MANAGED CARE May 2005. ©MediMedia USA
Those with an entrepreneurial flair have taken aim at a problem that seems to have sneaked up on health plans: the cost of durable medical equipment. Just which patients should get motorized wheelchairs? How much can DME cost? Who knows what is a reasonable price for hospital beds, prosthetics, orthotics, incontinence products, and diabetes management equipment?
Terry Coplin, the CEO of a company called Apropo Benefits Management, bets that many health plans don't know the answers.
"The DME market is ruled by a lot of small vendors and the health plans, since they don't have much information about the cost of the products, are pretty much at the mercy of the vendors in terms of contracting," claims Coplin.
For years, this problem was shoved to the back burner. Now, however, DME costs are expected to climb significantly, he says.
"If you look at the product projections for the DME manufacturers, they are bullish on what they're going to look like in the next five years," says Coplin. "What's a new market for one person is a new cost for another. This is an incredibly inefficient market."
For instance: "A patient goes to a physician," he says. "The physician orders a motorized wheelchair for the patient. The patient then goes to see the physical therapist who defines in greater detail what the patient needs and adds things to the wheelchair and sets different criteria.
"Then they go to the vendor who decides that the patient, of course, needs a cushion. Maybe eight different cushions. The costs for the cushions range anywhere from $50 to $2,000.
"All of a sudden it's two people away from the physician and the vendor is now working directly with the patient to decide which cushion they like best."
Keep in mind that though the health plan is paying, all of the pertinent decisions are being made by other parties.
"As I said, this is an incredibly inefficient market," says Coplin. Entrepreneurs like him aim to change that.