Pediatric market shows promise by HME News
This article is written by: John Andres at HME News
HME providers searching for viable non-Medicare business segments may want to take a close look at pediatrics.
Furnishing HME to children conveniently avoids the trappings of Medicare, while enabling providers to continue handling the familiar mobility, rehab and respiratory product lines, market specialists say.
Success in serving this patient base, however, requires special clinical skill, a depth of diplomacy and an air of sensitivity, says Amy Morgan, national clinical education manager for Lebanon, Tenn.-based Permobil.
“Pediatrics is definitely appealing because kids aren’t under the Medicare system,” she said. “However, it is important to remember that kids are not just small adults. They have unique needs. Providers who decide to work with pediatrics should be sure that they are not applying principles of adult rehab to children. Consideration needs to be taken for development and growth, as well as a child’s ability to interact in age-appropriate activities for learning and socialization.”
Pediatric patients have medical needs that span the HME categories—mobility, rehab and respiratory, not to mention specialty areas like diabetes, asthma and sleep apnea. Providers serving adults may only handle a portion of these categories. Becoming a “one-stop source” for pediatric products may give providers a competitive advantage, but market specialists acknowledge this is not always possible.
“Most importantly, parents and families want to work with someone they can trust and has the experience to provide the most appropriate recommendations for their child,” Morgan said. “This caliber of provider is not always a part of a ‘one-stop shop’ business. For example, a child may get a mobility device, car seat or bathing equipment from one supplier, and oxygen, ventilator and G-tube supplies from another. This is how many families judge the quality of a providerˇ—from their willingness and ability to help and respond and going the extra mile to make things right for that child.”
While eluding Medicare is a plus of the pediatric market, providers may be trading one headache for another with Medicaid, market specialists say. Kirk MacKenzie, president of Matthews, N.C.-based Snug Seat, says complications with Medicaid have caused more than one provider to exit the market in despair.
“We are finding fewer HME dealers willing to sell our products because of the continual squeeze on reimbursement by the various state Medicaid bodies,” he said. “Many of our products have a moderately low price but still require patient evaluations, as well as setup and delivery. The resulting profit margin can be pretty low when you calculate in those additional costs.”
Providers are experiencing the same issues with Medicaid as with Medicare—shrinking funding levels, tighter requirements, and closer scrutiny of claims, MacKenzie said.
“I am not sure Medicaid offers any advantages over Medicare, but when a dealer provides products for a pediatric patient, there is an opportunity to acquire customers who will continually require products as they grow and mature.”
Pediatric CPAP has been a reliable product line for Export, Pa.-based manufacturer Circadiance, but producing a face mask for infants has been problematic, concedes CEO David Groll.
Preliminary research of Circadiance’s face masks by some doctors and respiratory therapists suggests that soft cloth face masks do a better job than plastic masks of reducing or completely avoiding the occurrence of pressure ulcers for pediatric patients, he said. Yet funding the development of such a product requires significant investment and professional investors are wary of pediatrics, he said, “because they see it as a relatively small market.”
Subsequently, Circadiance has launched a pledge campaign to determine if there is adequate interest to move forward with a crowdfunding campaign.
“If the people who are most affected by this problem show enough interest in our solution to make a pledge of support, we will move forward with the crowdfunding campaign,” Groll said.