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by: Liz Beaulieu - Wednesday, January 6, 2016

All eyes were on the big guns—Drive Medical, Invacare, Inogen and ResMed—in 2015.

Or so it would appear, according to the five most read vendor stories for the year.

Drive Medical took the No. 1 spot with its acquisition of DeVilbiss Healthcare. This deal culminated a busy 2015 for Drive: It had already made a handful of other deals throughout the year. With DeVilbiss and some of the other acquisitions it has made in the rehab market, Drive is clearly trying to up its clinical game. That’s also what happens when you pick up a guy like Joseph Lewarski and make him global vice president of respiratory & sleep.

Speaking of Lewarski, it wouldn’t be a list of most read vendor stories without a story about Invacare, his former employer. It’s just too bad the story wasn’t “Invacare lifts consent decree.” Instead, at the No. 2 spot, it’s “New product readies Invacare for comeback.” The company has been busy putting its ducks in a row for a life post-decree (receiving approval for an upgrade to its TDX line of power wheelchairs and beefing up its sales force), but until it can take that huge weight off its shoulders…well, there’s only so much it can do.

Invacare also took the No. 4 spot with “Invacare’s Monaghan takes control.” Monaghan, the newly minted president and CEO, personally headed up the company’s beleaguered North America HME business on an interim basis. Later in the year, he passed the baton to Dean Childers, who took the role of senior vice president and general manager of the North America HME and Institutional Products Group businesses. Monaghan has since also added chairman of Invacare’s board of directors to his resume.

Coming in at the No. 3 spot was Inogen (“What’s the hold up at Inogen?”). Not unlike Invacare, Inogen endured some scrutiny in 2015. It had to delay reporting its fourth quarter and year-end earnings because management discovered “certain potential accounting matters” during the first quarter of 2015. After an internal investigation, however, the company characterized the matter as minor and reported it had minimal impact on earnings (it reduced net revenue for the fourth quarter by $300,000 and net income by $100,000). Still, readers likely couldn’t resist a story about a direct-to-consumer manufacturer and five sales reps who “falsified or improperly modified sales and rental order documentation.”

ResMed took the No. 5 spot with “ResMed bets on healthcare informatics.” This has been a big push for ResMed in 2015 and likely for years to come. There’s a virtual arms race between the vendors in this space—like in no other space of HME, I think—to make devices that not only look slick but also have support tools that make it easier for HME providers and their patients to use them and keep using them. Think compliance and monitoring management systems and user-friendly apps. Where will these vendors go next?

These four companies will likely continue to make headlines in 2016, but other companies to keep an eye on include EZ-Access, which plans to make a number of additional acquisitions this spring to create a “one-stop shop” for home modifications equipment; O2 Concepts, which expects its modem-equipped portable oxygen concentrators and the data they provide to gain traction; and ROVI Mobility and Merits Health Products, which are making a run for the complex rehab market.

Stay tuned.

by: Liz Beaulieu - Monday, December 21, 2015

I started down an unsuspecting path last week when I interviewed Chris Blackmore at Merits about the company’s entrance into the complex rehab market.

I should have known this would be a bigger-than-I-realized story, given our coverage of Shoprider getting into the market in 2014 through ROVI, and our coverage in the January issue of Drive Medical shooting for a more formal presence in the market in 2016.

But it wasn’t until I talked to Chris that I started putting 2 + 2 together.

So I called Cody Verrett at ROVI to see how things were going for that new entrant in the market. “The product is going in the right direction,” he said. “We’re seeing steady increases in all the right metrics—quotes, orders and amount of product shipped per day.”

Then I called a number of others to talk about why we’re seeing all these new entrants in the market. So far, the going reasons range from the obvious (shelter from competitive bidding pricing) to the interesting (the downfall of The Scooter Store has meant an increase in the number of Group 3 wheelchairs being prescribed).

Then I got to thinking: Who has the most to lose from these new entrants in the market? A call to Quantum Rehab and Permobil may be in order.

But like Martin Szmal said, “I don’t think there’s any down side to having more competition and more selection in regard to the beneficiary, as long as they’re not me-too products and they’re bringing something new to the market.”

I need to make other calls, but keep an eye out for a story about Merits and one or two other stories in upcoming HME Newswires and the February issue.

Stay tuned.

by: Liz Beaulieu - Friday, December 11, 2015

I’ve never fielded as many calls from private equity, investment and consulting firms as I have in the past two weeks. Ask Managing Editor Theresa Flaherty.

What do they all want to know?

Mainly, how many HME providers were there before competitive bidding, how many are there now and how many will there be after Medicare expands pricing from the program to non-bid areas?

Put another way, how much has the HME market consolidated in the past five years, since the program was first launched, and will it continue to consolidate after said expansion?

They also want to know: What percent of the market do the nationals have wrapped up, and what’s the makeup of the remaining market? Is it mostly regional- or mom-and-pop-sized companies?

Theresa and I have been wondering, why now?

Medicare’s plans to expand pricing from the program to non-bid areas is a timely and obvious reason. But I don’t seem to recall the expansion in Round 2 resulting in this many phone calls from outside interests, and that involved expanding the program to every large metro area.

The other timely and obvious reason: Lincare signing an agreement to buy American HomePatient, witling down the number of national players from four to three.

Theresa happened to be on the phone with some industry analysts to report on the Lincare news, and I heard her ask at least one of them why these private equity, investment and consulting firms would be so interested in the HME market right now.

The analyst said, in nutshell, that the demographics of the aging population are so attractive that when the nationals make a big move like this (the last such move was probably Linde buying Lincare for $4.6 billion in 2012), eyes tend to drift once again toward our small sector of the healthcare industry.

by: Liz Beaulieu - Wednesday, December 2, 2015

Managing Editor Theresa will attest that I’ve been trying to write a blog for a few days now. Sometimes it comes easy; sometimes it doesn’t.

If you’re Theresa, you don’t force these things. But I have a to-do list that’s getting longer and a new conference to avoid programming (ahem), so each day this week, at lunch, I’ve come back to writing this blog.

One of my go-to blogs in these situations is a list of the most read stories for the most recent year, but I already did that in September. (I must have been really desperate then; who does a year-in-review when there are still three months left in the year?)

But what about the most read blogs of the year? I haven’t done that yet and since it’s December I feel it’s a more than valid topic.

Each of the three of us here at HME News tries to blog once per week. Over the course of a year, that’s 156 blogs. That’s a pretty good pool to dive into.

So here are the top blogs from each of the three of us for 2015:

From Editor Liz: “Significant shuffling in the top 10 list of Medicare providers.” Everyone loves to know what the nationals are up to and this list is one way to find out. Lincare, Apria Healthcare and American HomePatient are all here, but not Rotech Healthcare. Of the providers on the list this year compared to last year, Apria saw the biggest drop in allowed charges ($304 million in 2013 and $247 million in 2014), and Zoll Services (defibrillators, catheters and vents) was the biggest mover (No. 11 in 2013 and No. 6 in 2014).

Close second: “CMS’s bull’s eye on vents.”

From Managing Editor Theresa: “57 channels and a CPAP machine.” Is the humble CPAP becoming mainstream? Yes, Theresa argues in this blog mixing HME and popular culture, like only she can do.

From Associate Editor Tracy Orzel: “Could a loner be an HME provider?” Tracy, who enjoys her alone time (this must be why she disappears from her desk every day for half an hour), explores whether the majority of HME providers are introverts or extroverts.

UPDATE: As it turns out, that blog from Tracy isn't from Tracy, but from her predecessor's predecessor (Thank you HME News website and Google Analytics). The most read blog actually written by Tracy is "Breaking: Quantum Rehab reveals newest hire." In this blog, she writes about the dog that stole the spotlight in Pride Mobility's booth at Medtrade this year.

by: Liz Beaulieu - Friday, November 20, 2015

Theresa just emailed me, “We are certainly going to have fresh stuff for the next Moneyline.”

Moneyline is an email blast we send out each month with the most “business-y” stories from the past 30 days. “Business-y” is our formal term for stories that deal with mergers and acquisitions, financial results, etc.

In case you’re not keeping track like us, there have been a number of M&A stories this week.

OptumRx, the pharmacy services business owned by Optum, has acquired AxelaCare, a provider of home infusion services.

C.R. Bard, a manufacturer of medical devices for vascular, urology, oncology and surgical special fields, has acquired Liberator Medical, a provider of home medical supplies, including catheters, ostomy, diabetes and mastectomy.

Last week, ResMed acquired Maribo Medical, a distributor of sleep-disordered breathing medical devices and accessories in Denmark; and Integrated Home Care Investors and its leader Jorge Pereda, the former CEO of All-Med Services of Florida, bought the assets of Univita Health.

In a move that’s a little outside our scope, but also of interest, McKesson Ventures, the venture capital arm of McKesson, announced recently that it has provided funding to ClearCare, a homecare tech startup that provides paperless care management software. It’s the first time McKesson Ventures has directly invested in home care.

Apparently, I’m all about themes lately, because in a number of these stories, I couldn’t help but notice that they’re about outside players “buying” their way into the home. OptumRx with AxelaCare, C.R. Bard with Liberator Medical.

Say what you will about what could be concerning dynamics in some of these cases (a manufacturer buying a provider?), it speaks volumes about where the movers and shakers see more care taking place in the future—in the home.

I also spoke with healthcare attorney Elizabeth Hogue this week for a story about Medicare’s proposed changes to the discharge planning process at hospitals. The changes include regular re-evaluation of the patient’s conditions.

“What CMS wants is a collaboration between acute and post-acute care, not a one-time referral,” she said. “The only way they’re going to be able to do this is with really right relationships with all types of homecare providers.”

by: Liz Beaulieu - Friday, November 13, 2015

There was an interesting theme in recent conference calls by Invacare and Inogen to discuss financial results: a new focus on sales.

Due to a consent decree with the U.S. Food and Drug Administration that has limited Invacare’s ability to manufacture and sell products for close to four years now, sales haven’t been a big focus. The big focus: lifting the decree.

Enter Matt Monaghan, who took over the company in April. Since then, sales have been a big focus of the past two conference calls. Invacare hasn’t shared much in the way of specifics, but it has shared that it’s investing in sales (and new product development) and in training its sales team to be “specialists” vs. “generalists,” especial for complex rehab products.

Efforts to lift the consent decree are still humming away in the background, of course, but as Lara Mahoney, director of investor relations and corporate communications, told me recently, “We’re not waiting (until the decree is lifted). We’re making investments today.”

That’s a change of tune, and a good one.

Unfortunately, this change of tune has meant Invacare has had to adjust its workforce in other areas, but without a top gun sales team—consent decree or no consent decree—there is no company.

Inogen, which isn’t tangled in a consent decree but which is about to get hit with a reimbursement cut next year when CMS rolls out competitive bidding nationwide, also has a new focus on sales. Again, the company hasn’t shared much in the way of specifics, but it shared in this week's conference call (See the HME Newswire on Monday) that it hired sales reps in the third quarter.

CEO Ray Huggenberger said that the company wanted to make the investment in sales when times are good, to set the company up for 2016, when times won’t be bad but not as good. The reimbursement cut will hit the company’s rentals business, so the new focus on sales will help to shore up its direct-to-consumer business.

The lesson here: Invest in sales when times are bad; invest in sales when times are good. Plain and simple, always invest in sales.

by: Liz Beaulieu - Wednesday, October 28, 2015

I don’t know if you’ve had time to devour Show Daily 2 and I know you haven’t seen Show Daily 3 yet (we’re working on it right now in a secret room off one of the show entrances), so I thought I might share with you some gems from the issues.

You’re not alone

This year more than ever I realized that, while Medtrade has some excellent education, a lot of what attendees crave from the event is the opportunity to talk to each other.

When I hounded Jerri McLamb for our Question of the Day on Tuesday, she said, “To be in an audit class and to hear that other providers are going through the same thing is huge.”

Tara Ellington told Managing Editor Theresa Flaherty about competitive bidding coming to rural areas in 2016, “It’s super important for us to talk to people who have been dealing with it and gaining insight from that.”

Power of patients

We’ve heard time and time again of the importance of involving patients in the industry’s advocacy efforts. But what about their every day businesses?

A physician who was on a panel talking about the difficultly of getting documentation for power mobility devices said, “I would encourage you to give the (documentation) back to the patient or caregiver and say, ‘Take this to your doctor.’ When the patient starts complaining, that gets our attention.”

Eminently quotable

And here are just a few of my favorite quotes from the issues:

“It looks good, feels good, feels different. People seem less cautious and more optimistic. They are dealing with this bidding thing and figuring it out,” Kevin Gaffney, Medtrade

“Even if your business is doing well, it could be doing better,” Miriam Lieber, Lieber Consulting

“No one is going to make the RACs go away. What you can do is make it go away for your company,” Wayne van Halem, van Halem Group

“You need to know what a product is, what it does and what that means. Disease management is not just about the product anymore,” Cheryl Needham, Philips Respironics

by: Liz Beaulieu - Wednesday, October 21, 2015

The last time I saw Van Miller was at the AAHomecare Washington Legislative Conference in May.

It was the first day of the event and things didn’t really get started until noon, but there was Miller in the lobby with CFO Mike Mallaro doing what he did best, working the crowd, shaking hands and patting backs, and even offering this reporter and another attendee water.

It turned out that, although the official legislative visits didn’t start until the next day, Miller and the rest of the crew from VGM had already been to the Hill and back that morning.

I’ll be honest: I’ve never said much more than, “Hello, how are you,” to Miller in my nearly 10 years at HME News.

But I have seen him at plenty of Legislative Conferences and Medtrades and Heartland Conferences, and to be at these events is to know Miller in an important way.

At these events and others, Miller defined the phrase, work hard, play hard.

On how he worked hard, see above.

On how he played hard—a Medtrade wouldn’t be a Medtrade without a themed party hosted by VGM, and a Heartland Conference wouldn’t be a Heartland Conference without a pig roast and fireworks.

Miller was a man who had our collective backs and showed us a good time to boot.

I suspect next week will be the HME industry’s first Medtrade without Miller in a long, long time. He won’t be there physically, but he will be there in spirit, and we owe it to ourselves to do what he always did, work hard but play a little while we’re at it.

by: Liz Beaulieu - Tuesday, October 13, 2015

I talked about technology with the head of a large visiting nurse organization last week.

By large, I mean 2,000 employees and a $175 million budget.

When I asked this exec about how he’s looking to technology to improve care and reduce costs, he called the organization “serial piloters.”

What they’ve been doing is testing out a handful of telehealth, remote patient monitoring and self-care technologies to determine their strengths and weaknesses for their particular business. The conclusion: “We’ve gained a fair amount of confidence that there’s real opportunity to provide better care at lower cost with the thoughtful use of technology.”

The organization is now developing a strategic plan on how to integrate certain technologies into their usual care in the near future.

And, oh, how to pay for them.

One of the more interesting things about my conversation with this exec was that he acknowledged that Medicare reimbursement for most of these technologies is a false hope. The last thing Medicare wants to do, he says, is set up new codes and new fee schedules when it’s trying to move forward with value-based reimbursement.

The exec says some of these technologies will have to be considered operational expenses—much like the hardware and software that helps you run your business. “They’re tools that we purchase because they help us succeed.”

But he’s also exploring two other avenues to help pay for them: fundraising (as a nonprofit, the organization has received pledges of support) and self-pay (“There will also be an opportunity for more of a retail play where we charge families for certain technology based services,” he said).

I hope you find this conversation as enlightening as I did. In a market, like HME, that has so long relied on Medicare reimbursement for its livelihood and a market that has failed to embrace new technologies because of the lack of reimbursement associated with it, this is the stark truth.

You implement technologies because they help you succeed. You don’t do it because Medicare will pay you for it.

You also get creative to pay for them.

“There’s no fairy dust,” the exec said. “It’s hard work.”

by: Liz Beaulieu - Wednesday, September 23, 2015

There was significant shuffling in the bottom half of the top 10 list of Medicare providers for 2014.

The top half, No. 1 to No. 5, was rock solid, with Lincare, Accredo Health Group, Apria Healthcare, Lincare Pharmacy Services and Walgreens holding steady.

Two of these providers, Accredo Health Group (specialty pharmacy) and Lincare Pharmacy Services, saw an increase in allowed charges from 2013 to 2014.

Accredo Health: $416 million to $472 million

Lincare Pharmacy Services: $226 million to $237 million

Of the three other providers in the top half, Apria Healthcare saw the biggest drop in allowed charges, from about $304 million in 2013 to $247 million in 2014.

The bottom half of the top 10, as I said, is another story.

Zoll Services (defibrillators, catheters and vents) was the biggest mover, rising from No. 11 in 2013 to No. 6 in 2014 with about $142 million in allowed charges. The other providers moving in a positive direction: Hanger Prosthetics from No. 10 to No. 9 and Coram Alternate Site Services (bought by CVS from Apria Healthcare in 2013) from No. 13 to No. 10.

Rounding out the top 10 were KCI USA, which moved from No. 6 to No. 7, and Arriva Medical (diabetes supplies), which moved from No. 7 to No. 8.

Part of the top 10 last year but not this year: Liberty Medical Supply, which was No. 9 in 2013.

See this data and more in our 2015 State of the Industry Report published in December.