New technology and mail-order formats are fine, but seniors need the crucial service component.

There has been much speculation throughout the HME industry over the last several years about the implications and repercussions of a nationalized competitive bidding program. While the general consensus (not including CMS and other political factions) is that the program will create far more problems than it will solve, there has yet to be offered a better solution for fixing a health care system that is most assuredly broken.

The overriding issue is how to deliver high-quality health care without increasing the costs associated with this care. How does one define high quality in a health care setting? As you look across product categories, you could certainly look to the "bells and whistles" associated with product improvements—technology, portability, and comfort improvements—but this is shortsighted. We must add patient education and service-oriented organizational strategies, which studies have shown produced long-term positive results in patient populations. Putting these together would ultimately mean that high quality should be defined as improved outcomes in patient care and beneficiary quality of life. So how do we incentivize the marketplace to provide better outcomes?

In today's environment, there are many HME organizations "competing" in the marketplace. The trend has been toward providing customer service options to differentiate organizations in an increasingly commoditized marketplace. Reimbursement rates have always been a way of fixing pricing, but have provided enough margin to include customer service as part of the business model, and to ensure a variety of options to clients and easy access to products.

With national competitive bidding under its current structure, reimbursement rates will drop to levels at which few will be able to compete, and parties available to participate will be winnowed down to a select few whose main criteria for selection are the ability to meet price constraints, not demonstrate better patient outcomes. In many cases, the features that are now part of the customer service model will no longer be an affordable option for suppliers. The bare minimums of customer service will be met, and beneficiaries will struggle in the long run as investment in customer training and support is cut back by organizations struggling to keep their doors open.

THE REAL WORLD

Most recently, I had a chance to overhear a conversation between a customer service agent at my office and an 84-year-old woman who was using an insulin pump. This senior was having difficulty inserting the catheter for her infusion set, and it took the customer service representative more than 45 minutes to talk her through the process. Additionally, the representative called her back 3 days later to help walk her through the changing process for a second time to ensure that there were no further issues, and that the client was comfortable and not having problems with the insulin pump. This is a client who qualified under all clinical guidelines to be an appropriate candidate to benefit (achieve better health outcomes) from this technology, who had been through hours of intensive insulin pump instruction, but who still needed additional support as improvements in technology made new products available to her in the marketplace.

Imagine this same customer in an environment where customer service representatives are replaced by voice mail systems and computerized order entry systems. Customers will either be forced to go back to their physicians for further office visits (which will incur health care spending for the additional appointment) or use the product inappropriately and end up with costlier complications such as end stage renal disease, amputations, heart disease, hypertension, neuropathy, and retinopathy. Or perhaps there is the scenario where the individual ends up in the emergency department and/or some other long-term care facility.

Jennifer Delphia

Most recently, CMS announced the MSAs that will be included in the second round of competitive bidding. Although included in the first round of the bidding process, diabetes supplies have been omitted from the second round. It seems that CMS will ultimately roll out a national mail-order program for diabetes products and that experience gained from the first round of bidding will be used for the development of this program.

While many people are concerned that a national mail-order program will minimize the support received by using the local pharmacy, it is my opinion that the only inhibitors to support will be a structure that constrains reimbursement pricing to a level below the cost of providing the product. Having spent many years working in the mail-order industry, I have seen what is possible through both local and long-distance support programs. If they are structured correctly, it is possible to positively impact outcomes for clients and ensure that they have the proper training to use these products.

It is extraordinarily important in the dialogue about competitive bidding that we keep the focus on the correct issues—providing quality outcomes at an affordable price. Quality outcomes are beginning to be addressed by the requirement of accreditation for participating Medicare suppliers. The rigorous process of preparing for, implementing, and sustaining the criteria required for accreditation is a great lesson in sustainability for all businesses. In coming to understand your business from both a financial and a customer-oriented viewpoint, your energy and creativity become focused on exactly what competitive bidding is attempting to achieve—quality outcomes at an affordable price.

As a requirement for participation in competitive bidding, accreditation is an excellent tool for identifying quality providers in the marketplace. So how then does CMS address the matter of cost containment? Again, the issue comes back to patient outcomes. No matter what area of HME we look at, organizations that are able to provide high levels of customer support will enable clients to achieve better understanding of the products they are using and the whole purpose these products serve. In the diabetes marketplace, the trend from both manufacturers and suppliers is moving from a focus on measurement of the disease to management of the disease. As product enhancements require greater individual participation and increased understanding of the disease state, and as suppliers provide enhanced support systems, participants will ultimately benefit on all sides.

Jennifer Delphia, MBA, is vice president of client services for Neighborhood Diabetes, Wakefield, Mass, and Hampton, NH. She can be reached via e-mail: .