George B. Mallory, MD, needed help. As director of the lung transplant program at Texas Children’s Hospital in Houston, he wanted to find a better way to remotely monitor his young lung transplant patients for signs of infection or organ rejection than through mailed spirometry test results.

“You can have the best machine in the world, but if you are not getting the data back in a timely way, you are missing the boat,” he says.

Enter Terry Respiratory Care. At the invitation of David Blanco, a pulmonary diagnostic laboratory technician at Texas Children’s Hospital, Terry Hull, CRT, RCP, and Terry Respiratory’s operations manager and owner, sat down with Mallory and Blanco to try out a variety of new spirometry devices that incorporated telemedicine options. They poked, prodded, and tried the devices on themselves, and once they finally settled on a couple of options, the real work began. Before the three men could set up a single patient with a spirometer that could email its results to the hospital instead of relying on the US Postal Service, they had to get the patients’ insurance companies to agree.

“The hardest part, actually, was getting a package put together as far as price and then getting it recommended to insurers and see if we could get it approved in a timely fashion,” Mallory says.

A large portion of this task fell to Terry Respiratory. Originally, Hull wanted 2 weeks to get preauthorization from the payors, but because lung transplants are scheduled based on when lungs become available and not based on insurers’ timetables, he ended up with less than a week.

Is investing the time to fight for reimbursement for a whole new medical device service, which realistically may earn you only a few more clients per year, a smart business decision? Yes, if you know how to combine the complicated clinical side of pediatric respiratory care with good business fundamentals, Hull says.

Individualize Managed Care
One of the keys to success in pediatric respiratory care is being flexible and able to negotiate with payors. “Some days the business side of the formula is more of a consideration than the clinical side and some days the clinical side is more of a consideration,” Hull says. “You can do volume and still manage case by case.”

It is hard to argue with his results. Since Terry Respiratory Care’s start in 2000, the company has experienced tremendous growth. From February 2002 through February 2003, the company grew 307% despite obstacles, such as managed care, the threat of competitive bidding, and state-mandated reductions in Medicaid allowables.

Today, Terry Respiratory Care employs 18 people and has opened a satellite office 90 miles east of Houston in Beaumont, Tex. It cares for around 500 active patients, of which 70% to 75% are children.

While being in Houston—a regional medical center with one of the country’s largest pediatric hospitals—has certainly helped Terry Respiratory find success in the pediatric respiratory niche, Hull insists that his model of combining good clinical practices with quality equipment, well-trained, hard-working staff, and a good knowledge of payor and reimbursement guidelines can work anywhere and in most any company.

“We have a good strong office operation and we have diligence in our billing and collections,” Hull says. “We precertify and preauthorize everything. We don’t say yes to everyone just to please the system. We are really geared at doing it right.”

Know Your Strengths
Terry Respiratory’s specialty is high-end respiratory, which includes providing ventilators, humidification systems, oxygen, sleep therapy equipment, nebulizers, pulse oximetry, a variety of supplies, and related products and services such as enteral feeding, specialty cribs, and care for tracheostomy patients.

“The one thing we stay away from is wheelchairs,” Hull says. “We believe that children really need a specialty provider of wheelchairs. That is something we are not and we don’t pretend to be.”

Throughout the company’s growth, maintaining its high quality standards has earned Hull the respect of his area’s referral sources, such as Mallory and Blanco.

“In our market, Terry Respiratory Care has distinguished itself head and shoulders above the competition as being the people who do pediatric home care with expertise,” Mallory says.

But Hull insists the key to his business success is not trying to win a popularity contest among referral sources. The respect of referral sources is simply a natural consequence of being enthusiastic about pediatric respiratory care and providing these products and services as well as possible. “When you are doing what you are trained to do, and you are doing it the very best you can, and you enjoy it, you definitely set yourself apart,” he says.

Hull knows that being enthusiastic about the pediatric respiratory niche might raise a few eyebrows at companies more intent on simple, large volume business that does not need to be managed as individually as pediatric respiratory care must be. In fact, what inspired him to create his own company was working for a national company that was so intent on the Medicare oxygen business, there was little room for him to explore his interest in pediatric respiratory care.

“There is a different dynamic to this whole business of pediatric respiratory home care and you will see small companies and big companies try and can’t make it work,” he says. “Or they are doing it and they think they are doing it well and they are not. We know that is an element because those customers, over time, gravitate toward companies like Terry Respiratory.”

Starting his own company was definitely a risk, but Hull says the positive feedback he got from physicians and patients has made it well worth the gamble. Yes, sometimes it is trying to negotiate with payors for new patient benefits, such as spirometers that can download information to a laptop computer for emailing to the hospital, as in the case of Mallory’s patients. But to give lung transplant patients a device that will allow them to go back home and live with their families is something no other job can offer him.

“It’s amazing to see the kids’ faces light up,” Hull says. “These kids have struggled just to breathe and have dreamed of living a normal life. They have spent so much time in doctors’ offices and hospitals. After having had their lung function tested so many, many times in clinics and hospitals, they immediately realize that [this device] gives them personal control and freedom.”

Plus, if just one infection is caught early enough to be treated at home or one episode of rejection is avoided, the insurer and parents can save thousands of dollars. In short, as Hull says, “Everybody wins!”

Lena Lindahl is editor in chief of Dealer/Provider.