There are plenty of ways that HME providers can achieve success in this sector
by Arthur A. Von Ahnen
July 6, 2015

With the senior population growing daily and the trend of aging-in-place, medical alert systems (PERS) are becoming a necessary service for seniors to call for help or assistance when they are at home. In a hospital or a nursing home, there is a call button to press when help is needed. At home, though, individuals are left to fend for themselves. Even when there is a home care service or family members around to offer assistance during the day, typically when night falls patients are vulnerable to emergencies and falls when there is no one there to help them. A medical alert gives them that call button for those times. With this in mind, there is a great opportunity for HME providers and home health care services to add a profitable line to their offerings—medical alert systems. Historically, when a patient or customer has the need for a medical alert system, the HME provider or home health care company refers them to a medical alert company, who sends the system to the patient and then bills the customer accordingly. With these systems becoming such a necessary part of aging-in-place, it only makes sense for providers to carry these products and services themselves. (In the May issue, I explained different types of medical alert systems and how they work. You can review that article online at homecaremag.com/home-monitoring-2015.) One of two systems—a monitored medical alert system or a non-monitored medical alert system\'97will fit perfectly within the business model of an HME company or caretaker service.

Monitored Systems

These types of medical alert systems are monitored 24 hours per day in a central station monitoring call center. When the senior presses thee medical alert button, an operator at the call center answers. For example, the operator will ask, "Are you okay, Evelyn?" If Evelyn says she needs an ambulance, the operator will dispatch one and stay on the speaker with Evelyn to keep her calm until paramedics arrive. If Evelyn cannot speak, the operator will assume the worst and dispatch an ambulance. However, if Evelyn says that she just needs someone, for example her daughter or a neighbor, to help her back to bed, the operator will call them for her. Again, the operator will stay on the speaker until help arrives. An HME provider or home health care company may want to be on the contact list themselves so that if Evelyn needs something at night when they are not there, the central monitoring call center will notify them of the problem so they can respond. This can also be helpful if the senior does not have family or friends nearby; the provider or home health care company can be her emergency contact—and you can charge for this service. All the more reason for to offer these types of services. This type of system is normally billed monthly to the senior, and the medical alert system remains the property of the business (in this case, the HME provider or home health care service). The monthly service charge to the senior is typically between $29.95 and $39.95. These charges can simply be added to the charges for other services such as oxygen supplies, home care services, etc. This is a nice revenue stream (recurring monthly revenue, or RMR) and, of course, when you multiply this RMR by the number of customers you have it can become quite lucrative. Costs to the company are the initial medical alert system/product cost and a monthly fee to the central monitoring call center for their monitoring services. The equipment cost will normally be recovered in the first eight to 10 months of service, and the only cost to you from that point forward is the call center fee (approximately $5 per month or less with more customers). That means that, after the first eight to 10 months, $25 to $35 per month is clear profit. Multiply that amount of RMR by 50 accounts—or even 100 to 200 accounts—and you can see how quickly that monthly income adds up.

Non-Monitored Systems

These types of medical alert systems are not monitored by a central station monitoring call center. Instead, they are programmed to call a senior's family or friends directly, and if no one answers, the system then automatically dials 911. When the senior presses their medical alert button, the system begins dialing up to four of their emergency contacts. When someone answers, the patient can explain what he or she needs. If the patient isn't responsive, the emergency contact can call the ambulance for them. In this case, it's family or friends doing the monitoring. If a patient does not have family or friends nearby, HME providers or home health care companies can be the point of contact and charge for this service. This type of medical alert system can be sold outright with no monthly monitoring charge to the senior. The non-monitored medical alert system is normally sold for a one-time cost of $295 to $395. The profit margin at these prices is between 70 and 130 percent. A non-monitored medical alert system can be sold over the counter in a storefront, and is perfect for an HME/DME or dealer that does not want to be involved with monthly billing and service. This is a great opportunity for companies in the home health care marketplace to expand their offerings and their revenue streams to offer their customers another product to help them age in place. With the option of creating a monthly recurring revenue or up-front profit, there is a program to fit any business model. Medical alert services go right along with the other services you are offering to your aging customers. In fact, no hospital, rehabilitation center or nursing home would allow a senior, or any patient, to be alone without an emergency button that is monitored by the front desk. With that in mind, no senior should be alone in a home without a medical alert system of some sort. Once you have supplied them with hospital beds, wheelchairs, walkers, transfer devices, oxygen and home care service, a medical alert system should be an automatic add-on. This article is part of a seven-part home monitoring and PERS series. Six segments will focus on a particular aspect of the market to provide the insight and resources necessary for success. The final article will answer reader questions; direct yours to sgibson@cahabamedia.com with "Home Monitoring Series" in the subject line. Read all articles in this series at homecaremag.com/home-monitoring-2015