Trace Medical gets ahead of ‘seismic shift’

WHITMORE LAKE, Mich. – Trace Medical believes its new distribution agreement with Outset Medical well positions its HME providers to add another profitable product category to their portfolios that has the potential to be provided more widely in the home. 

HME providers have made great strides in providing ventilator care and other clinical products and services in the home – and now it’s time for the same to happen to dialysis treatment, says Elliot Campbell. 

“We are very excited about this,” said Campbell, executive vice president and chief commercial officer. “Twenty years ago, when Trace Medical was founded, the majority of ventilator patients were in a facility, but technology has evolved in a way that now allows them to be used in the home. You just need people with the clinical skill set to support that and who is better suited to do that than HME providers. This is ventilators transitioning to the home all over again.” 

As part of the agreement, Trace Medical will rent Outset Medical’s Tablo Hemodialysis System, a fully integrated system cleared by the U.S. Food and Drug Administration to be used across the care continuum and clinical spectrum, to HME providers. 

One of the biggest risks for providers looking to add a new product category is the “capex burden,” Campbell says, and with this agreement, all of that risk has shifted to Trace Medical. 

“We’ll also facilitate the communications with Outset Medical, as it relates to the training, accreditation and marketing components,” he said. “Outset Medical has a commercial team across the country, and they market to nephrologists just like our customers market to pulmonologists. Everything will be in place to ensure the process is seamless.” 

There’s a big potential upside, Campbell says, with about 600,000 patients receiving dialysis per year and an estimated 30% are candidates for home hemodialysis. The average patient receives 3.7 treatments per week and Medicare pays about $275 per treatment, he says. 

“The most exciting reimbursement component for our customers is that commercial payers pay significantly higher than Medicare and, while the majority of patients receiving dialysis right now have Medicare or Medicaid, as more treatments are provided in the home and more people are able to maintain their jobs and their commercial insurance, the payer mix will also change,” he said. 

Campbell believes Trace Medical’s agreement makes tremendous sense for HME providers and the patients they, collectively, serve, but it’s also a passion project for the executive team at the company, which saw the chairman of its board of directors need dialysis treatment and struggle with the time required and inconvenience of traveling to a facility multiple times per week for hours-long treatments. 

“It’s a seismic shift for those providers who want to be (early adopters),” he said. “I think it will be similar to what we saw with the transition from Blockbuster to Netflix.”