Back to the Future

“The bald guy.” That was my daughter’s complete presentation of her father’s 17-year service as protector, chauffer, banker, fixer, soccer ball stopper and hug-ready support system. Elsa was receiving an achievement award and was asked to introduce her parents to the filled auditorium.

So many years. So much effort. Such a significant contribution to the lovely cause. And all of it nut-shelled into an abbreviated, surface view (expansiveness of surface not withstanding): “The bald guy.”

Home care providers, welcome to my world. Regardless of how hard you’ve worked, how much you’ve contributed, the shorthand take of who you are is skin deep and not exactly flattering.

Allow me to give some back story.

As a business development consultant (that’s fancy pants for “marketing”), I have the opportunity to work with technology companies that hope to introduce new products into the home care marketplace.

These are entrepreneurs, inventors and investors who know a lot about their respective specialties but little about our industry. They lack the resources to roll into the market and build sales and distribution from scratch. Instead, they research the marketplace with hope of tapping into existing channel players (you) who can build demand, offer support and service their products.

Recently I’ve had opportunity to participate in several research efforts where home care insiders were asked to share their views of the industry’s dealer channel. Just as my daughter did to her dear old dad, you (providers) are described not by your many qualities, not by what you have contributed over the years. Instead, the sum total of who you are, Mr. and Ms. Provider, is compressed and polished into a skin-deep assessment. You are the bald guys and gals of health care.

Be forewarned. The view of the home care channel is not flattering. Those surveyed included providers themselves, as well as investors, influencers and product development people. I share these real (if not complete) opinions in hope that tough times provide the spark for many to shift course and take proactive ownership in their own success and the market’s at large.

Here goes.

Home care providers are described as a group to be:

1. Pessimistic.
2. Not innovative.
3. A weight on the market rather than a catalyst moving it forward.

Hurts, Don’t It?

Without question, the view overlooks the facts. What about the cuts, the caps and the daily red tape? What of long deliveries and slow pays? How about all of the employees who depend on their salaries, and the patients who depend on you for care? With all you do and all you deal with, how could anyone say you are an anchor, not an enabler?

Truth. Realize these opinions are solely in context of providers as a conduit for launching new technologies. In that arena, how would you rate yourself? How about your peers? Would you say providers at large have a track record as “early adopters?” Do home care providers have a history of being quick to embrace new products and build demand for them?

Outside Looking In

People from outside of health care look at the home care market with envy. Sure there are challenges and pressures, but everything’s relative. Those from outside will challenge you to find a market that doesn’t have its issues. They will tell you to talk to your counterparts in food service, computers, televisions or cars. Ask them how many new buyers are coming into their respective markets each year. Ask about their cost of goods, their overhead and their margins on units sold.

Oh yeah? Well, we’d be just as happy to invite anyone from outside this industry to come in and walk a mile in our shoes, right? For those of us who’ve been in this market 15 or 20 years, things have changed dramatically. It’s not like it once was. Things just aren’t what they used to be.

Or are they?

As I write this, next to my keyboard is a slick promotional folder for a new oxygen delivery system. It’s amazing technology. It promises to:

• Revolutionize ambulatory oxygen;
• Give patients independence and freedom;
• Eliminate costly service calls; and
• Provide maximum inventory flexibility for providers.

What provider wouldn’t want those benefits? Now remember, I’m an old bald guy. I have to confess the promotional folder is circa 1997. What’s more, the oxygen technology described wasn’t even the first of its kind.

Fast forward more than a decade to Medtrade 2008 and one could find no less than a half-dozen companies with big screen TVs filled with spreadsheets detailing the cost/benefit of non-delivery systems. Today, the technologies are miles from what they were in the ’90s. The business math was clear 10 years ago why non-delivery is a no-brainer. Why are we still talking about this?!

OK, OK. I know I’ve left out the critical factor. Capital outlay for new technology can be considerable. And in these times of cuts, that’s a driving factor.

Back to the folder we go.

The yellowed folder of materials includes a press release that begins, “Recent Medicare oxygen reimbursement cuts are causing oxygen providers to seek new ways to reduce the costs associated with providing oxygen therapy.” Here we are, 12 years later. AirSep, Chad, Evo, Inogen, Inspired, Invacare, Respironics and SeQual. All have brought non-delivery technologies to the industry. Arguably, none have so much as dented standard practice. The piece of pie that is the POC market share remains a very thin slice.

Yes, there are many pressures in today’s market. But are they really any different from what we’ve overcome all along? I’ve not seen anyone put current times into perspective better than artist/writer Ashleigh Brilliant, who said, “Strangely enough, this is the past that somebody in the future is longing to go back to.” Indeed, these are the good old days.

Looking Back, Looking Ahead

As I reminisced while scanning through my old folder, I called my old friend Ron Richard. Back in the mid-’90s, Ron and I worked together at one of the large respiratory manufacturers. In those days, we helped blaze the non-delivery trail with something we called “The Combo System.” It involved putting both a concentrator and a LOX system in the patient’s home. Not exactly a killer technology breakthrough.

After many chuckles about the (prior) good old days, I asked Ron to update me on how far non-delivery technology has advanced. (Ron is now CEO of SeQual.) Half-full guy that he is, Ron said progress is being made. Slowly (my emphasis, not Ron’s), more providers are beginning to use POCs as their technology of choice for new ambulatory patients.

Ron described providers who are using technology for direct, non-delivery savings. Even better, there are a growing number — often those newest to the industry — who are using POCs to differentiate themselves and win referrals. As new technology companies would hope to see as an industry-wide practice, a small percentage of providers are embracing new methods and evangelizing them within their respective markets. They are building demand and market share for themselves and their suppliers.

Without sharing confidential information, Ron spoke of a particularly innovative provider in the Midwest that surveyed and tested its patients to gather both qualitative and clinical data. The provider has formed a data-supported and highly compelling story for why it and its service approach should be the referral source’s default choice. Of 70 patients surveyed, the provider was able to show that its use of new technology (here the SeQual Eclipse):

• Significantly reduced the number of costly home deliveries;
• Measurably increased patient satisfaction with their new oxygen system vs. prior equipment;
• Allowed for effort-sensitive oxygen flow that enabled greater activity without shortness of breath;
• Captured the imagination of referral sources once they became aware of the clinical and economic advantages of a single-source LTOT delivery system; and
• Created new streams of LTOT referrals from happy patients sharing their success stories.

With willingness to embrace new technology and build a marketplace, providers can excel. It is happening now. But unfortunately, it appears — per opinions of your peers — innovation remains the exception within the channel rather than the norm. Until the majority of providers take a proactive mindset, new technology companies will remain hesitant to inject their life investments into what they view as an otherwise prime market.

In close, I hope the opinion of your peers spurs thought. Better still, spurs action. The above perceptions represent truth. Per the folder-of-old, our industry is knotted in issues that, rather than new, are normal course of home care business.

Rather than let self-fulfilling prophecy drag you down, step up. Grab hold of the solutions already available. Make a habit of leading rather than following the herd. These are the times we’ll fondly look back upon as the good old days. People will step up and make new things happen. For them, this will remain one of the best industries in business.

Terry Pageler is founder and CEO of PowerCore Inc., a data-driven business development company in Lenexa, Kan., focused on health care product and service providers. Pageler has over 15 years experience in the medical device industry, and has a master’s degree in integrated marketing from the University of Kansas, where he also teaches graduate-level courses in strategic management and brand strategy. He can be reached at 913/888-6565 or [email protected].