O&P

Lives & Limbs – Ancient History

My series of articles inspired by Nicole Ver Kuilen‘s visit continues.

I noticed over Thanksgiving that a lot of TV channels seemed to be embracing “Throwback Thursday” by airing old but awesome episodes of their most popular shows. I’m a few days late to the party, but I thought that this would be a good opportunity to highlight a couple of fascinating figures from our distant past.

The Original “Iron Man”

Iron artificial arm, 1560-1600.

We have evidence of prosthetics being used by the ancient Egyptians, but the first documented example of a prosthesis being worn to restore function to an amputee was a metal arm worn into battle by the Roman General Marcus Sergius Silas, who lost his right arm while fighting in the Second Punic War, which took place from 218 to 201 B.C.E. We don’t know how it came about, but Sergius managed to obtain an immobile prosthetic arm made of iron, which he attached to his residual limb with leather straps. His prosthesis allowed him to wear his shield again, so he returned to active duty, where he served with valor and distinction in many battles.

He was wounded almost thirty times over the course of his career. At the time, the mortality rate for soldiers wounded once in battle was north of 80%. Sergius not only survived, but he quickly returned to the front lines each and every time. His iron limb and incredible durability made him famous, and people eventually gave him the nickname Ferrous, which is Latin for “made of iron.”

Sorry, Tony Stark. Marcus Sergius was the original Iron Man.

Sergius’ reputation for dedicated military service eventually earned him a place in public politics, where he served as a Roman Praetor. He faced a certain amount of adversity while in office because of his amputation, with several of his colleagues attempting to bar him from taking part in public ceremonies because of his perceived “deformity.” Sergius was apparently quite successful in defending himself against his detractors, which probably makes him the world’s first advocate for the rights and dignity of amputees.

The World’s First Prosthetist Was a Barber

#2 - Pare Prosthetics

If you were unfortunate enough to need surgery in Europe during the Middle Ages, you wouldn’t have gone to see a doctor. Doctors at the time considered surgery to be barbaric practice that was beneath the dignity of their profession. If you needed surgery done, your local barber had the sharpest blades and the surest hands in town and was often trained to use them for medicine as well as shaving. Ambroise Paré, a barber who served in the French military during the mid to late 1500s, is widely considered to be a founding father in the fields of surgery and prosthetic care.

Paré is particularly celebrated in prosthetics circles for his ground-breaking work in the field of amputation surgery. He popularized the use of ligatures to repair severed arteries and developed an ointment that promoted healing in wounds, both of which greatly improved the survival rate of veteran amputees. Unfortunately, Paré’s brilliant new treatment methods weren’t enough to save all of his patients. Many of the soldiers that he had worked so hard to save on the battlefield later chose to take their own lives rather than live without their amputated limbs.

Horrified and saddened, Paré decided that it wasn’t enough to simply heal an amputee’s wounds or fill the space left empty by their missing arms and legs. If he truly wanted to save lives, he needed to restore a sense of wholeness and function to his patients. With this in mind, he was the first to take a holistic approach to managing prosthetic care. He also created the first artificial leg with a working knee joint as well as the first artificial hand with articulated fingers. Many of his designs are actually still in use today.

I don’t necessarily recommend that you let your barber perform your next surgery, but I would invite you to recognize and celebrate the achievements of this one barber in particular. As a surgeon, a scientist, and a humanitarian, Ambroise Paré was a cut above the rest.

Lives & Limbs – Athletes

Last week, I announced a series of posts inspired by a visit with Nicole Ver Kuilen. Since Nicole has chosen to use running as the vehicle for her advocacy on behalf of her fellow amputees, I’d like to start with a couple of impressive amputee athletes.

The Blade Runner

#9 - Aimee Magazine Covers

Oscar Pistorius got a lot of attention for being the first amputee to make the transition into the regular Olympics, and that’s probably appropriate. He didn’t run particularly well though, and he stirred up a bit of controversy over his poor sportsmanship. He’s also serving a 13-year prison sentence for killing his girlfriend. Not the most inspiring stuff. Everyone seems to forget that Aimee Mullins was also at the 2012 Olympic Games, and that the Flex-Foot Cheetahs provided to Pistorius by OPGA partner Össur out of Iceland were originally designed for her.

Mullins wasn’t in London to run. She was too busy serving as the Chef de Mission for the United States. That’s the highest honor the U.S. Olympic Committee gives out, and Mullins earned it after a lifetime of barrier-breaking athletic achievement that was accomplished without the use of her legs.

Aimee was born without fibula bones, leading her parents to make the difficult choice to amputate both of her legs below the knee when she was only a year old. Had she kept them, she would have been wheelchair bound for the rest of her life. The amputation allowed her to learn to walk using prosthetics, but Aimee wasn’t satisfied with walking. By the time she got to high school, she’d learned to run. Fast. Mullins participated in high school track and field events while wearing a pair of clunky wooden legs. As she did so, she set records.

Aimee went to college at Georgetown University, where she became the first amputee to compete in standard NCAA Division 1 track and field events. She became a Paralympic phenomenon, setting world records for the 100-meter dash, 200-meter dash, and the long jump while competing at the 1996 games in Atlanta. She was named the USA Track & Field Disabled Woman of the Year in 1997, and her athletic prowess brought her world-wide fame.

Her stunning good looks and competitive spirit were an inspiration to legendary fashion designer Alexander McQueen, who invited Mullins to be the first down the runway at one of his fashion shows in 1999. She’s been challenging our standards of beauty ever since as a model and Hollywood actress, often posing proudly in her running blades.

The Rock Climber Turned Biophysicist

#8 - Hugh Herr (Cropped)

Hugh Herr was born the youngest of five siblings to a Mennonite Family in Lancaster, Pennsylvania. I’ve read that being the lastborn in a family can have a big effect on your personality as you grow up. Being the youngest means that you’re always surrounded by people who are older, bigger, faster, and smarter than you are, which means that you’ve got to try pretty hard to differentiate yourself. Some kids do it by being rebellious. Hugh Herr did it by being amazing. By the time he was eight years old, he’d climbed almost 12,000 feet to the top of Mount Temple in the Canadian Rockies. By the time he was set to graduate high school, he was considered one of the best climbers in the U.S.

In January of 1982, Herr was climbing with a friend in New Hampshire when a blizzard stranded them for three days in temperatures well below freezing. Both men were eventually rescued, but not before they had suffered severe frostbite. Both became amputees, with Herr losing both of his legs below the knee. Herr’s doctors told him that he would never climb again. He proved them wrong in a matter of months, designing and building an ingenious pair of prosthetic legs that allowed him to firmly stand on even the narrowest and most slippery of surfaces.

Herr’s new legs gave him the distinction of being the first professional athlete that could actually perform better at their sport than a non-amputee, and his success at rebuilding himself after his brush with death gave him a new interest in biomechanics. He earned a bachelor’s degree in physics, a master’s in engineering, and finally a Ph.D. from Harvard in biophysics. Armed with his new knowledge, he secured himself a position at MIT, where he serves as the head of their biomechatronics program. His work there has led him to boldly and controversially declare that the end of disability as we know it is close at hand.

Lives & Limbs: A Celebration of Prosthetic Advancement and Amputee Achievement

I recently had the pleasure of being visited in my office by an impressive young woman by the name of Nicole Ver Kuilen. Nicole has been named as the inaugural Health Policy & Advocacy Fellow at the National Association for the Advancement of Orthotics & Prosthetics (NAAOP), having lost her left leg to cancer at the age of ten. As she grew older, Nicole’s desire to be an athlete brought her new challenges. Obtaining a prosthesis that could meet her needs was difficult, as was navigating the financial complexities that often come with seeking prosthetic care in our country.

Nicole found herself asking a lot of questions during her sixteen years as an amputee: Why is prosthetic care so time consuming and expensive?  Why are all but the most basic of prosthetic devices often deemed “cosmetic” or “convenience” items by insurance providers? Why are people who lose their limbs under certain circumstances afforded better access to care than amputees like her who lose limbs to things like cancer? Nicole’s quest for answers led her to take a 1,500 mile jog down the west coast to raise public awareness of the issues facing American amputees. Her journey has been recorded in a documentary called 1,500 Miles, which she has used to take her message to our elected leaders in Washington and demand change.

Nicole’s story, thought leadership, drive, and sprawling list of accomplishments were a great reminder that amputees are often some of the most determined, hard-working, and impressive people around. The history of prosthetic care is packed with fascinating accounts of people like Nicole who overcame tremendous odds to make important and impactful contributions to society. Those contributions were made possible by others who saw the dignity and worth of amputees and developed the technologies and medical procedures necessary for them to live their lives to the fullest.

Inspired by Nicole’s visit, I’ll be presenting a list of people (in no particular order) who have  changed the way we look at amputees and the prosthetic care that they rely on. I’ll introduce you to a couple of people every few days until I make it through my material, so check back often!

 

 

Opportunities in HME

building blocks

CMS’s Office of the Actuary has published their National Health Statistics for 2016 (they always run about a year behind.)  A few interesting statistics in there about HME:

  • The annual growth rate across all HME categories will average about 6% a year for the next several years.
  • Unit growth and demand will result in total HME spend five years from now (2022) being nearly 30% greater than the HME spend in 2017.
  • The increase in HME spend in 2018 over 2017 – in terms of total dollars spent – will be a greater increase than in any year in the past decade.
  • Looking at 5 years ago vs 5 years from now, to gain perspective, shows Medicaid as the payer source that will have grown the most, by a fair margin. Private health insurance grows proportionately as well.  Medicare shrinks in proportion.  Said another way, Medicaid and private health insurance become more important to HME providers than they have been in the past.

Yes, those serving the HME space face many daunting challenges, there isn’t much argument over that.  But we do so in a market that is growing in dollars and growing much faster than almost every other segment of our economy.  Shifting sands are requiring us to change, to do things differently, to re-prioritize and to focus.   But opportunities abound.

 

The Power of NEW

Image of Little Girl with Chalkboard Sign

NEW.  “NEW” is an important element in building a vibrant and lasting HME or O&P business.  Without NEW your business is slowly dying.  If you are interested in building value over the medium or longer term, you must seek to inject an element of NEW in your revenue streams.

Netflix offers us an example of NEW that we can all get our heads around.  Netflix spends an enormous amount of money on developing original programming (NEW).  Most of their content is movies and shows developed by others.  They also have a tremendous library of their own original content, developed in the past.  If they were to stop spending on NEW content today, their expenses in 2017 would go down dramatically and their earnings would rise a commensurate amount.  Their 2018 year would be similar.  Netflix financial results would be much better over the next two years if they stopped spending on NEW.  But by 2019 they would start to experience decline.  The loss of a NEW pipeline in 2017 and 2018 would impact revenue in 2019.  By 2020 Netflix, without the NEW content developed in 2017 and 2018, would experience an accelerating decline.  I doubt they would survive to the end of 2021. They are better off tomorrow without NEW, but over the medium term, they die without NEW.  You’re not all that much different.

NEW usually does not help profitability in the year it happens.  Often not even the next year.  But NEW is the fuel of future revenue.  Fuel of a vibrant enterprise.  Fuel of profits to come.  NEW comes in several forms for HME and O&P.  A new referral source.  A contract with an additional payer.  A facility not previously served.  Selling on-line.  Product and service lines not previously offered.  There are so many possibilities in NEW, from Philip’s non-invasive ventilation to Afflovest to Rifton’s Tram to Incrediwear’s compression sleeves.  The possibilities of NEW in our business are nearly endless.

All revenue sources follow a curve based on the laws of economics.  At their outset, NEW revenues usually have a lower profit contribution than our old favorites.  Entry costs, lower volumes, resistance and failure rates ensure this.  But over time profit contribution grows.  At the same time, OLD revenues, which tend to be your highest profit contributors, usually settle into a pattern of slow and steady decline, victims of the steady march of commoditization, aging technology and loss of energy.   Don’t abandon OLD.  OLD is your friend and will be almost all of your profit this year.   But you need to invest in NEW this year so that in 2019 and 2020 your business remains vibrant.  I challenge you to make NEW revenues 5% or more of your 2017 revenues.  If you do this every year, you’ll have the right mix of high-profit OLD and high-future-profit NEW to sustain your success.

 

Washington DC HME and O&P

What HME and O&P can expect in Washington in 2017?

We are two weeks away from a Trump administration along with strong Republican majorities in both Houses of Congress. What can we expect in the post-acute healthcare world, including in HME and O&P? Here are my New Year’s prognostications:

  • Obamacare will be largely repealed. I don’t see how the Republicans can do much short of repeal. They’ve preached repeal for the 7 years since Obama signed it into law. Their base has been conditioned to expect it. Many members of Congress are reluctant to repeal given the complexities and potential consequences of repeal. I expect them to repeal and replace with a very limited set of provisions such as allowing young people to stay on parents’ health plans and some protection for pre-existing conditions. Many of their “new” health policies will be punted down the road a few years.
  • Fewer people will have health insurance. The big threat to providers involving Obamacare repeal is the impact on the number of insured Americans. Consider two facts which loom large. First, today 17 million more people have health insurance than had it prior to Obamacare. Second, people with health insurance utilize twice as much healthcare as those without health insurance and their providers get paid for that care. The increase in people insured has had a positive impact on DMEPOS suppliers and the impending reduction in the number of insureds will have a negative impact on DMEPOS suppliers. The significance of that impact will depend upon the severity of the reduction in those with insurance.
  • Medicaid reductions pose a significant threat to DMEPOS suppliers and users. The majority of the people who gained health insurance as a result of Obamacare came from additions to the Medicaid ranks. Further, nearly 60% of the disabled population gets health insurance from a public plan, such as Medicaid. Compare that to 25% of the non-disabled population age 65 and under. People with disabilities, and those serving their healthcare needs, depend upon a strong Medicaid system. There will be reductions in the number of people covered under Medicaid, but the extent of those reductions will determine the net effect of repeal on DMEPOS suppliers and beneficiaries. This is the key issue in “repeal”.
  • Price to HHS is a positive. Georgia Congressman Tom Price as a cabinet member running HHS (which includes CMS) is a welcome development. In Price we have a person who understands healthcare delivery from a provider perspective (former orthopedic surgeon), understands DMEPOS and the people who use it. Too often the Obama Administration viewed profit motive in healthcare to be an evil in need of elimination. That thinking leaves behind a legacy of 40% reduction in the number of HME suppliers, lower profit in DMEPOS and a dramatic reduction in access to necessary medical equipment and assistive technology for the frail elderly and disabled populations. Price will be a huge improvement.
  • We have a real shot at reform of the falsely named “Competitive Bidding.”  We know the program isn’t working and a lot of folks in the Beltway now understand this also.  A 40% reduction in HME suppliers over the past 5 years has limited access to needed medical equipment and assistive technology, and obviously crushed businesses.  I expect to see modest reform.  But don’t get crazy – we won’t see large increase in reimbursement, but rather reform around the edges and correction of the most egregious elements.
  • New products will be an important part of the equation for DMEPOS suppliers and beneficiaries. The importance of new products in the DMEPOS business model will increase in coming years. Look for a change in philosophy at FDA and CMS away from being a safe keeper to much more of a facilitator of new products and technology. Smart suppliers of DMEPOS will capitalize on the flow of new products.
  • Growing consumerism and out-of-pocket obligations. Republican plans will likely lead to even more health plans where consumers pay large amounts out of their own pocket. This will occur in private plans and to a lesser extent in Medicaid. Higher co-pays and deductibles are problematic for healthcare providers. DMEPOS suppliers will need to get better at billing and collecting from consumers. Further, suppliers need to be more patient-centric and get better at presenting health solutions directly to patients and their families.