Home monitoring: down, not out

Tuesday, April 30, 2002

BROOKFIELD, Wis. — If you'd asked a year ago, Buzz Peddicord would have said the home monitoring market for HMEs was dead. Now he's seeing a flickering of life.

Peddicord, whose company HomMed makes a home monitoring device for CHF patients, said the managed care trend toward capitating hospitals has opened a potential market for HMEs.

"Now they can go to the hospital," he said, "and say, 'Hey, want to discharge patients earlier? The answer is usually yes. You want to keep the frequent flyers who bankrupt you out of the hospital? The answer is yes. Well, here, rent this and let your CHF nurses do the monitoring and the patients will be out of the hospital."

When Peddicord says potential market for HMEs, "potential" needs to be underlined. Of HomMed's 73 customers, 71 are home health agencies, which save money by monitoring CHF patients from HQ, instead of making costly home visits. Initially, industry watchers thought HMEs might participate in the emerging market by purchasing the monitoring devices, which cost $7,600, and leasing them to HHAs.

As its turns out, most HHAs choose to purchase the units themselves.

One HME mining that potential is E3 in Houston, Texas. The full-service HME acquired 25 HomMed units late last year and has found a market leasing them to HHAs and directly to patients, said Kevin Tunstall, E3's administrator.

"My opinion is that anything we can do to differentiate ourselves, is a good thing," Tunstall said. "Everyone and their brother is out there pitching to the doctor that they've got the best service. But if you've got a CHF patient that you want to monitor, who is going to do that for you."

E3 rents the unit to a patient for $300 a month; the fee it charges an HHA depends on the individual contract. E3's breaking even with the service, but expects it to lead to additional rental business — beds, oxygen and other services CHF patients need, Tunstall said.

Nevertheless, while E3 has had some success, it's still a hard sell.

"Most of the home health agencies don't seem to be interested in it," he said. "Even though we can demonstrate that it will save them money, people are reluctant to change. I've seen home health agencies come and go, and I think it's due in part to their reluctance to change with the times." HME