Few niches in the HME business are as fraught with risk—but as potentially rewarding—as home mechanical ventilation. It is a specialty that requires an exceptionally large investment in equipment, technical support, and clinical personnel, not to mention a need to intimately know the reimbursement ropes and how to deal with sometimes terrified family members who must take on care duties that are customarily the province of respiratory therapists.

Moreover, ventilators are seldom short-term rentals. They can remain in a home for many years. During that time, they could undergo many rounds of servicing, and may need to be swapped out with another model should the installed machine become outdated or, worse, recalled by the manufacturer due to a design defect.

“With home mechanical ventilation, you are putting on the line tons and tons of money—make one mistake and you could lose all your profit; keep making mistakes and you could easily be driven out of business,” says Alan Kirk, RCP, vice president and operations manager of Total Home Health Inc in Elgin, Ill.

Growing Acceptance
Demand for home mechanical ventilation has risen over the past decade, spurred by the hospitals, physicians, and families who have steadily grown more interested in caring for ventilator patients at home. “One of the drivers in that trend has been the mandate given to state-funded agencies to make every reasonable effort at keeping families together,” Kirk says. “Ventilator technology is such now that it is a very reasonable proposition to bring the patient home, whether we are talking about a baby or a grandparent.

“Another driver has been cost. It is a lot less expensive to care for ventilator patients at home than anywhere else, even though a home health agency is usually involved and is providing visiting-nurse coverage 12, 18, and sometimes 24 hours a day.”

But cost also discourages most small- to mid-sized HME companies from venturing into this arena. Kirk says the minimum investment to break into home mechanical ventilation is on the order of three-quarters of a million dollars.

“It takes a strong commitment to investment,” he says. “The ventilators themselves are not inexpensive items.”

Total Home Health has offered ventilators since the company started in 1988 with an inventory of about a dozen machines. All of its ventilators are high-tech and cutting-edge, Kirk says. Carrying only the latest in ventilators enables the enterprise to stand apart from its competitors, especially the large national companies.

“When something new comes out in the way of ventilators, we are usually the first to jump on it in our market area,” Kirk says. “The big outfits, because of the way they are structured, have to go through 3 to 6 months of test-market trials before they will offer something new nationwide. What that means is it takes them 6 months to catch up to us. We can go immediately to referral sources and offer them the cutting edge right now, not 6 months from now.”

Their strategy seems to work. When Manny Likou, RRT, founded Total Home Health, after selling his previous company, Respiratory Therapy Services, in 1985, it was a mom-and-pop operation. Today, with 42 employees, Total Home Health is on the verge of qualifying as a midsized business.

Getting Your Ducks in a Row
Topping the list of challenges facing midsized companies involved in the field of home mechanical ventilation, such as Total, is reimbursement. “Look, anybody can do concentrators and oxygen and get reimbursed adequately for those,” Kirk says. “But when you are talking ventilators, you have to have all your ducks in a row, get all your medical documentation straightened out ahead of time, and get all the orders signed before the patient comes home from the hospital.”

The biggest potential for losing money comes from the reimbursement battle over the supplies that go with the ventilator. “You can get into protracted arguments with the payors as to what is and is not included in the covered benefit for supplies,” Kirk says. “For example, tracheotomy tubes. Do the family, the caregivers, and the prescribing physician want the least expensive tracheotomy tube or the most expensive one, the permanent one or the disposable kind, and how many of each? We will have the referral source telling us it wants the family to receive one disposable tracheotomy tube for each day of the month, but the payor will counter that they are only going to reimburse for four over the span of the entire 30 days.”

Payors can be inflexible, so Total Home Health often must tell referral sources and families that what they are requesting is unreasonable in light of payor-dictated economic realities.

With Total Home Health’s market strategy based around its ability to provide the most futuristic equipment, the company also must walk a fine line between what it can provide and what payors, who balk at picking up the tab for new technology they feel is unproven, will cover. “We know before we supply the ventilator whether that patient’s insurance is going to pay for it,” Kirk says. “If it will not, then we work with the referral source to find an alternate [product] that will meet the [patient’s] need but that the payor will accept.”

The other daunting challenge in the home mechanical ventilation business is staffing. “To be successful, you have to have on staff a team of respiratory care practitioners (RCPs) who can be assigned to handle ventilator patients exclusively,” Kirk says. “They can not be focused on any responsibilities other than ventilators because vent-patient care is a very time-consuming service line. Typically, the RCP spends 4 hours or longer in each home, every time a visit is conducted—and they visit each home at least once a month on average. Consequently, this requires an additional strong commitment of capital.”

Imperiled by Turnover
The need to keep talented staff is clear to Genesis Respiratory Services in Portsmouth, Ohio. Early on in its home mechanical ventilator program, Genesis encountered problems with some of the home health agencies responsible for providing patient care, and that prompted the company to step into that arena itself.

“We would spend a lot of time and money to train the agencies’ personnel on how to operate the ventilators, how to respond to alarms, how to troubleshoot, and how to make the family really comfortable with having the ventilator patient in the home in the first place,” says Donna Southworth, RRT, Genesis’ president. “Then, it seemed like a few weeks later, those staffers we trained for the agencies had quit their jobs and moved on to something else. We then would have to repeat the entire training process as replacements were assigned to the case. Then, a short while later, those would be gone as well. It was frustrating for us, but that was nothing compared to the impact on the patients and their families—basically, the frequent turnover was affecting the quality of care the patients were receiving.”

Genesis solved the problem by buying the local franchise of Interim Healthcare, a home health agency. “This gave us better control over the situation,” Southworth says. “From that time on, we were able to recruit quality personnel to administer the care in the home, and we were able to do what was necessary to retain them.”

Genesis employs six therapists, two LPNs, and a support staff of 34. Of the six therapists, five are RCPs. The company also employs five other RCPs who work for the company on a contract basis.

Southworth says the key challenge of offering ventilators is working with cases where the patient has been rushed home from the hospital before the family and in-home caregivers have been adequately trained to operate the equipment and maintain the tracheotomy site. “In those situations, we have to respond by altering the training process in ways that allow the family to learn what they need to, but at a much more accelerated pace,” she says. “That’s harder on them, because there is so much to know and be practiced at. But we have developed the teaching techniques that help them get through this fast-paced learning process.”

Still, if the RCP who is providing the instruction believes the family and caregivers will be inadequately prepared by the time the ventilator patient is scheduled to arrive home, Genesis will negotiate with the hospital for a delay and use the extra days to further work with the family.

In some extreme circumstances, the RCP may conclude the family is never going to be able to take on the responsibility of caring for the ventilator patient. In these cases Genesis must map out a new plan for getting the patient into a home environment. “Our primary concern is always the patient,” Southworth says.

Last-Minute Cold Feet
Not every family appreciates having a child or grandparent brought home on a ventilator. Some find the notion of being responsible for a ventilator patient distressing to say the least. “Either they do not think they are up to it or they realize just how much this is going to alter their lifestyle,” Kirk says. “If they are honest about it, they will tell us up front that this is how they feel. But what can happen is that we will spend 6 months working to bring the patient home on the ventilator, have the house set up and ready to go, and then, at the last minute—the day of the transition—the family will change their mind and say forget it.”

Total Home Health tries to minimize the incidence of last-minute wavering by getting a sense of the family’s stability as early in the process as possible. If it appears the household is in serious turmoil, the company may advise the referring sources to reconsider the plan to transfer the patient home.

“We have learned that the family where the plug is most likely to be pulled on our efforts to bring the patient home is the one where the husband and wife are having marriage problems,” Kirk says. “That is a huge red flag.”

Given that home mechanical ventilation is a complicated product category with significant financial risks, why stick with it?

“It’s a good niche; there is not a lot of competition to worry about,” Kirk says. “As a result, you’re freed to concentrate more on delivering quality because you are not constantly having to think up new ways to stay a step ahead of your rivals. But most important, we keep at it because we are passionate about ventilators, and about the thrill of being able to get patients out of the hospital and back home where they belong.”

Rich Smith is a contributing writer for Dealer/ Provider.