Category — Home Healthcare

Guest blogger Arnon Krongrad, MD

What do these people have in common: 1) a 39-y old stay-at-home mom in Florida, 2) a web master in Melbourne Australia, 3) a gay Broadway producer, 4) the Clinical Director of Psycho-Oncology at the Winship Cancer Center at Emory University, and 5) a dentist in Ottawa? They are all new members of the New Prostate Cancer InfoLink social network.

Prostate cancer is a global problem with no apparent global solution. It is also a chronic and multi-faceted clinical challenge. Be it matters of early detection or treatment selection or management of clinical complications and loss of partner intimacy, there is more to consider than any one doctor or specialist can. Moreover, with the numbing quantity of online information, there is more than any single site can efficiently deliver. Patients drown in useless information while seeking the bit that relates to them.

To address what we perceived a poorly constructed online delivery, we recently resurrected what in 1995 was launched as the world’s first prostate cancer web site, the Prostate Cancer InfoLink. We kept its best parts, including the simple articles and interactive “Ask Arthur,” and launched the new version with modern tools: blog, syndication, and social network.

The New Prostate Cancer InfoLink sites bring friendly interactive mechanisms for helping the individual man and his partners and friends. For example, the “Ask Arthur” has been expanded to be Ask Arthur, Ask Amy, and Ask Arnon, which represents 50 man-years of prostate cancer experience. The social network has uniquely brought together urologists, radiation oncologists, psychiatrists, writers and more. Discussion has been thoughtful and in many cases supremely well informed.

We’re new in existence and new in concept. Please have a look. And if you run a web site or blog, please post links to:

http://prostatecancerinfolink.net articles, blog, and online support

http://prostatecancerinfolink.ning.com social network

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Guest blogger Arnon Krongrad, MD, is Founder and Medical Director of the Krongrad Institute for Minimally Invasive Prostate Cancer Surgery and co-Founder of the New Prostate Cancer InfoLink.

According to a recent article in Forbes this may well be the case. The argument is that as a result of highly differentiated healthcare delivery not perhaps providing the value added clinical and economic benefits - patients may have to turn to a more generic (and effective?) form of healthcare delivery.

While this story is mainly about pharmaceuticals it may well apply to homecare products as is evidenced by NCART - National Coalition For Assistive And Rehab Technology and others actively campaigning to have complex rehab products excluded from the National Competitive Bidding program.

Per-Gunnar Borhaug, CEO Handicare AS and Hardy Brännström President Romedic AB announce the acquisition of Romedic by Handicare.

Handicare AS acquires RoMedic AB in Sweden and strengthens its position internationally within lifting-, transfer- and positioning products for elderly and handicapped.

Handicare’s revenues are estimated at over 225 million Euros ($320 million) putting it in our top 3 European homecare companies (similar category).

Handicare which is owned by the Ferd Private Equity Fund has been selectively acquiring higher value product companies in the Homecare space, including Freelift and Movingpeople in the Netherlands.

We originally wrote about Nordic companies on the acquisition trail end 2005 “The Return Of The Homecare Vikings”.

Seems like they have done pretty well from my vantage point.

or, who should US voters vote for?

According to AAHomecare even more cuts are planned.

Just a few days ago we referenced and commented on the changing face of the distribution channel in the homecare industry in the US and Europe.

In that article we highlighted by way of example Merits (a general homecare manufacturer) and Shoprider (predominantly a scooter manufacturer).

Kymco, a motor cycle manufacturer based out of Taiwan has now established Kymco Healthcare in the UK where they will now have a direct local presence - in fact they are busy recruiting a sales organization.

From OEM product introduction to direct in about 3 years or so. Not bad.

So what? Well it is just another example of where an OEM relationship established by healthcare companies that have shared their product and market expertize has led to a direct market entrance by the Asian manufacturer.

Innovate in the distribution channel or else.

It’s also about Asian sourcing, low barriers to product development and market entry - and who takes what and how much in the value chain.

Invacare has just announced (HME News) that they will no longer sell powerchairs to the Scooter Store. This follows last weeks announcement from the Scooterstore recommending that higher end rehab power chairs be included in the the (divisive - according to the majority of the industry) - national competitive bidding process (pdf download).

While the reason for the split from the Invacare perspective is related to their commitment to individual independent homecare dealers this is symptomatic of a much bigger issue.

What are the key factors…

The power wheelchair manufacturers (and others) have seen dramatic cuts in Medicare reimbursement in this category. Furthermore the new competitive bidding process is also sure to have a negative impact on margins. It also pits traditional manufacturers against the dealer distribution channel as to who and how will both parties participate in this new (coming -already here) environment.

In fact, everything that the major payers (reimbursement agencies, governments and de facto “consumers”) desire.

In order to deal with prices that continue to fall, the major manufacturers, started a few years ago, outsourcing heavily to Asia - as other industries have done when confronted with cost issues (or to increase their margins).

The issue for the manufacturers however is that they outsourced products with little or no intellectual property attached to them - only manufacturing know how. As one would expect, now that Asia has learned (with the help of the manufacturing industry) how to make rehab products - these same Asian companies are doing two things:

• Firstly they are establishing their own operations in the US and other markets. Some examples being Shoprider and Merits. Of course what these Asian companies have is products largely developed with the help of the US domestic manufacturers over the years - but what they still don’t have a great deal of is dealer and direct consumer customers.
• Still no big surprise - except that these (and several others) not only supply the traditional manufacturers with power chairs and other products, now have their own US direct operations, but they also supply national and / or large distributors with product, competing with the self same traditional manufacturers that essentially put them in business.

What’s next.

The competitive bidding process and the lines between manufacturer, importer, distributor and dealer are going to become increasingly blurred.

Companies like The Scooter Store, essentially breaking conventional ranks is a sign of things to came, not only in the US but also in other big rehab markets, like Germany - in fact its already started.

So, unless rehab “manufacturing” companies have IPOD (r) type patents and distributors of enhanced OEM rehab products have lifetime guaranteed customers - be ready for rapid change.

Or better yet be the change maker - and prosper.

Update January 28, 2007: Doug Harrison from the Scooter Store getting more isolated - maybe not. Lou Slangen from Invacare notes

“This is the most defining moment we’ve had in our industry on rehab products”.

Invacare and Scooter Store Heat Up Rhetoric - hmetoday

After all the trauma of the recent deep reimbursement cuts by Medicare, the Office of Inspector General in the United States has found that Medicare, in certain cases pays 35% to 45% more than internet advertised prices for certain power wheelchairs.

The industry is quick to protest and will argue “the higher bar” that Medicare providers have to attain accounts for the difference in cost.

Nevertheless - here is the recommendation of the Office of Inspector General.

RECOMMENDATION
We found that consumers could have purchased most power wheelchairs over the Internet at prices lower than the Medicare fee schedule amounts. We recommend that CMS: Consider performing additional reviews to determine whether the current Medicare power wheelchair fee schedule amounts for certain groups and procedure codes are appropriate.

And Medicare agrees:

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL
RESPONSE
CMS concurred with our recommendation. In addition, CMS noted that, in mid-2008, Medicare payment amounts for power wheelchairs in 10 large metropolitan statistical areas will be based on power wheelchair suppliers’ competitive bids. CMS further noted that it has the authority in future years to use payment information from the competitive bidding program to adjust payments in areas not included in the program. OIG work is continuing in this area. We plan to conduct further evaluations to compare Medicare fee schedule amounts to actual prices paid by suppliers.

The report goes on to estimate a total saving to Medicare and consumers of close to $40 million in the first quarter of 2007.

Again there will be a counter argument from the industry which will point to the extra regulatory and service hurdles that Medicare imposes.

The fact of the matter is that - pricing (and reimbursement) on Power mobility products is under strong review (again). CMS is looking to their newly established national competitive bidding process to lower prices - and it, together with other measures it will take, will again reduce the price of power wheelchairs to the government and consumers.

The full OIG (smallish pdf download) report can be found here.