Non-delivery delivers results

The cornerstone of Home Oxygen Company is its non-delivery model, says co-founder Todd Usher. The Modesto, Calif.-based provider started out as an oxygen provider in 2007 and has grown to include a full line of home medical equipment and supplies.

While he says business is challenging in the face of reimbursement cuts—three of his local competitors have closed or are about to close thanks to the roll out of bid pricing in rural areas—his business model helps him hang in there.

“We don't get paid for delivering walkers,” said Usher. “They took our service money. Medicare is satisfied with that. As long as we can prove they got it, prove we gave the education, and prove the signatures are there, then we are golden.”

Usher spoke with HME News recently about why he wishes all providers would embrace the
non-delivery model.

HME News: Are all of your oxygen patients non-delivery?

Todd Usher: Every single patient we have is non-delivery. I don't have drivers delivering tanks; I don't have to track tanks; I don't have shrinkage of tanks. Everyone is on Homefill or a POC. Everyone is self sufficient; it's patient preferred; it saves me a ton of labor; and frankly, (using a delivery model) is the reason why a lot of companies are hurting.

HME: Do you think many companies are hesitant to go the non-delivery route?

Usher: A lot of providers are going to say this a no-go, but that's the problem. This is a real-world solution. Yes, it's expensive upfront, but you've got to start somewhere.

HME: Besides your non-delivery oxygen model, you basically drop-ship all DME. How does that help with your bottom line?

Usher: That's how we are surviving. We use McKesson and Medline and it's integrated with Brightree. We've eliminated two or three levels of the process simply because we are integrated. We don't pack it or anything. We signed up with Independence Medical recently and they've been able to do that for our CPAP soft goods. (We don't have to deal) with stocking inventory or outdated products where they come out with a new mask, and the old one sits on the shelf and collects dust. I don't have to do that anymore. It's on their doorstep in two days. How awesome is that?

HME: Have you always embraced new ways of doing things or was it a scary proposition?

Usher: I love new ideas and risks. It sounds hokey, but the new technologies that are out there allow us to run a more efficient operation. What I am afraid of is what the government is doing to our reimbursement. But, I've got a fighting chance with these technologies.