Healthcents makes sense of managed care

SALINAS, Calif. - Healthcents has watched as HME companies—not only providers, but also distributors and manufacturers— have become 60% to 70% of its customer base, replacing the medical practices that were the bulk of its business 10 years ago. “We're seeing acceleration in the DME space because these companies are looking to expand their revenues by contracting with health insurance companies, whether it's in the form of GPOs, formularies or PMBs,” says Steve Selbst, CEO of Healthcents, a consulting company that offers managed care contracting, consulting, education, research and software. Here's what Selbst had to say about the misperceptions that sometimes keep HME companies from taking advantage of this growing market.

HME News: HME companies often think that managed care contracts are closed and non-negotiable.

Steve Selbst: That's more than a perception. That's accurate more often than not. That's one of the reasons why we work with companies to break down the obstacles that keep them shut out.

HME: What can HME companies do? And how can you help?

Selbst: There are a number of tactics that can be deployed.  One tactic is looking very carefully at any unique products or services that a company is offering that might not be offered by other companies in the contract and that could be advantageous to the health insurance company. Another is looking at whether or not a company covers a geographic area that fills a gap for the health insurance company.

HME: What's an example of a unique product or service offered by an HME company?

Selbst: Let's say it's something that helps the health insurance company save money on inpatient stay days for patients awaiting heart surgery, or it's something that has the potential to reduce the need for surgeries in diabetic patients. There's a lot of innovation that DME companies can bring to bear.

HME: What about an HME company's ability to negotiate reimbursement with payers? There's this perception that reimbursement is set and if a company is offered a contract, it's take it or leave it.

Selbst: It's not one size fits all, but generally, there is the ability to negotiate. It's all about, what's the value proposition? Are you just selling wheelchairs, hospital beds and breast pumps, or is there a cost benefit to what you're offering?

HME: What value propositions are attractive to health insurance companies?

Selbst: Your patients are 10%, 20%, 30% more compliant with their therapy than the competition's patients. You can equate that compliance with a certain amount of money that the health insurance company will save or benefit from. It could be a monitoring device that keeps patients in their homes, not the hospital.