By Joan Trombetti

This article is from in the September 2007 issue of DOTmed Business News. A list of registered users that provide sales & service can be found at the end.

The market for respiratory equipment sales and service - both in hospitals and home healthcare settings - is huge and has been one of the strongest areas for overall growth in healthcare equipment for several years. In fact, a study entitled the "World Market for Respiratory Equipment" released by Kalorama Information in January 2006, says the stage is set for the global market for disposable and reusable respiratory equipment to reach $21 billion by 2010.

The report finds that respiratory disease is among the most common ailments in the world with asthma and chronic obstructive pulmonary disease (COPD) being the major causes of deaths among children and the elderly. The study found that there are approximately 300 million people who suffer from asthma, with that number expected to rise, and 14.2 million people suffering from COPD. The report analyzed the worldwide market for respiratory disposable and reusable equipment including inhalers, nebulizers, resuscitator masks, ventilators, portable ventilators, respirators, oxygen systems, humidifiers, pulse oximetry sensors and more.

The factors that contribute to this boom in respiratory equipment include an ever-increasing aging population, chronic pulmonary diseases due to pollution, smoking and other causes and the need to replace older equipment. On the flipside, there is the pressure from increasing budget cuts and reimbursement reductions chipping away at respiratory equipment procurement plans - giving hospitals and homecare service providers that buy and use respiratory equipment major headaches.







There is a broad range of respiratory equipment available on the market today used to treat all types of respiratory therapy patients. Spencer Sommers is a respiratory therapist, as well as a biomedical technician. His company, Covalent Technologies in Comstock Park, MI, carries a full range of respiratory equipment including oxygen concentrators, liquid oxygen systems, CPAP, BIPAP and pulse oximeter. The company offers repair maintenance, reconditioning and sales. The most common types of equipment Sommers sells are portable and battery operated oxygen concentrators and laptop sized ventilators. "This is due to a larger number of younger and more mobile chronic respiratory patients, including infants who previously could not be discharged from institutions to home," says Sommers.

The CHAMP Act may be a loser for the respiratory industry

Sommers was asked about the new Children's Health and Medicare Protection Act of 2007 (CHAMP Act). The bill, which passed by a vote of 225 to 204 in early August of this year, commits $50 billion to reauthorize and improve the Children's Health Insurance Program (CHIP) and makes critical investments in Medicare to protect the health of senior citizens.

But according to the American Association for Homecare (AAHomecare), the House and Senate have passed versions of this bill that include Medicare with provisions that reduce the cap period for oxygen from 36 to 18 months, but retain the 36-month rental period for oxygen generating portable equipment. The Senate measure does not include Medicare issues. The bill includes a provision that reduces the time Medicare will pay for rental oxygen equipment by almost two thirds - from 36 months to 13 months. AAHomecare is strongly opposed to several provisions of the Administration's proposed 2008 budget that would weaken access to homecare for millions of Americans.






"It's total insanity," Sommer exclaimed. "Oxygen cuts must be omitted from this bill. Not only does it put an unrealistic timeline on lifesaving equipment, it also puts the burden of respiratory home equipment repair on the patient or family, because after the 13- month rental allowance, the equipment would have to be purchased." This is sure to cause a moral and ethical dilemma in Sommer's opinion. He went on to say that most people have little if any understanding of what it takes to maintain oxygen. "There is some talk of the government allowing for a provision to let homecare companies provide the maintenance for the equipment. However, the amount of reimbursement will be a crucial determinant as to whether or not it will be worth the time and effort," explained Sommer.

Mike Wooten, president of Pitcock Biomedical Inc., in Manchester, TN, added his thoughts to the debate, "Unfortunately, a few lives will probably be lost before the mess is straightened out. If people with home ventilators and respirators don't have the ability or know-how to recognize a problem - or if the equipment is inferior because it was not purchased from a reputable company - you are talking about a potentially deadly situation." Wooten went on to say that his company no longer sells many refurbished concentrators because, "it's cheaper to buy a new one." He goes on, "It may be new, but is it a quality piece of equipment?" Wooten has been in business for fifteen years and works with Invacare and Respironics. He has faith, however, that even with reimbursement cuts for home respiratory equipment products and, "everything else that is going on, because of our company's record of providing quality repairs at a fair price, our business will continue to grow and remain a driving force in the respiratory equipment market - I'm confident," says Wooten.

Not too big to care about smaller customers

Michael Callaghan, president of ISIS Medical Solutions, LCC of Atco, NJ, has years of experience in the medical industry. His company specializes in infusion and sequential compression devices, as well as respiratory equipment. But when it comes to respiratory equipment and the trends in the market today, Callaghan is careful about what he sells, because he feels that there is a definite level of risk and liability for anyone in the business. And he also bring a personal touch to what he does. "We are a group of family and friends, because you help those who have helped you in life - it's a bond that should not be neglected or forgotten," says Callaghan. "For example, say a man passes away who had been home for several months on a respirator. Because that made had a back-up respirator, which is required, the man's wife now has two respirators that she has no idea what to do with. I will ask her what she paid for the respirators, and if I can offer her a reasonable price that she is happy with, I will buy them from her," says Callaghan. "But if I don't feel I can accommodate her, I will refer her to a larger company that is more equipped to deal specifically with used and refurbished respirators." Callaghan believes that, "in this business, if everyone was willing to give referrals, many problems would be eliminated." For instance, Callaghan may refer a customer to Tim Schehl, Service Manager at Bemes, Inc., in Fenton, MI.




Breathing fresh life into used equipment is what ISOs do

Bemes, Inc. deals in sales, service and rentals of respiratory equipment, and is a leader in the respiratory medical equipment business. "From my end, as a service manager, the respiratory equipment business is all good," says Schehl. "We specialize in buying and selling used and refurbished ventilators - accessories and parts, and all of our equipment is advertised on DOTmed - which we consider to be a "big player" in promoting our business. Many of our customers are international. Hospitals in many foreign countries can't afford the latest, state-of-the-art ventilators, so they go to companies like Bemes, which will sell them totally refurbished equipment that perfectly serves the needs of the hospital or any other medical facility." Schehl explains that a brand new ventilator may cost $25,000. "A teaching hospital - say, in New York City - may keep this ventilator for a couple of years, and then replace it with more modern technology. The ventilator is still totally functional, and can be bought from the hospital by us, and sold at a greatly reduced price to smaller hospitals in the United States or overseas."

Callaghan also refers customers to General Biomedical Services, Inc. in Kenner, LA. Anna Ortega, Sales and Marketing Manager, says that unlike some companies that sell "as is," all General Biomedical's respiratory equipment - ventilators and anesthesia machines - undergoes both operational as well as cosmetic restoration. "Our pieces are disassembled, components are replaced or repaired and circuit boards are tested and calibrated before the equipment is rebuilt according to the manufacturer's specifications," says Ortega. "We also outfit pieces with our standard accessories and each system and function is tested in our laboratories over a 72 hour period before it is shipped to any client. General Biomedical equipment arrives with an operational verification procedure checklist (OVP), a guarantee of satisfaction and a 90-day warranty."
David Ogren, president of OMED of Nevada, Reno, NV, a distributor of surplus medical electronic equipment, has been serving retail, wholesale and end user customers for over 40 years. His company purchases truckloads of medical equipment from hospitals and other facilities, and much of the time it includes respiratory apparatus. OMED of Nevada will also find equipment for hospitals, surgery centers, homecare facilities or for other refurbishers. "Before any respiratory equipment is placed in inventory, it is cleaned, inspected for operational condition and classified in one of the following stages: "Patent Ready," "As Is," or "As Is Working Complete, No Broken Parts," says Ogren. "A patient ready piece of equipment (like a PLV102 portable volume ventilator by Respironics) is complete with a PM safety sticker, meeting all current manufacturer performance standards."

Ogren explained that the market for selling any previously owned equipment, like ventilators and respirators, could be outlined on a bell curve. "The more technologically advanced the hospital, the more state-of-the-art the equipment is," says Ogren. While that may sound redundant, "technologically advanced" also relates to the type of training the medical staff has received. This training and the related technical equipment are also subject to available capital equipment budgets.




"When equipment is replaced in a couple of years by new upgrades, along comes OMED of Nevada to purchase the items and then perhaps sell them to a community hospital," says Ogren. "That hospital will next pass them on to a clinic, outpatient boutique or a privately owned hospital, then on to an international hospital with an emerging health care program not as sophisticated as the 'top guns' in the U.S." According to Ogren, the older the equipment, the farther down the chain it goes. "We even sell ventilators to veterinarians and other biomed equipment that has been refurbished," says Ogren. "The market for us is wide open, and business is good."

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DOTmed Registered Respiratory Equipment Sales & Service Companies

Domestic
Jorge Fernandez, ABC MED, Inc., FL
Noel Estrada, Advantage Medical Systems, NY
Anthony Burgos, Bemes, Inc., NJ
Rod Robinson, Biomedical Professionals, OK
Mark Clark, Commercial/Medical Electronics, OK
Spencer Sommers RRT, Covalent Technologies, MI
Theresa Holden, Falls Welding Fabrication,OH
Paul Fau, First American Medical Equipment,NJ
Judy Engle, Frontier Medical, Inc.,CO
DOTmed Certified
Ana Ortega, General Biomedical Service, Inc.,LA
Simon Tejada, Independent Biomedical Services,NY
DOTmed Certified
Michael Callaghan, ISIS Medical Solutions, LLC,NJ
DOTmed Certified
Scott Mancini, Martab Medical,NJ
John Gladstein, Med-Electronics,MD
Ben Rosenberg, Med1Online,CO
Stephen Hiser, Midwest Biomedical Resources,IN
Dominick McCann, Mobile Medical Maintenance,MI
David Ogren, OMED of Nevada,NV
Mark Wooten, Pitcock Biomedical, Inc.,TN
Don Reiter, SRC Medical,CA
Jeff Weisman RRT, Weisman Medical Enterprises,IN
DOTmed Certified/100
Rajagopal Geethu, Zigma Medical Technologies,TX

International
Zakir Shaikh, Al-Med Equipments, India
Dave Leng, HEAL, Western Samoa
Ronaldo Ragojo, Inmed, Philippines
Cesar Raul Cuervo, Medica Y Computadores, Columbia
Argie Valenzuela, Mideast Medical Equipment, Philippines
Alex Miguens, QRS Electronics, Argentina
Tereza Moreira, Tecnolife Equipamentos Medicos, Brazil

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