The Big Picture – health care industry
To say that the bariatrics segment of the home medical equipment market has become a big deal is not to be flippant. Indeed, it’s serious business to manufacturers, some of whom project a market growth rate of at least 10 percent over the next few years.
“I would say growth percentage-wise will be in the double digits,” says Christy Shimono, a product manager at Sunrise Medical. “Bariatrics is probably one of the biggest growing … markets, and all of the different analyses I’ve seen generally concur that bariatrics is indeed one of the fastest growing.”
Manufacturers point to several factors that will spark such growth, not the least of which is the fact that Americans are gaining weight. According to the Englewood, Colo.-based American Society of Bariatric Physicians, the prevalence of obesity increased from 12 percent of the U.S. population in 1991 to 17.9 percent in 1998 (see sidebar).
“People have become more sedentary,” says Doug Callant, director of national sales at Plexus Medical. “There are more electronic devices like computers and TV. And people don’t get out as much as they used to because of this sedentary lifestyle.” In addition, he says, people are eating less healthy foods.
At the same time, manufacturers believe that greater interest in bariatrics among patients and the medical community should also add to the market’s growth potential. Through various mediums, particularly the Internet, bariatric patients have become more aware of how certain products and equipment can help them with their conditions, manufacturers say. In addition, more physicians have begun to recognize obesity as a serious ailment that needs to be properly diagnosed and treated.
“I don’t think the patient population all of a sudden just exploded,” says Steve Cotter, vice president at Gendron. “The patient population has always existed. But that population is getting much more attention. It’s more widely recognized that treating that patient now for various conditions related to obesity is more effective than when that patient is admitted to the emergency room and in any degree of failure. So it’s that kind of a shift that we’re seeing, and that’s why attention is being focused on this kind of a patient.”
Bariatrics Fact Sheet and Risk Factors
97 million adults in the U.S., or 55 percent, are overweight or obese, with at least 33 percent (58 million) of adults considered overweight and 22 percent (39 million) considered obese.
Approximately one in five children in the U.S. between the ages of 6 and 17 is overweight. The number of overweight children in the U.S. has more than doubled in the past 30 years.
Obesity-related medical conditions contribute to 300,000 deaths each year, second only to smoking as a cause of preventable death.
The total cost attributable to obesity amounted to $99.2 billion in 1995. Approximately $51.65 billion of those dollars were direct medical costs.
Source: The American Society of Bariatric Physicians For more information, access the ASBP’s Web site at www.asbp.org.
Easier Said Than Done
MANUFACTURERS GENERALLY agree that competition has increased in the bariatrics market, but some are concerned about the possible detrimental effects.
“A lot of the competitors we see coming into the marketplace simply fine tune an existing product, stretch a wheelchair a little bit, increase weight capacity, and say, ‘I’ve got a bariatric wheelchair,'” says Steve Cotter, vice president at Gendron. “But we know from not only a construction, durability and safety standpoint, but also an ergonomic, positioning and patient standpoint, this isn’t good enough.
“There are unique construction characteristics and unique ways of building the product to accommodate that patient,” he continues. “These new players don’t have the expertise and the background, yet they’re stretching the product and saying, ‘OK, we have one too.’ And it’s not really well suited for the patient. So short-term, this creates a competitive situation for us. Long-term, our providers end up coming back to us because there are a few of us who are recognized as a leader or an authority in the market.”
A Formidable Prospect
REIMBURSEMENT IS not the only challenge in the bariatrics market. Not only is the product volume lower, but also the product selection and options in bariatrics are limited – and that has caused some HME providers to stay clear of this market, manufacturers say.
“Because the allowables really aren’t that enticing, I believe a lot of the providers are reluctant to jump into servicing this market,” says Gregg Garland, president of AirCare Therapy. “In addition, there are quite a bit of setup costs. For example, you’ve got to have the proper delivery trucks. It’s a whole different animal delivering these oversized bed frames and dealing with these larger patients. So I firmly believe that quite a few of the providers are reluctant to get into this marketplace because of the fact that it’s somewhat cost prohibitive for them.”
Despite these challenges, however, other manufacturers feel that the bariatrics market is a promising one that has strong growth potential and could generate strong revenue for providers.
“A dealer would be well advised to pay attention to the bariatrics market because patients are not just buying one product for their needs,” says Len Feldman, owner of Big Boyz Industries. “Usually, a bariatrics patient, once they’re at the level of 500 pounds or more, is in need of a great deal of equipment just to function. Once a dealer starts servicing one need, and the patient is happy with them, the requests come in for additional needs, such as wheelchairs, commodes, walkers, beds, respiratory care, diabetes, skin care. For a dealer, one bariatrics patient can be worth three or four other patients.”
Experts Interviewed: Steve Allee, director of marketing, Burke Inc., Kansas City, Kan.; Doug Callant, director of national sales, Plexus Medical, San Dimas, Calif.; Steve Cotter, vice president, Gendron, Archbold, Ohio; Len Feldman, owner, Big Boyz Industries, Ivyland, Pa.; Tom Finch, Sr., president and chief executive officer, Teftec Corp., San Antonio; Gregg Garland, president, AirCare Therapy, St. Louis; and Christy Shimono, product manager, Sunrise Medical, Carlsbad, Calif.
To follow up with these companies, check out the complete listing in HomeCare’s annual Buyers’ Guide.
A Little Help, Please
DOES MEDICARE NEED to re-examine its reimbursement for bariatrics items? Some makers of bariatrics products says yes. While Medicare does have a separate category for bariatrics products, it is a short list that covers only a limited selection of common equipment such as wheelchairs, they say. For other bariatrics products, an HME provider has no choice but to claim them as if they were standard devices. But bariatrics products are more expensive than their standard counterparts, meaning that the level of reimbursement is much lower, manufacturers note.
“If Medicare does recognize the fact that there are greater expenses involved in dealing with this market and that it is definitely a market that needs attention, I have a feeling that it’s going to be an all or nothing thing,” says Gregg Garland, president of AirCare Therapy. “If they do decide that certain products need to be reimbursed at a different level, then I have a feeling that they’re going to take a hard look at all of the equipment that is available for the bariatrics market. Maybe it’s wishful thinking, but I really truly believe it’s going to be a situation that if they’re going to acknowledge one particular product line, they really need to acknowledge all of them.”
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