Are you a respiratory therapist or a bean counter? While the industry has missed opportunities to prove the value of its services, there is still hope if we act together.

Home respiratory care has gone through dramatic changes over the past few decades. The oxygen concentrator brought an era of freedom to patients who no longer needed to stay in the hospital for supplemental oxygen. Oxygen-conserving devices reduced the weight of portable oxygen systems with an increase in operating times.

Home oxygen patients were diagnosed and placed on oxygen systems as soon as their disease progressed to a point where complications from chronic hypoxia could be avoided. All this progress had a price, and now the organizations that pay for these products have countered with an accountant's approach to home oxygen therapy.

The evidence to support the need for long-term oxygen therapy (LTOT) in the home has been slim, and the focal point of early research was on survival of the patient. Survival is an important end point, yet quality of life is a fundamental issue that is also important to many patients.

The payors of LTOT products determined early that it was the equipment they were paying for and not the therapy. If an oxygen device was placed in the home for patient use, it was assumed that the mission was accomplished. As more and more patients were placed on oxygen, less expensive oxygen products became available, and the focus for reimbursement was on the price of the products. The lower the cost of the equipment to the provider, the lower the reimbursement from the payor.

When reimbursement for LTOT in the home was at a higher level, profit margins for oxygen providers were naturally higher. As competition grew, providers offered clinical services to differentiate their programs from those of the competition.

Respiratory services became available and patients benefited from having professional respiratory therapists assess their oxygen needs, select appropriate oxygen products, and monitor the effectiveness of therapy. This was a fantastic service, yet one thing was forgotten—documentation.

If this professional service proved to be a value, the value should have been recorded and published in peer-reviewed journals to set a scientific foundation for its need and to drive the effective use of products. We now have the problem of trying to close the barn door long after the horse has left because payors only see products for the treatment of oxygen-dependent patients.

PAYMENTS LOW, EXPECTATIONS HIGH

Home oxygen providers are challenged to meet LTOT patients' needs with ever-shrinking payments for devices. Manufacturers have tried to help by creating higher-priced products to increase reimbursement and reduce the expense associated with oxygen delivery and service.

New technologies were welcomed into the market that reduced or eliminated the delivery of portable oxygen—which is one of the higher cost services. As in the past, research on the clinical effectiveness of these new products is missing, so the focus is only on the ability to reduce costs.

Oxygen consumers have added another dimension to the provider's challenge with knowledge gained from the Internet and an active approach to their oxygen therapy. Patients want stationary systems that are small, quiet, and efficient. They want portable oxygen systems that are lightweight and long-lasting.

Robert McCoy

It is assumed that all products are the same, so those that fit patients' lifestyle needs are the ones they want. What if the oxygen system does not do what the provider and patient think it does? Without knowledge and standards for how oxygen systems operate, the buyer must beware.

Home respiratory therapists must understand many issues to provide clinically effective therapy that meets patient and payor needs. Therapists should perform clinical assessments of the needs related to LTOT, yet that has been a value-added service that many providers are eliminating to reduce expenses.

With shrinking reimbursement dollars, providers must evaluate their ability to continue offering clinical services. Providers who do not offer clinical patient assessments depend on physicians to assess and understand the variability of products and patient needs in and around the home. Do the referring physicians know all this?

Respiratory therapists who understand patient needs and the capabilities of the different oxygen systems have another choice—what products should they provide? What if the patient's clinical situation requires the most expensive piece of equipment? What if the provider does not have the right piece of equipment for the patient?

Most providers would use the best equipment they have to treat the patient. Has the respiratory therapist been of value in this situation? If a patient's insurance did not recognize or accept the provider in their program, the patient would be immediately rejected and referred to another provider. What message is being sent in this situation?

What are the differences between home respiratory therapy and the financial side of home respiratory equipment?

CLINICAL CONSIDERATIONS

• Collect the history.
• Know the diagnosis.
• Consider home and lifestyle issues.
• Educate patients about their diseases and available products.
• Assess the home for safety issues.
• Review the equipment for operation and safety issues.
• Assess patients as they are using the equipment.
• Answer all questions.
• Monitor effectiveness of therapy and make appropriate changes as necessary on a timely basis.

ACCOUNTING CONSIDERATIONS

• Use effective sales and marketing to gain referral business.
• Seek high visibility with physicians and payors.
• Cultivate contracts with all payors.
• Obtain the best deal on LTOT products.
• Seek volume purchases and group purchasing.
• Hire the best accounts receivable personnel.
• Manage inventory.
• Reduce expenses for delivery and professional services.
• Increase volume to overcome reduced reimbursement.
• Purchase new technology that reduces expenses.
• Increase cash business.

The accounting considerations list more closely reflects today's providers as they scramble to keep their doors open. The respiratory/clinical section has never been mandated for LTOT and, since the beginning of home oxygen therapy, has not been required.

Home oxygen therapy evolved from rental companies offering oxygen products for home patients. Welding supply stores provided the cylinders for patients. These companies operated just as a welding supplier would for any other customer: they dropped off equipment.

Large rental stores started to rent oxygen equipment, yet the oxygen was in the same mix as party supplies and yard equipment. Again, there was no claim of professional medical services.

Focused home oxygen provider companies and the chains of home oxygen supply companies began to enter the market with an emphasis on oxygen products and services. As mentioned above, the claims to provide better services were a method to differentiate companies and grow their business.

During this heyday of market growth and large revenues, the opportunity to conduct research to document effectiveness of therapy would have served the business well. At that time, there was no need to prove effectiveness because payors were just paying the bill and the providers were making money.

In retrospect, it did not appear that there was a vision of where reimbursement for LTOT might ultimately go, so "if it wasn't broken, why fix it?" Well, now the market is broken and we are returning to the welding supply approach. Providers drop off equipment.

Which approach will fix the situation we are in, respiratory accounting or respiratory therapy? The respiratory accounting approach focuses on reimbursement. As reimbursement decreases, options for products narrow down to systems that have the lowest overall cost to providers.

As manufacturers develop products with lower costs, payors focus on the cost of equipment for reimbursement. They pay less because the equipment costs less. Less reimbursement means providers reduce equipment options and look to manufacturers for lower cost equipment. It is a spiral downward, with patients now owning their oxygen equipment.

The clinical approach focuses on patients and their needs. What benefit does effective therapy provide? If patients are placed on an effective oxygen therapy program, their oxygen levels should not drop during any activity. This means that patients will not desaturate at night because they are checked to ensure they maintain saturation, and if not, corrective action is taken. Patients also will be able to ambulate without desaturation.

If the right systems are provided, patients can maintain oxygen saturation at all activity levels. If patients do not desaturate with activity, they will stay more active. An active patient has fewer complications that require a high cost of service such as hospitalizations, physician's office visits, and medications.

Preventing one hospitalization for an LTOT patient has a better return to the payor and the public than the nickel and dime reductions in payment for LTOT. Why don't payors know this? They have seen the respiratory accounting approach taken by the industry and have determined that it is strictly an equipment business—just like the providers have been showing them after every reduction in payment for oxygen equipment. The industry is coming back with attempts to show that service is a major part of the oxygen program. However, "the horse has left the barn."

The respiratory "accountants" must review their business and determine what holds a better future. If they continue to reduce products and services in the face of reduced reimbursement, they will be responding the same way they always have. If the business is based on fast drop-off of equipment, watch out for UPS, because they have been doing this type of service for years and they are good at it.

Do home oxygen providers want to compete with UPS? What if providers and manufacturers spent their lobbying money for LTOT research on clinically effective outcome measurements?

If the oxygen industry feels it can get higher payments for oxygen equipment after all these years despite continual reimbursement cuts, it would be like trying to beat that dead horse that has already left the barn. The past is past. Let's make the future brighter and healthier for patients and the LTOT industry. Accountants see numbers on a spreadsheet and determine whether they are making money or losing money. Respiratory therapists see patients and outcomes. As providers and therapists, we must determine who we are and what we are here for. And we need to do it fast.

Robert McCoy, RRT, FAARC, is managing director, Valley Inspired Products Inc, Apple Valley, Minn. He can be reached via e-mail: .