Provider Purchasing Plans Survey
Results of our exclusive survey point to cautious optimism among providers regarding their 2010 spending decisions.
The results are in! Several weeks ago, we polled
respiratory HME providers and therapists to
learn their plans for purchasing respiratory
products in 2010. Their feedback indicates that
despite the current and potential financial
damage wrought by the economic recession and
reimbursement policies in 2009, they are still
willing to invest in new products and technology—if they’re convinced it’s worth it.
Of the 100 survey participants, nearly half
were single-location HME providers, 21 percent
were HME provider chains, 12 percent were
sleep labs and 10 percent were hospitals with
HME. The majority of survey respondents were
company owners, directors and managers, and
21 percent were respiratory therapists.
Measured Risk
Questions about the preparation
and decision-making phases of
product purchases revealed a
cautious enthusiasm when it
comes to making the leap to buy.
Most respondents go directly to
manufacturers for product information
and rarely rely on the wordof
mouth of other providers and
therapists on what products to
purchase.
Respondents recognize the
significance of new technology in
respiratory homecare products, and
take it into account when deciding
whether or not to purchase a
product. Most indicated that they
were willing to invest in technology
if the risk wasn’t too great.
| Which statement most closely reflects your approach to new equipment technology? |
| This is a competitive field so if my budget allows, I try to get a jump on purchasing new technololgy. |
30.3% |
| I like to wait a few years until a type of technology has fully evolved before I purchase it. |
12.1% |
| I think it's important to research all new technology, but I rarely purchase equipment for technological reasons alone. |
38.4% |
| I'm primarily interested in equipment technology that has favorable Medicare funding. |
12.1% |
| I'm happy with my current equipment, and only pay attention to new technology when it has been called to my attention by my peers. |
7.1% |
Tempering the results above, however,
were the top chosen considerations respondents
make before making a product
purchase decision. “Reliability” was cited
first by nearly 87 percent of respondents,
with “durability” a close second. “Price” came
in third, “ease of use” fourth, and “manufacturer
reputation” came in fifth.
| Rate the factors you consider before making a product purchase decision. |
| |
Very Important |
| Price |
69.4% (68) |
| Ease of use |
61.9% (60) |
| Years on the market |
10.6% (10) |
| Training/education provided |
36.6% (34) |
| Durability |
77.3% (78) |
| Reliability |
86.5% (83) |
| Colleagues' word-of-mouth |
3.2% (3) |
| Product studies |
12.6% (12) |
| Availability of demos and samples |
33.0% (31) |
| Level of Innovation |
17.4% (16) |
| Manufacturer reputation |
41.5% (39) |
| Purchase contract terms |
35.5% (33) |
Ability to Spend
Providers’ and therapists’ spending ability continues to rely heavily on Medicare and Medicaid
payments, according to survey results. 76 percent of the respondents said they rely on these
sources for at least about half of their income, and 24 percent count on Medicare/Medicaid for
about one-third or more of their income, with 8 percent of that group falling into the 76% or
higher level of reliance. Only 14 percent attributed 15 percent or less of their business
payments to Medicare/Medicaid.
This reliance was further illustrated when respondents were asked to identify the one
factor they thought would most affect their purchasing decisions in 2010, with more than 44
percent pinning their plans on Medicare/Medicaid reimbursement policy.
| Which one factor do you think will most affect your purchasing decisions in 2010? |
| National health care reform |
11.8% |
| Medicare/Medicaid reimbursement policy |
44.1% |
| Product technology |
2.2% |
| The state of the economy |
16.1% |
| Patient needs |
22.6% |
| Other |
3.2% |
Reimbursement cutbacks and
rising overhead compelled
many providers to work and
rework their budgets for 2010.
When asked to rate the areas of
their businesses in which
they’ll invest this year, “staff”
came in first and “products/equipment” second in the No. 1
ranking spot, at nearly 30
percent and 25 percent, respectively.
(“Operational expenses”
and “marketing/advertising”
were third and fourth, respectively,
followed by “facility.”)
In another show of cautious optimism, 33
percent of respondents said that they plan to spend
a little more on products in 2010 than they did in
2009, though only 5 percent plan to spend a lot
more on products this year. More than half of
respondents are either taking a “wait and see”
approach to purchasing, or projected that their
purchasing level would stay the same as last year’s.
Overall, the products category maintains a
modest presence in survey respondents’ budgets.
| What percentage of your 2010 budget is currently slated for new products and/or equipment? |
| 0% - 10% |
28.0% |
| 11% - 20% |
49.0% |
| 21% - 30% |
14.0% |
| 31% - 40% |
5.0% |
| 41% - 50% |
3.0% |
| More than 50% |
1.0% |
Product/Service
Categories
Finally, we asked respondents
to talk about the
specific product areas in
which they plan to expand
or cut back. On cutting
back, no one product category
claimed more than 8
percent of responders and
more than half said there
is no product category on
which they plan to cut
back. However, on the
expansion side, product
category preferences
became apparent. Survey
participants are setting
their sights on the sleep
category, with 73 percent
saying they were planning
to expand on CPAP/Bilevel/AutoPAP equipment
and half indicating expansion
plans for sleep
therapy masks/accessories.
| Which product/service categories are you most likely to expand upon in 2010? (Check as many as apply.) |
| Business Software |
25.0% |
| CPAP/Bi-level/AutoPAP |
73.0% |
| CPS/Fleet Management |
7.0% |
| Nebulizers |
25.0% |
| Oxygen Concentrators |
49.0% |
| Oxygen Filling Systems |
22.0% |
| Oxygen Testing & Monitoring (oximetry) |
18.0% |
| Pediatrics |
10.0% |
| Portable Oxygen |
33.0% |
| Retail Items |
34.0% |
| Sleep Screening and Testing |
16.0% |
| Sleep Therapy Masks/Accessories |
50.0% |
| Ventilators |
7.0% |
| None |
2.0% |
| Other |
5.0% |
This article originally appeared in the Respiratory & Sleep Management March 2010 issue of HME Business.