Reducing Supply Costs
Controlling costs on supplies isn’t a new concept for most oxygen home care providers. Unlike the CPAP market where suppliers are reimbursed for each product provided to patients, oxygen suppliers are reimbursed a flat rate for each patient, no matter how many supplies they provide. But with the Affordable Care Act, competitive bidding and the uncertain future of the Market Pricing Program, suppliers need to push those cost savings even further.
When everyone is getting reimbursed the same amount, you don’t want to be the one paying more for your supplies. The biggest tip I can give you is to shop around. If your company has been purchasing supplies from the same manufacturer for years, this might be a great time to shop for new suppliers.
Are All Oxygen Filters Created Equal?
Off-brand companies frequently carry the same quality supplies or even the exact same products for a lower cost, but they don’t have the name recognition. Let’s say you purchase your oxygen concentrators from Acme Manufacturing. That concentrator comes with a foam filter that needs to be replaced regularly. Acme probably does not manufacture that filter; they likely purchase it from a supply company that makes various products such as foam pillows and mattresses in addition to filters. That foam supply company probably sells the same filter to multiple manufacturers and distributors, so in many cases you can get the exact same filter from a different company for a lower price.
Additionally, there are companies that focus mainly on replacement parts for all of the different manufacturers, sort of like the “AutoZone” of the oxygen industry. You can buy an air filter for your Ford Explorer directly from Ford, or you can go to AutoZone and get one for your Explorer and your Audi in the same place for a lower price.
Original Equipment Manufacturers (OEMs) like our fictional Acme Manufacturing or real companies such as Ford make most of their money on the original device like the car or the oxygen concentrator, not the filters, so they don’t focus on offering the best value for replacement parts like some other distributors and manufacturers do.