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
October 1, 2008

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

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:

  1. 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.

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

  3. 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.

  4. 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.

  5. 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

    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

  6. 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.

  7. 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

  8. 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

  9. 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

    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

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

  1. 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

  2. Create a respiratory therapy formulary for your managed care
    — 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:

  1. 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.

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

  3. Prioritize the ideas with your team.

  4. 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

  1. 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

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

    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

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

  3. 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

  4. 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.

  5. 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

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.