Size Matters

The market for pediatric home medical equipment has a great deal of potential for providers willing to put in the effort.

Consider the patient base: children, and an ever-increasing number of them, who require some sort of HME, from asthma treatments to custom-designed power wheelchairs. Then consider the reimbursement situation: children with disabilities receive state Medicaid funds, along with private pay funds, which have taken less of a hit — at least where pediatric products are concerned — than Medicare in recent years.

With these potentially lucrative market drivers, HME providers and manufacturers alike are paying more attention.

On the manufacturer side, this is apparent in product design. In the past, some pediatric products have simply been scaled-down models of adult products. Now, many manufacturers are developing products solely with kids — and their parents — in mind.

“Instead of a family adapting to the available products, products are adapting to families’ needs,” says Innovation in Motion Vice President Rick Michael, whose company recently took on distribution of Italian-made Ormesa pediatric mobility products.

Many manufacturers are offering products that allow kids to personalize their medical equipment. These simple innovations allow for multiple rewards. “Fun” equipment can lead to better compliance with therapies, and, by letting kids express their creativity, it lets kids simply be kids.

Soon, manufacturers say, pediatric power wheelchairs could offer mp3 players or video game-playing capabilities with their on-board electronics.

“I think the industry is on the cusp of seeing really exciting electronic advancements for power mobility that could offer kids ways to integrate their own personal style into their operating system,” says Cody Verrett, director of clinical and education development for Quantum Rehab, a division of Pride Mobility. “We’re excited about possibilities for that. When they’re sitting waiting for doctor’s appointments, kids could be playing video games. The technology exists, so why not use it?”

A closer look at the two main product segments of pediatric home medical equipment — respiratory and mobility — proves providers have other reasons to be excited about this growing market.

Respiratory Products

As incidences of childhood respiratory problems such as asthma and allergies increase, the market for pediatric respiratory products continues to grow.

However, when it comes to pediatric respiratory products, “this is not a simple matter of a growing or shrinking marketplace,” cautions Amy Phillips, marketing manager for Respironics. Instead, she says, there are many dynamics that affect the market.

First, the need for services for infants and young children — from respiratory support and monitoring to post-discharge follow-up — has been growing.

“As technology improves and premature infants are saved at earlier gestational ages, the need arises for additional support services for this special infant population,” Phillips explains.

“For example, the use of apnea monitors has been steady over the years. But the population that can potentially benefit from these prescribed monitors is changing and growing. There are more preterm infants, infants and young children with chronic health issues who are now requiring ventilatory support and monitoring.”

A related, growing segment of pediatric care may be less familiar to HME providers. According to Phillips, a continuing trend in early newborn discharge increases the need for infant jaundice assessment and home phototherapy. Because of this, the demand for jaundice management products and services will continue to grow, Phillips says, and HME providers should expect to hear more about this potential market soon.

For other pediatric respiratory patients, compliance with therapies is crucial to the child’s health. This is where those “fun” specialty products play a large role. Kid-sized products decorated with kid-friendly prints and colors can make medical treatments seem less of a burden. Manufacturers also are creating products that cut down on treatment time — another burden that impeded kids’ compliance.

“Compliance is what drives the market. Until recently no one cared about compliance. The doctor gave the product to the parent and that was that,” Fry says.

For example, one of the Revlis products, The Nebo, is designed so that a child can create his or her own device, his or her own “friend,” as Fry explains it. Other manufacturers offer similar kid-friendly respiratory products designed to increase compliance.

“This market has become a bigger and bigger niche market,” Fry says. “Whereas as recently as three or four years ago, a patient got a standard nebulizer, a medicinal-looking box off the street, recently the market has exploded to provide everything imaginable.”

Mobility Products

Like the respiratory segment of the pediatric HME market, the pediatric mobility segment is experiencing solid growth.

“This is due to a combination of solid product advancements, early intervention treatment methods and increased awareness, as well as improved payer acceptance, especially for young adolescent pediatric power mobility candidates,” says Quantum Rehab’s Verrett.

“It’s one of those markets in which there are great products out there, but there’s always room for more choices,” says Michael of Innovation in Motion, which also manufactures power wheelchairs.

It’s this potential that prompted Innovation in Motion to begin offering the Ormesa products — gait trainers, standers and strollers with exchangeable components — to U.S. customers this year.

In the thick of researching the pediatric mobility market, Michael identifies a few trends that providers should use to their advantage. For example, quality counts, and many parents are willing to buy a higher-end product for their children. In addition, parents are looking for products that are simple to use.

However, Abraham Goldstein, president of Drive Medical’s Wenzelite division, points out that only basic pediatric mobility products are reimbursable. Anything custom, he says, “is not available to the end user unless the physical therapist spends a ton of time justifying the patient’s need for the product.” However, Goldstein says, therapists may not have the time to spend because they are not getting paid for it.

Because of this, Goldstein advises HME dealers to stick with providing the basics. “The provider has a choice to make: the quick and easy sale to earn less money, or spending a ton of time on each case to make more money,” he says.

As with the rest of the power mobility market, changes are on the horizon. According to Verrett, providers of pediatric mobility products should be aware that safety requirements for transporting power mobility are changing, as are some seating standards.

Crash testing and WC-19 requirements for safe transportation of power mobility are required for the new CMS Group 5 power chair categories. And the forthcoming WC-20 standard currently in development will allow seating systems to be tested independently, Verrett says.

Tricky Reimbursement

Even with the documented and anticipated growth, reimbursement for pediatric HME remains tricky, particularly in the respiratory segment.

“The most notable development that I have seen during the past 12 months is the lack of change in the reimbursement for infant and pediatric products and the demand on home care providers to provide a higher degree of services,” Phillips says.

Other experts are cautiously optimistic about reimbursement for pediatric HME. The reimbursement channels — private pay and Medicaid — still remain better funded than Medicare. According to Fry, an increased number of providers are going back to the pediatric market to make money due to cuts in Medicare.

Finally, explains Quantum Rehab’s Verrett, “funding is generally — not always, but generally — easier for children with disabilities. While some [state] Medicaid [programs] have made cuts and created pitfalls for this market, it is still generally a very profitable arena for providers.

“Pediatrics has always been a rewarding market segment to service for far more important reasons than finances, but as a very reputable doctor in our industry recently told me, ‘When it comes to funding, you can get whatever you need while you’re a kid, but once you turn 18, it all changes.’”

Selling Pediatrics

The pediatrics market is profitable and successful in an industry where many traditional market segments are slowing. But this doesn’t mean it’s an easy market to provide for.

Working with kids almost always means providers are working with a multitude of other involved parties: parents, therapists, teachers, doctors, bus drivers and other caregivers. Providers must be willing to work as a part of a team to be successful in this market, experts say.

According to Verrett, the pediatrics market is “a time-intensive, highly demanding market to operate within.

“There are many dynamics to pediatrics that do not exist in other markets, such as geriatrics, but if providers go the extra mile and create a top-notch track record, they will become a community and clinical resource in high demand. I know more than one provider who has driven hours and hours on a Friday evening to see a kid smile and make a mom happy.”

And, he adds, “If you don’t have the skills, and the support infrastructure, get out.”

In addition, providers need to work on getting more funding for these special patients, especially if new and better technologies are to become available.

“Keep watch for developments in the pediatric market space,” Phillips advises. “As new products and technology come to the forefront, we will need to bolster our lobbying efforts for reimbursement of pediatric services.”

Experts Interviewed:

Dan Fry, president, Revlis Medical, Windermere, Fla.; Abraham Goldstein, president, Wenzelite Rehab, division of Drive Medical, Port Washington, N.Y.; Rick Michael, vice president, Innovation in Motion, Angola, Ind.; Amy Phillips, marketing manager, Respironics, Murrysville, Pa.; Cody Verrett, director of clinical and education development, Quantum Rehab, a division of Pride Mobility, Exeter, Pa.