Providing Oxygen Sensibly

With every new oxygen patient referral, HME providers must determine what oxygen delivery technology will be the most effective and appropriate for that patient.

HME providers who supply home oxygen are under siege.
Reimbursement is declining and threats of further cuts occur with
increasing frequency. There are constantly changing rules, a rebid
of competitive bidding — and the lack of clarity and
communication from CMS is truly alarming.

Coupled with these problems is the fact that new oxygen delivery
technology continues to be introduced that must be evaluated for
purchase, and patients are beginning to request new and different
equipment so they can travel with their oxygen on airplanes, rail,
bus and cruise ships.

Providers who wish to stay profitable must now be very astute
businesspeople. This requires a thorough understanding of the types
of oxygen patients they serve, their clinical requirements,
referral source preferences for technology and the oxygen modality
choices available within the current reimbursement system.

With every new oxygen patient referral, the HME provider must
determine what oxygen delivery technology will be the most
effective and appropriate for that patient. Their oxygen delivery
choices are as follows:

  • Stationary concentrator only;

  • Stationary concentrator and multiple aluminum cylinders with an
    oxygen conserving device (OCD) that has been titrated to meet the
    patient's clinical requirements and activities of daily living;

  • Liquid oxygen delivered through one base unit or two base units
    (tandem system) and one liquid oxygen portable device;

  • Transfilling concentrator that allows in-home filling of one or
    more portable cylinders;

  • Portable oxygen concentrator (POC) that delivers pulse doses
    only and that weighs less than 10 pounds;

  • Stationary oxygen concentrator plus POC;

  • POC capable of pulse dose and continuous flow and that weighs
    between 10 and 20 pounds.

Some would say that matching the patient with the device is an
art. We would suggest it can be based upon empirical data and

Types of Oxygen Patients

The entire population of oxygen-dependent patients can be
described and placed into four convenient and easy-to-understand

  1. Nocturnal patients, those that require oxygen only at

    These patients have a myriad of clinical disorders that require
    them to have supplemental oxygen to minimize their oxygen
    desaturation during sleep.

  2. Homebound patients, those in the latter stages of
    advanced chronic lung disease

    These patients typically lack the mobility that they enjoyed
    earlier in their disease process. While most of them require 5
    L/min or less, a small percentage requires higher flows.

  3. Ambulatory patients who have standard portability

    Standard portability is defined as a movable oxygen source and a
    consumption requirement no more than 40 "liter hours," where the
    hours are defined as prescribed L/min multiplied by the estimated
    number of hours of use per week.

  4. Ambulatory patients who have high portability

    High portability is defined as a movable oxygen source and a
    consumption requirement more than 40 "liter hours" per week.

We can show these patient groups as a typical bell-shaped curve
as illustrated in Figure 1.

To better understand the percentage of oxygen patients who fit
within each group, we reviewed 2007 Medicare data and compared it
to a market research study in which we collected data from a
stratified random sample of HME providers.

The Medicare data tells us that in 2007, 38 percent of the
patient population was nocturnal use only. This group has been
growing year after year and is likely a result of aggressive
efforts to identify early-stage COPD patients who desaturate during
sleep but not while awake or during exertion.

Our own empirical research suggests that 5 percent of the market
is homebound. This means that 57 percent of the population is
ambulatory. These results allow us to see the percentage of oxygen
patients in each group as shown in Figure 2.

This data will vary from year to year as the patient population
changes, and each provider's patient population may look different
based upon the company's referral base and target market. This will
cause the slope of the curve to change from year to year and from
provider to provider.

Figure 2 is useful because it allows us to break down the total
oxygen market into segments. Each segment has different technology
requirements because of the activity levels of the patient
population. As can be seen from Figure 2, the nocturnal group (38
percent) and the homebound group (5 percent) generally do not
require portability. An exception would be the nocturnal patient
who travels frequently.

This graph clearly shows that 57 percent of oxygen-dependent
patients are ambulatory to some degree and thus require oxygen
devices that can provide portability. Each HME provider can
construct a similar graph for the company's existing patient
population so the patient requirements can be easily seen.

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