering tanks to patients’ homes. The tanks need to be lled and require hydrostatic testing and cleaning — these all add costs to delivery of the product.
“Over time, POCs do cut cost,” he emphasizes. “For example, say it cost $50 per tank to deliver oxygen. You deliver 24 times to a patient in one year, resulting in overhead costs of $1,200 per year. When comparing that scenario to the cost of an average POC model, you would have a return on investment after about 12 months on a POC model. Years two and three, based on Medicare’s 36-month cap, are pro t. That’s not the case if you are delivering tanks. Yes, you have some cost if the batteries need to be replaced in the POC or it needs repairs, but you also have repair costs in a stationary and tank model.”
Having an understanding of your current patient base and the true overhead cost to deliver services will help determine if a POC model is right for your business, Lyman says. Cash ow is very tight for many compa- nies; however, if you choose to enter the POC market, there are options to nance, which helps to offset the initial cost of the POC.
“Portable oxygen has de nitely increased in popularity and more and more patients seem to be willing to pay out of pocket for their devices,” says George Coppola, director of marketing of CAIRE Inc. “For homecare providers, we have seen a shift with where they have turned their attention to address their eet inventory and its much-needed conversion to a non- delivery model.
“With the recent cuts in reimbursement, homecare providers are looking
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