While the home respiratory therapy business has been under siege from Medicare and managed care over the years, it still remains a viable product line
by Alison Cherney and Jacuelyn McClure, RRT, FAARC

While the home respiratory therapy business has been under siege from Medicare and managed care over the years, it still remains a viable product line for the HME provider — provided of course, it is managed well to produce profitability. In today's competitive environment, HME providers need to develop respiratory programs that set them apart in the eyes of their customers.

The Role of RTs in the New Cost Paradigm

With continued cost pressures, providers need to look at any extraneous costs in their business. The application of respiratory therapy clinicians in the business may fit into this area. Their roles must be examined carefully to ensure they are efficient and that their return on investment pays off for the business.

This examination can, in fact, be quite a challenge in balancing and satisfying equally the clinical and business vision for your company. It is, however, a necessary one.

Before you jump to cut your respiratory therapists, look at their role in the business and at process efficiencies. Have your RTs complete a “time/motion” study. Such a study requires that each RT record his or her time for a typical week — every minute of it. Either the RT manager or the branch manager then analyzes the time spent by the RT and decides which areas continue to be critical to the performance of the RT business.

Remember this rule of thumb: 80 percent of your respiratory professional's time should be going to the 20 percent of your patient population that requires it (the non-compliant, higher acuity patient, assessment of patient-equipment needs, best practices, etc.).

For example, some keys that need to be examined include:

  • Creative Respiratory Therapy Programs

Administrative vs. clinical time — Identify any unnecessary administrative tasks and eliminate them or move them to less expensive personnel.

  • Systems issues — What gets in the way of the RT's time in terms of system failures. Take a look at your intake, monitoring and discharge systems and eliminate those systems and processes that take up time.

  • Program monitoring — Do you have RTs monitoring nebulizer orders or CPAP mask follow-ups? Make sure that your specialty programs are monitored by administrative personnel and not by your clinicians.

  • Identify time-wasters — Your RTs need to be focused on clinical issues, and their patient management time needs to be maximized. What else is in their way?

    Developing and marketing chronic disease pathways (COPD) can help you differentiate your company and increase patient referrals at the same time.

    Think of it this way: The pathway is the foundation for all product interventions. You need to build the foundation before adding product programs to the mix. Use education and therapeutic principles to identify early referrals and intervene with your clinical professions and service products.

    You and your clinicians are an ideal resource for respiratory patients who wish to better manage their disease. Remember to measure your results and follow best practices while developing and orchestrating these pathways.

    Generate creative ideas. Take a look at your major product lines, talk to your customers about their needs, ask your sales reps what ideas they have about programs, find out what programs your competitors are offering that you are not offering, talk to your manufacturers about their program ideas. Talk to your buying groups. Talk to consultants and to your clinicians.

    Here are 11 creative respiratory therapy programs that your organization might want to consider:

    Nebulizers — While there is little profit in a nebulizer, nebulizers represent an important entry point for the oxygen patient. Put a program in place to run overnight oximetry on all nebulizer patients. Run these overnights through an independent testing facility.

  • CPAP — Move CPAP to bi-level PAP for patients who are receiving pressures that are too high.

  • CPAP-Oxygen — Many CPAP patients require oxygen at night, and they may need bleed-through oxygen. Put a program in place to test CPAP patients for oxygen needs.

  • Spirometry — Many physician offices use spirometry to document and identify pulmonary function. Sell spirometers to primary care physicians who are not using these devices. Work with them to set up a protocol for their office and find new patients who require respiratory therapy services.

  • Consumer sleep apnea marketing — There are millions of undiagnosed sleep apnea patients in the United States: 12 million at a minimum. However, nobody really knows how high the number might actually be. With an ever-increasing obesity rate, selling sleep apnea services to consumers is going to be big business.

    Sell sleep apnea services to employers. Think about trucking companies. (It is the law in many states that truckers need to be tested for sleep apnea.) Think about other employers whose employees are in high-risk jobs and cannot afford to fall asleep.

  • Educate primary care physicians about sleep apnea — The average primary care physician has a large number of undiagnosed sleep apnea patients. Educate them about the disease and about how to diagnose and treat it. If you can't get the local sleep lab to write an order for your products, convince your primary care physicians to tell the sleep lab where to send the sleep apnea patients.

  • Get primary care physicians interested in a sleep lab — You are in a competitive market with only one or two sleep labs and the docs in these labs are referring to other providers? Get creative and find a doc who is interested in sleep. Talk to him or her about the business opportunity. Create another customer for yourself.

  • Provide management services to sleep labs — Help them grow their business; show them how to increase their business in the home. Many labs could build their home care business. Serve as an expert for them, and provide training services about home care.

  • The old “assessor” program — This program was developed by one of the national companies years ago. Assessors review potential oxygen patient charts (upon an order by the physician) and identify patients by oxygen and potentially other services. The assessors serve as educators and liaisons to primary care physicians.

    Best-practice processes need to drive product decisions and be under the trained guidance of the HME provider's credentialed respiratory therapist as directed by the physician's order. The physician should write the prescription for oxygen aimed at ensuring a target clinical goal (Spo2) at rest, during exercise and during sleep, and defer the process of product selection to the HME provider using a best-practice oxygen process.

    The HME provider should select what method of oxygen delivery, for example, is appropriate for each patient. The task of matching patients with the best system to meet their needs has always been an art. We believe it can become a science, thus supporting the bias.

    Empirical models that take into account the clinical, physical, mental and home environment of the patient, along with the operational considerations of the HME provider, are available. Only the skilled HME provider can look at all of these variables and make the appropriate recommendation for the patient. Most physicians lack the time and expertise to get into this level of detail.

    This model has become a valuable part of best practices for oxygen delivery and other respiratory processes.

    Create a retail sleep apnea center — Is there somewhere for your customers to come and try on masks? Why not? Do people really just want to be handed a mask without any input? No, they like selection. Can you give it to them? Could you tie it into a sleep apnea education program where people with sleep apnea could speak to each other? Could you form a sleep apnea advisory group with consumers?

    Become the experts in compliance tracking. Have your clinical professionals build a total compliance process that assesses patient adherence and responsiveness to the therapy.

    Marry your sleep system with patient management know-how, be it through technology or good ol' telephoning. Just do it and measure it.

  • Create a respiratory therapy formulary for your managed care customers — What products make sense for the respiratory therapy patient? Could your RT group advise a medical director of a managed care organization on these elements? Could they advise the medical director of the assessment results and the “right product for the right patient” results? Market your best practices to this audience.

    There are lots of ideas out there; these are just a few that we have personally seen work for HME companies. The idea part is easy; it is the implementation of the idea that takes time and diligence. Select one idea that makes sense for your company and your customers, then take the time necessary to get it developed.

    To evaluate ideas, follow these steps:

    Create an “opportunity screen” to decide the criteria by which ideas will be prioritized. Consider the development of competitive advantage, revenue generation, profitability, fit with current business, ease of implementation and return on investment.

  • Evaluate each individual idea with your operations, finance and marketing/sales team.

  • Prioritize the ideas with your team.

  • Pick one and move to the implementation phase.

    Elements of a Program

    There are a number of key elements that need to be considered in respiratory programs. These include the five elements of marketing:

    Define the target market — A target market means the segment of the market to which you are promoting the idea. Have you ever figured out that one customer type doesn't desire the same things that another one does?

    Pulmonologists, for example, are experts in respiratory care; they do not generally need a lot of clinical handholding. Primary care physicians, on the other hand, are not experts in respiratory medicine; they need education and assistance. Consumers are completely different.

    Define the target markets for your program. The tighter your target audience, the easier it is to define the program and make it work.

  • Develop the service line offering — An offering is a program. It includes program objectives, policies, procedures and systems.

    It means that all of your personnel are trained in the program — your intake personnel, your clinicians, your billing employees, your salespeople. It means everybody in the organization can define the program, and they know exactly how they fit into its implementation.

    Service lines are developed by a process in which marketing/sales, operations and financial team members put the program together.

  • Distribute the offering — Will you be delivering the program offering to the home? Will customers come to you? Will you be setting up nebulizer “closets” in physician offices? Where will the program take place? Get your distribution strategy in place. Start with the easiest method of distribution, then add new places as your firm becomes adept at successful implementation.

  • Price the program — If the program is truly unique — and it exists outside of Medicare — then price it outside of Medicare allowable. Create your own pricing models for managed care or cash-based programs.

  • Promotional strategies — To date, 95 percent of all promoting in this industry has been through field sales reps. This is a great strategy. However, it is expensive. Very few HME companies use telesales/customer service programs to current customers, email programs to top customers or use public relations effectively to build consumer marketing.

    If you are promoting sleep apnea to primary care physicians, why not put a “Primary Care Medical Advisory Group” together. Have its members help you design the program, figure out its distribution and tell you exactly how to promote it. Make it easy, and make sure you look at other options. The cheapest promotion is to your current base of patients and referral sources.

    Designing Great Respiratory Therapy Promotional Tools

    Not only are we bored by most of the promotional materials in the market but customers are bored with them, too.

    Physicians don't look at the vast majority of information that comes their way. Discharge personnel prefer materials that answer the questions they most often have, and consumers desire materials that answer the questions they really have — not the ones HME companies or manufacturers think they want answered. Who really desires what?

    Pulmonologists — Pulmonologists are seeking technical and clinical information that helps them build their practice revenue, become more efficient and learn the latest and/or most clinically effective techniques for their patient populations. Many of them need business advice as they are under pressure from payers on many of their CPT codes.

  • Primary care physicians — It is interesting to note that the average primary care physician has half of his or her population with COPD. That is right — half. Yet, few PCPs know how to identify early COPD patients. Primary care docs need education: Get them abstracts and give them respiratory therapy speakers. Consider telephone CME programs.

  • Discharge personnel — These personnel want information related to specific respiratory programs, clinical benefits, reimbursement, service areas and how-to information for their patients.

  • Consumers — Get a great Web site in place. Make it gorgeous and useful. Get consumers educational materials that are useful, and give them the latest information they need, written in language they can understand.

    The Future of Respiratory Therapy Programs

    Economic analysis will become part of the norm when deciding on the most clinically appropriate and effective therapy for your patients. For example, more than one method of oxygen delivery may be clinically appropriate and effective for the patient, so why not recommend or provide the system that is most profitable for your business? No one can afford to run in the red.

    Economic models built on real data input can provide the empirical cash-flow analysis necessary to pick the right product for the right patient.

    Health care outcomes will become part of your daily vocabulary in cost, clinical practice and patient satisfaction. Outcomes management provides a means to work collaboratively with other providers and to demonstrate the value of your clinicians and your company as a whole.

    Finally, place your respiratory professionals in the “gatekeeper” role of your clinical processes, with the patient at the centerpiece of all business strategies. This will drive matching equipment to the clinical requirements and lifestyle of the patient — and the reimbursement climate. And, be sure to utilize and push manufacturers to create innovative and revolutionary technology that is clinically superior to what is available today.

    Alison Cherney is president of Cherney & Associates Inc., a Brentwood, Tenn.-based marketing and sales consulting company that provides strategic planning, sales management and sales training services. You can reach her through www.cherneyandassociates.com.

    Jacki McClure, RRT, FAARC, of McClure Connection, Melbourne Beach, Fla., offers clients assistance in government relations, reimbursement, sales training and sales and clinical marketing. You can reach her at jmcclure@glsenterprises.com.