RESMED TO INCREASE PRICES SIGNIFICANTLY TO INTERNET CUSTOMER

[Slinky]

Well now, WNJ, what do YOU know about a Resmed S8 CPAP since you have a Respironics?. Why would you expect BillBolton to have knowledge of a Resprironics CPAP if he doesn't have one? Why shouldn't BillBolton stand up for a Resmed product? He's Australian and its an Australian company. And Resmed makes a darn good CPAP. Its not like he's defending a poorly made or designed product. He has a Resmed device and he's getting good therapy w/it and he likes it. He's not knocking your Respironics device.

I don't like some of Resmed's policies but I sure as heck do like their product!!! And, yes, I have had a Respironics autoPAP, and I got good therapy w/it but I found I much preferred my Resmed.

[WNJ]

I can’t recall that I’ve ever said anything particularly disparaging about the quality of ResMed machines. My first CPAP was an S8. It was okay for a straight CPAP. I got lousy service from the DME. I wanted an auto, so I chose a Respironics. It seemed to fit my needs better. My wife is using a VPAP Adapt SV. All indications are that it is a very good machine. We both use ResMed masks.

I loath ResMed’s (and Respironics’ and F&P’s) marketing practices and I believe they should be outlawed. BillBolton is defending ResMed’s marketing practices.

Wayne

[norm]

I don't think the issue here is Resmed getting a larger markup, at least in the short term. Presumably it sells its machine at wholesale and the DMEs mark up a lot and the internet providers not so much.

So the question for Resmed is what outlet is best for its business, the DMEs or the internet, or it doesn't matter so long as their machine are available to people one way or the other.

The problem here, I think, is that if Resmed thinks the DMEs are its best marketing outlet, the DMEs cannot survive on price competition. So if Resmed takes no action, ultimately the DMEs will have to reduce price (and services, such as they are) or disappear.

I'd like them to disappear. I did get great service from my DME and I think the patient rep does care about what he is doing. But my insurance company paid the sleep center that did my study a fortune and for a fortune it can take an extra 10 minutes and tell me how to use the machine. I agree that would rather order on line and not do with the services the DME provides, even though, as I said, my local DME provides good services.

But this is a choice that Resmed does not want me to have. I assume it is because it thinks, in the long run, it will sell more machines, and in the long run, keep prices higher, if it uses a DME model.

Of course, this raises another issue, which people have touched upon: should Resmed have the right to choose the retail outlets for its products, either directly by not selling to internet providers, or indirectly by makiing internet providers charge more than the internet market will pay for a machine. (I would rather buy from a DME than an internet provider if there is no price advantage, since the DME is local and does provide services, at least in some cases.)

I would say no--they should have to sell wholesale to anyone who will purchase enough machines from them. But the Supreme Court basically said it is their business and they can market as they want, so long as they do not have too much control of the market.

In fact, if we look at devices with exhale relief, there are only two companies, and they have a duopoly (I think that is the right term). Too much market power in my view and maybe a lawsuit would prevail. But with the justices on the Supreme Court--almost all of whom are economic conservatives, and by this I really mean big-business people, although a few have some sympathy for the consumer, not much, but some.

Resmed can also argue that its decisions are good medically. I don't buy this, but this is what the argument would be: the DMEs make it more likely that people will purchase machines (they deliver them right after the sleep study and provide support, improving compliance) and use them. Fewer people would end up with machines, and use them correctly, if there were only internet providers.

I am not going to buy another Resmed machine, though, if they go ahead and try to force the internet providers out of business. And I guess I am going to write Resmed and tell them this.

Now lets try to get one of the smaller manufacturers to make a good machine with exhale relief.

--Norm

[Slinky]

Okay, talk about strange twists of fate. A friend from one of my genealogy lists were exchanging info today. I happened to mention my upcoming bi-level titration. Turns out she is a DME supplier! So, of course we got to trading e-mails about CPAP and the Medicare reimbursement cuts and Resmed's online DME pricing policies. She sent me this.

http://s112.photobucket.com/albums/n174 ... resmed.jpg

[WearyOne]

SERIOUS QUESTION:

There is a local DME who gives AMAZING patient services to CPAP users and loves every one. They also boast a 95% compliance rate. They have a robust supply replacement in place and all of the local doctors think this DME is the best.

Question: They bill insurance $1100 for a CPAP. This cost covers not only the equipment, but all of the costs incurred in providing this excellent patient support like 3 delivery vans, 4 RTs on staff, local advertising, patient lunches, etc.

I guess they're thiefs huh and don't deserve to bill for the $1,100. I wonder what would happen to this great level of patient care if they had to start billing $500 for a CPAP "because someone saw it cheaper online."

What say you?

Serious Questions.

What if I don't need three delivery vans, four RT's on staff, local advertising, patient lunches, etc? What if I know what I'm doing and all I need is a backup machine or a new one because my old one broke? Should I have to pay for the three delivery vans, four RT's on staff, local advertising, and patient lunches when all I need is a machine that I can halfway afford because my insurance deductible is so high I have to pay for it out of pocket? Or maybe I don't have insurance at all?

And what if I already get excellent customer support and robust supply replacement options from an Internet provider who offers medical equipment I can afford?

Pam

_________________

CPAPopedia Keywords Contained In This Post (Click For Definition): CPAP, DME

[completelyhosed]

Slinky, YOU RULE!!! Please start a new thread with this Resmed document. This is terrible news that needs to be headlined. Every cpap user should see this.

To STOP THE BLEEDING, those who don't believe any guest posts need to reconsider their position. Thanks.

[billbolton]

BillBolton is defending ResMed’s marketing practices.

Where?

[WNJ]

How would you characterize our disagreement?

It has nothing to do with the general quality of ResMed products.

Wayne

[ColinP]

Resmed's website has their financial results up. Even though they increased turnover, their profits are down. Which I suspect is why they're trying to milk us, their very own cash cow.

http://investor.resmed.com/phoenix.zhtm ... highlight=

Colin[/url]

[alnhwrd]

One might be benefited by the DME services the first time they get a CPAP, mask, etc. But after that, why do you need them? You know how to work the CPAP, you know how the mask works, so why do you need someone (who probably doesn't use CPAP) to tell you what you already know? Answer: you don't, so why pay for what you do not need?

[ColinP]

One might be benefited by the DME services the first time they get a CPAP, mask, etc. But after that, why do you need them? You know how to work the CPAP, you know how the mask works, so why do you need someone (who probably doesn't use CPAP) to tell you what you already know? Answer: you don't, so why pay for what you do not need?

And that is what is going to bite Resmed et al on the bum one day - as the market matures and more people are buying replacements than are buying for the first time, they will shy away from the companies who use strong-arm tactics to push prices up...

Colin

[Slinky]

Resmed's website has their financial results up. Even though they increased turnover, their profits are down. Which I suspect is why they're trying to milk us, their very own cash cow.

http://investor.resmed.com/phoenix.zhtm ... highlight=

Colin, I strongly suspect that Resmed's profits were down because of the HUGE Voluntery Recall they undertook in 2007. And, frankly, I greatly admired and still admire the company for that Voluntary Recall. Resmed took it upon themselves to totally replace something like 300,000 S8 xPAPs at no charge to patients that contained a out-sourced part that made for a possible bad connection from the power cord to the unit that COULD have been a POSSIBLE fire hazard (only 7 incidences of sparking as I remember it - and could be wrong going from memory). Resmed sent letters to every known individual owner of the defective units and to all DME suppliers who had carried the devices w/in those serial number ranges as well as provided the serial numbers and announcement of the Recall to the news media. They reimbursed DMEs for expenses incurred in replacing the units and hired SteriCycle to handle the replacements that DME suppliers wouldn't and paid a generous stipend for each device for SteriCycle to do so. As I remember it, Resmed paid SteriCycle $115 per device for each replacement they handled.

My own sheister local DME would NOT handle the replacment of my Vantage (my Elite was not subject to the Recall). I made sure that Resmed was made aware of that fact. It was replaced thru SteriCycle. That Recall certainly gave Resmed a good idea of which local and online DME suppliers were "good" ones and which weren't.

Around the time of the announced Recall, Resmed also changed CEOs w/the previous CEO retiring. I've often wondered whether the Recall had anything to do w/his retirement and these pricing policies a result of the new CEOs efforts to improve the companies financial situation. I also wonder if these punitive pricing policies towards online DME suppliers isn't directly related to the per centage of suppliers local and online who were not cooperative w/the Recall and replacement.

Mind you, this is all either from my memory of the Voluntary Recall or my speculation of the situations. Certainly Resmed has good cause to need to increase their financial situation. If Respironics and Puritan Bennet follow thru w/their rumored price increases, what is THEIR justification for doing so? The opportunity to charge what the market will bear rather than a reasonable profit and market share?

[DreamStalker]

Lots of great posts here.

I know some may gasp at my thoughts on this but ...

I think ResMed or any other business has the right to sell it's products at any price they wish and to whomever they wish. That said, I also think ANY business (including internet businesses) have the same right.

So, ResMed (and Respironics and others) should not be telling internet CPAP providers what price they should sell their products ... otherwise, it's not a free market. Furthermore, the courts should not be telling us who we can sue or cannot sue ... lawsuites should stand on their own merits.

[ColinP]

You're right Slinky, without the $12.3 million costs of the recall they would have been comfortably up for the quarter. Even with the recall, their profits are down, but they are still in profit. I suspect the best thing to do is to buy their shares, and use any profits to fund your next cpap

[Slinky]

, gotchya, ColinP. I understand what you are saying but they need Wall Street's good graces to stay successful.

Their product is good enough, if I need to go to a bi-level after this upcoming titration, I'm gonna go for the Resmed VPAP Auto. Gotta do my part to keep them in business!