Corporate responsibility and misplaced perceptions.

dsm · Post by **dsm** » Wed May 02, 2007 3:31 am

This post is entirely spontaneous & based on a number of events that I have observed as a Cpap user & regular here at cpaptalk.

For many months there was an unfortunate hate campaign levelled a Resmed. Anyone who denies this took place is in a different planet to the one I live in.

The vitriol was intense & some of the arguments here were quite unfortunate - the case against Resmed was that they were increasing their prices & putting in place an anti-online policy. 'Ripping people off' was the common sentiment.

Then in the past few days we learned that Resmed was doing a voluntary recall of their early S8 cpaps. This was BIG news. The numbers were enormous (300,000 potential machines).

The company announced in their recent press releases that they wrote of approx $25 mill (I am assuming US $) in advance for the past quarter to cover this recall. Their shares dropped from about $48 to about $42.

The details of the problem were that Resmed contract out to a third party the manufacture of the power board. They have (from my own pulling many machines apart) used a very similar power board since their S6 models thru the S7 models & the Vpap IIIs and S8s. This makes economic sense in that it reduces cost of manufacture.

The major difference that occurred between the other models & the new S8 was that the power cable connector changed from the large 3-square pin computer style power socket connector to the now familiar 2-round pin plug (what I call the shaver power cable power connector).

When Resmed contracted this work out they obviously expected the same reliable manufacture of a near identical power board as the previous models (except for the switch to the 2-round pin plug). It seems their contractor let them down big time. They appear to have used an inferior method of mounting the new round power pins and on some machines subjected to heavy use (moved a lot, power cord flexed a lot), some of these pins worked loose & were then able to cause arcing between the pin and the land pattern on the power board power input socket. I have closely examined the power supplies in all Resmed models from the past 5 years (have done the same with Respironics and Puritan Bennett as well as Fisher & Paykel units).

It is quite clear to me that Resmed has known of this problem for many months. I say this based on logical deduction ... Resmed didn't just learn of this last week. They wrote of the $25mill in this past quarter in order to cover this situation which means their accountants and auditors have looked into how the company could handle the obvious recall and how they could protect themselves financially. So, by deduction, when did they know ?. By further deduction it seems to me that they have been preparing for this unfortunate (for them) recall since 2006. It is obvious the evidence mounted slowly, then at some point Resmed knew they had to 'bite the bullet' and act. But such action takes a lot of thoughtful planning.

So now we have a logical reason why Resmed, needing to be financially responsible to its shareholders and customers, had to devise a way of honoring the recall and protecting their business. This clearly involved putting in place some unpopular policies re pricing & sales They needed accurate figures for estimating how long it would take to recover the losses) but then the muck hit the fan here in cpaptalk. Some people here just went ballistic others lept in and pounded Resmed with gay abandon. The attacks offended some of us but were supported by others who clearly liked joining in attacks on well defined targets. If we defended Resmed we got accused of being Resmed employees (a dishonest fabrication repeated against a number of people who used to post here regularly - it certainly happened to me more than once - most recently I publicly denied it and it only goes to show the level to which some unfortunate posters will stoop to make a hollow point).

So lets look at how responsible Resmed was ?. They have made an unqualified offer to replace any machine that had the problematic power supply. The reason I am so impressed with this offer is that I purchased my S8s in the US & brought them to Australia. BUT, Resmed has now told me they will replace these two US machines (one new unused & one slightly used) with two new local ones without any debate as to where & how I bought them. That impressed me immensely & told me how responsible Resmed was being in regard to this recall.

In fact, today I felt a good deal of sorrow at what garbage they have had to put up with from some people (you know who you are) who were so convinced they had proof Resmed were just plain bastards out to rip everyone off when in fact Resmed were doing what they could to protect their business so that once they had, they could do the honorable thing and announced a general *unqualified* recall.

I joked earlier in the thread on the S8 recall that they wouldn't take my machines back because I bypassed their local sales outlets & bought overseas models. I was so wrong. They didn't quibble !!! even when I told them how & where I bought them !!! (they may have had good reason to believe I bought dumped machines - that is what they now look like to me - I never could understand why such new machines were on sale at such low prices. Mine have been just great but they were cheap).

I am not embarrassed to say that I am so proud of them as an Australian and them being an Australian company. They were willing to do the honorable thing for their dealers and customers. This company are heros to me and I can say that I am somewhat miffed at the dishonest remarks and some lies that were spread about them here while the price controvesty raged. Some people went so far over the top in their anti Resmed rants that I believe some humility is in order (but I doubt it will appear by way of any contrition - perhaps just more vitriol).

Anyway, I am saying that Resmed is a company I will be proud to do business with in the future & I wish them well.

Doug Marker
(I also am stating that I am totally uninvolved with Resmed the company or any part of their business - just a cpap user who started off with a great Remstar Auto & who regards that as a classic machine but who now also greatly respects Resmed)

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CPAPopedia Keywords Contained In This Post (Click For Definition): resmed, CPAP, Power, auto

Slinky · Post by **Slinky** » Wed May 02, 2007 4:54 am

Hurrah for you, Doug. I'm with you 100% on this!

AND - if Respironics follows thru on restricting the sale of their software online as Resmed did maybe people will begin to appreciate just how good an xPAP machine Resmed produces.

tangents · Post by **tangents** » Wed May 02, 2007 5:27 am

Doug,

First let me say, if I've offended you or anyone else about the Resmed recall, I sincerely apologize. I jumped in on the thread when the subject of actual machine cost came up. All manufacturers use a similar markup on their products, and if the thread had been about Respironics, I would have posted the same thing. Again, I apologize if I acted in a "pack dog" manner and hurt any feelings.

I'm new to the forum and new to CPAP, and find the support here fantastic. I like the humor that gets mixed in with the postings, too, and sometimes (probably mostly) think I'm funnier than I am.

Thanks for your post, I admire your loyalty, and I appreciate you sharing your knowledge with us Newbies.

Cathy

dsm · Post by **dsm** » Wed May 02, 2007 5:56 am

Cathy,

Please don't feel I was picking on you. Snoredog knows it was him - but the mitigating circumstances in regard to Snoredog and his attitude to Resmed, is that most of us know he goes off the rails when talking about them but on almost any other topic he is lucid and a very knowledgeable poster (when not telling people they suck )

But, recently I saw him post a great comment on the Quattro mask & the issues with the Ultra Mirage Full Face mask so perhaps even Snoredog may now realise that Resmed had more life threatening issues they were grappling with over the past 9 months than what cpaptalk people thought of them.

I really don't want to open old wounds but I am forcfully making the point that things aren't always what they seem to be & I am now satisfied that Resmed have shown more integrity and smarts than many of us gave them credit for 4 months ago.

I only phoned them yesterday to enquire as to if they would take 1 of my machines back, then today re the 2nd one (still new & unused). I really did not expect them to be so agreeable as in my case they may well have a good reason to say 'take em back to where you bought them' but they didn't, they merely appologised to me that the replacement machines would be local ANZ models.

This really has to be hurting them and their people but they have been so damned nice about it.

Like I said, I am proud they are an Aussie company.

DSM

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CPAPopedia Keywords Contained In This Post (Click For Definition): resmed, mirage

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CPAPopedia Keywords Contained In This Post (Click For Definition): resmed, mirage

Wulfman · Post by **Wulfman** » Wed May 02, 2007 6:20 am

Doug,

I make no apologies for anything I've said about ResMed or any of the others.
Yes, there is "Corporate responsibility and misplaced perceptions".....mainly in the fact that neither THEY or any of the other manufacturers consider US to be their "customers".....and to me that is a "misplaced priority" on THEIR part.
I do use one of ResMed's masks and consider it to be one of the best on the market. I feel the same way about the Respironics machines that I have. (but I just can't warm up to their "M Series")
But, when it comes to "nationalistic" loyalty (pride) to any of these companies, I don't have any. I plan to use what works best for me.
Depending on what Respironics decides to do with their software availability will determine how I feel about them.

As far as this ResMed recall goes.....it serves them right. They got caught taking cheaper shortcuts (in my opinion). How often have we ever witnessed the "there's never time to do it right, but there's always time to do it over" scenario???

I have to wear this equipment. WHOSE I wear depends on several factors. Going into this therapy, I was interested in the product that provided the software and nightly statistics so I could self-monitor my therapy. I'm happy with the products I'm using, but won't blindly support the respective companies' stupidity or their actions.

I have no problem with "burning" ANY of them for their corporate greed and mis-guided activities that are not in the best interests of the ultimate users.

Best wishes,

Den

dsm · Post by **dsm** » Wed May 02, 2007 6:34 am

[quote="Wulfman"]Doug,

I make no apologies for anything I've said about ResMed or any of the others.
Yes, there is "Corporate responsibility and misplaced perceptions".....mainly in the fact that neither THEY or any of the other manufacturers consider US to be their "customers".....and to me that is a "misplaced priority" on THEIR part.
I do use one of ResMed's masks and consider it to be one of the best on the market. I feel the same way about the Respironics machines that I have. (but I just can't warm up to their "M Series")
But, when it comes to "nationalistic" loyalty (pride) to any of these companies, I don't have any. I plan to use what works best for me.
Depending on what Respironics decides to do with their software availability will determine how I feel about them.

As far as this ResMed recall goes.....it serves them right. They got caught taking cheaper shortcuts (in my opinion). How often have we ever witnessed the "there's never time to do it right, but there's always time to do it over" scenario???

I have to wear this equipment. WHOSE I wear depends on several factors. Going into this therapy, I was interested in the product that provided the software and nightly statistics so I could self-monitor my therapy. I'm happy with the products I'm using, but won't blindly support the respective companies' stupidity or their actions.

I have no problem with "burning" ANY of them for their corporate greed and mis-guided activities that are not in the best interests of the ultimate users.

Best wishes,

Den

ddpelp · Post by **ddpelp** » Wed May 02, 2007 6:39 am

They are a business to make money.. period.. No other reason.. If you think they are in it for end users then that is fine but you are still believing in the tooth fairy too I would assume.

They screwed up on their outsourcing. They got caught.. their financial problems would be far worse if someone got hurt by continued use of their defective product.

They did what they HAD to do nothing more nothing less. They were in a corner like all mfgs that have a recall. Too bad.. but I sure do not feel sorry for them. They could care less about the end users other then we pay the bills and make their profit.

oceanpearl · Post by **oceanpearl** » Wed May 02, 2007 6:52 am

It's a free market and there are many manufacturers out there making machines. If you don't like Resmed, my recommendation is to go elsewhere for your products.
Respironics has every right to sell their software only to DME's. I am not happy about that but I will somehow work around it,
My pulmonary doctor said that there are people who are putting their health in danger by trying to self diagnose and reset machines at a whim.

mikemoran · Post by **mikemoran** » Wed May 02, 2007 7:14 am

Let me first say I am a Resmed Auto user and have been happy with their products. But I do have to take issue with a company being praised for fixing a problem that they caused. Whether by design flaw or souce selection, they created a product that could cost them many more millions in liability if fires and deaths occurred. So the recall was in the company's best interest.

Then to claim that their restrictive trade policy was justified to generate the necessary revenues to cover their error, is really a reach. Let all the new customers pay for the faulty products we put out into the market place. Come on, you really think that was their motivation. Besides their policy change did not increase their bottom line. They are still charging the same to the DMEs, they only limited the price that could be ultimately charged to the public.

It was very clear from the association and supplier meetings that the Brick and Morter DMEs were complaining about internet sales impacting their bottom line. Resmed policies were generated in response to those demands not patient needs. We are not Resmed's customers plain and simple. The Doctors and DMEs are. They never intended to market to us. The reason their are so many Resmed machines out there is because they have locked up a number of major distributors like Kaiser.

So I can only say its good that they take responsibility for their own errors and don't make their customers pay for their mistake. But recognize their action was as much preventative. They fixed it before they really got caught. And as a consumer I still have a right to be angry with them for putting good products out of reach of a lot of people that would benefit from them.

blowfish · Post by **blowfish** » Wed May 02, 2007 7:31 am

blowfish · Post by **blowfish** » Wed May 02, 2007 7:34 am

oldvaham · Post by **oldvaham** » Wed May 02, 2007 8:17 am

I concur with MikeMoran for stating the right reasons. I too use ResMed and have been happy with their products. That said, I am disappointed with their decision concerning their software availability in the US. It's good and functional. However, I have had the occasional problem with it. I happen to think that the individual is responsible for their own health. When I visit my doctors it is a collaborative effort. If I disagree with their direction I say so. If I have a question on one or another drug, I ask why that particular medication and its benefits. If I disagree, I will ask for a different one. It's a discussion rather than a dictation. Same for my therapy with ResMed equipment. I want to know what's happening.

ResMed offers products that report these events. I made it known to my DME that I will be a participant in my therapy. Not only did I want a CPAP unit that provides feedback, I wanted one that I could modify to my changing needs. And, thanks to the good folks here, I know that my titration study provided the minimum. Looking at the nightly results I have determined that my requirements are significantly different from that one "study." I am thankful for ResMed's S8 ACPAP features and capabilities. However, I am disappointed with their decision concerning their software products, as I have stated.

Pleasant Dreams to all,
Ken

Wulfman · Post by **Wulfman** » Wed May 02, 2007 9:14 am

dsm wrote:And yes I am proud of them as an Aussie - blindly ??? - you can be as heartless as you like ("it serves them right."). I feel they have done a very good thing. And to imply they took cheap shortcuts is your cheap shot !!
"They got caught taking cheaper shortcuts (in my opinion)." what a low opinion !!!. Based on what evidence ???.

So what do you think of companies that manufacture in Mexico - in China ? - (is that as close to slave labour as one can get ???) Resmed contracted out the power supply board - they do the main manufacturing in Australia - so how does that qualify them as cheap ?.

I did note your role in the anti Resmed crusade. I see you are still proud of it & without any substance to back it.

When companies make "things" (or have them manufactured for them), their design teams draw up the specifications and then either manufacture those things themselves or contract them out to other manufacturers. "SOMEBODY" made a big BOO BOO in this one......design team or manufacturer. If they DIDN'T have them made in China, maybe the SHOULD have. All you have to do is open up ANY computer and see where that stuff is made.....mostly China. Is it "slave labour"? Everything's "relative".....they like to eat, too. This outsourcing for cheaper labor has been going on since the end of WWII under the Marshall Plan and the reconstruction of Japan. (Think about how much stuff used to be made in Europe and Japan until the costs got too high)

The market place has had its share of recalls in recent years. Hewlett Packard had a recall on printer cords a few years back. The SONY (manufactured) laptop batteries that exploded in a number of brands of machines. And, another one I've had personal experience with is some massive motherboard failures in many of Dell's desktop computers.
Then there's the auto manufacturers.......

As Mike noted (questioned) about how their restrictive trade policy against Internet sellers could possibly be partially paying for this screw-up (when there was no additional revenue in it for ResMed) is also a mystery to my logic, too

Den (calls 'em like he sees 'em)

rested gal · Post by **rested gal** » Wed May 02, 2007 10:08 am

Thank you ddpelp, Wulfman, mikemoran, oldvaham, and mth712 for expressing what I think, too.

ddpelp wrote:
"They screwed up on their outsourcing. They got caught.. their financial problems would be far worse if someone got hurt by continued use of their defective product.

They did what they HAD to do nothing more nothing less. They were in a corner like all mfgs that have a recall. Too bad.. but I sure do not feel sorry for them. They could care less about the end users other then we pay the bills and make their profit."

mikemoran wrote:
"I do have to take issue with a company being praised for fixing a problem that they caused. Whether by design flaw or souce selection, they created a product that could cost them many more millions in liability if fires and deaths occurred. So the recall was in the company's best interest."

mth712 wrote:
"Actually it is very irresponsible of Resmed to wait until "they" were in a corner and until "they" were ready to recall machines. Someone could or may have gotten hurt or house burned down."

Wulfman wrote:
"As Mike noted (questioned) about how their restrictive trade policy against Internet sellers could possibly be partially paying for this screw-up (when there was no additional revenue in it for ResMed) is also a mystery to my logic, too"

tangents, I don't think you have anything at all to apologize about. This is not the first time that the poster who started this thread has been way off track in some of the conclusions he draws...in my opinion. But of course, we are all entitled to our opinions.

I agree with what oldvaham wrote:
"I concur with MikeMoran for stating the right reasons."

I believe mikemoran and ddpelp absolutely nailed it.

Snoredog · Post by **Snoredog** » Wed May 02, 2007 10:36 am

dsm wrote:This post is entirely spontaneous & based on a number of events that I have observed as a Cpap user & regular here at cpaptalk.

For many months there was an unfortunate hate campaign levelled a Resmed. Anyone who denies this took place is in a different planet to the one I live in.

The vitriol was intense & some of the arguments here were quite unfortunate - the case against Resmed was that they were increasing their prices & putting in place an anti-online policy. 'Ripping people off' was the common sentiment.

Artificially jacking up prices by 40-60% is what I would call "ripping" a person off, we know their costs didn't go up, now that this recall has come to light, it explains WHO they expected to pay for their corporate blunder.

If I was a SEC investigator, I would be looking closely back at those forward looking statements going back a few quarters. Painting a rosy picture for investors then pulling the rug out from under them ussually doesn't go down to well on wallstreet.

dsm wrote: Then in the past few days we learned that Resmed was doing a voluntary recall of their early S8 cpaps. This was BIG news. The numbers were enormous (300,000 potential machines).

The company announced in their recent press releases that they wrote of approx $25 mill (I am assuming US $) in advance for the past quarter to cover this recall. Their shares dropped from about $48 to about $42.

Hopefully you dropped off your resume while you were there cause you have to be a corporate spokesperson, let's play down the actual cost of this recall, might as well fudge the numbers and cut it in half if you are going to do it at all. Where did you get this $25 million cost from? WHO are you trying to mislead with those inaccurate numbers? It is just like your AutoScan sample reports you post, you don't bother telling the ones reading it that it actually doesn't come with SAO2 data and that you only added that part in.

But if you don't work for them, WHY are you misleading everyone here by misquoting and cutting the costs of this recall already been reported in press by MORE than $25 million?

They took a $59.7 million charge against the quarter NOT $25 million.

A charge you attempt to justify with 40-60% price increases to us USA patients who have a disorder and many don't have medical insurance. Then they penalized the ONLY on-line vendor (cpap.com) we had who sought to offer any financial relief to those patients. IF you had Insurance you did NOT purchase equipment from cpap.com they would not pay for it. NAME one insurance company that reimbursed us patients for purchasing DME equipment.

Here is what the actual Press Release from Resmed's website, you will notice is is NOT $25 million it is closer to $60 million.:

As described in a press release issued concurrently with this earnings release, ResMed has announced that it will conduct a worldwide voluntary recall affecting approximately 300,000 of its S8 flow generators. The Company is currently in discussion with the US Food & Drug Administration, and other regulatory authorities, regarding this action. The estimated cost of this action is $ 59.7 million which has been recognized as a charge to cost of sales in the consolidated statement of income and accrued in the Company's consolidated balance sheet as of March 31, 2007. These costs are still subject to finalization and approval of the Company's recall plan by regulatory authorities.

This minor $35 million oversight Doug goes to reinforce my other theory that if you give a aussie a pistol with only one bullet, eventually they will shoot themselves in the foot.

dsm wrote: The details of the problem were that Resmed contract out to a third party the manufacture of the power board. They have (from my own pulling many machines apart) used a very similar power board since their S6 models thru the S7 models & the Vpap IIIs and S8s. This makes economic sense in that it reduces cost of manufacture.

The major difference that occurred between the other models & the new S8 was that the power cable connector changed from the large 3-square pin computer style power socket connector to the now familiar 2-round pin plug (what I call the shaver power cable power connector).

When Resmed contracted this work out they obviously expected the same reliable manufacture of a near identical power board as the previous models (except for the switch to the 2-round pin plug). It seems their contractor let them down big time. They appear to have used an inferior method of mounting the new round power pins and on some machines subjected to heavy use (moved a lot, power cord flexed a lot), some of these pins worked loose & were then able to cause arcing between the pin and the land pattern on the power board power input socket. I have closely examined the power supplies in all Resmed models from the past 5 years (have done the same with Respironics and Puritan Bennett as well as Fisher & Paykel units).

Typical fashion, blame it on someone else, make the USA patients pay for it.

dsm wrote:
It is quite clear to me that Resmed has known of this problem for many months. I say this based on logical deduction ... Resmed didn't just learn of this last week. They wrote of the $25mill in this past quarter in order to cover this situation which means their accountants and auditors have looked into how the company could handle the obvious recall and how they could protect themselves financially. So, by deduction, when did they know ?. By further deduction it seems to me that they have been preparing for this unfortunate (for them) recall since 2006. It is obvious the evidence mounted slowly, then at some point Resmed knew they had to 'bite the bullet' and act. But such action takes a lot of thoughtful planning.

Here in the US the SEC frowns upon making forward looking statements and has laws against them, you cannot paint a rosy picture to investors then pull the rug out from under them. That is why their stock fell like a rock from $48 to $42 in a single day trading.

dsm wrote: So now we have a logical reason why Resmed, needing to be financially responsible to its shareholders and customers, had to devise a way of honoring the recall and protecting their business. This clearly involved putting in place some unpopular policies re pricing & sales They needed accurate figures for estimating how long it would take to recover the losses) but then the muck hit the fan here in cpaptalk. Some people here just went ballistic others lept in and pounded Resmed with gay abandon. The attacks offended some of us but were supported by others who clearly liked joining in attacks on well defined targets. If we defended Resmed we got accused of being Resmed employees (a dishonest fabrication repeated against a number of people who used to post here regularly - it certainly happened to me more than once - most recently I publicly denied it and it only goes to show the level to which some unfortunate posters will stoop to make a hollow point).

It does NOT change the fact they penalized cpap.com and all its customers for its own corporate blunders.

dsm wrote: So lets look at how responsible Resmed was ?. They have made an unqualified offer to replace any machine that had the problematic power supply. The reason I am so impressed with this offer is that I purchased my S8s in the US & brought them to Australia. BUT, Resmed has now told me they will replace these two US machines (one new unused & one slightly used) with two new local ones without any debate as to where & how I bought them. That impressed me immensely & told me how responsible Resmed was being in regard to this recall.

In fact, today I felt a good deal of sorrow at what garbage they have had to put up with from some people (you know who you are) who were so convinced they had proof Resmed were just plain bastards out to rip everyone off when in fact Resmed were doing what they could to protect their business so that once they had, they could do the honorable thing and announced a general *unqualified* recall.

I joked earlier in the thread on the S8 recall that they wouldn't take my machines back because I bypassed their local sales outlets & bought overseas models. I was so wrong. They didn't quibble !!! even when I told them how & where I bought them !!! (they may have had good reason to believe I bought dumped machines - that is what they now look like to me - I never could understand why such new machines were on sale at such low prices. Mine have been just great but they were cheap).

I am not embarrassed to say that I am so proud of them as an Australian and them being an Australian company. They were willing to do the honorable thing for their dealers and customers. This company are heros to me and I can say that I am somewhat miffed at the dishonest remarks and some lies that were spread about them here while the price controvesty raged. Some people went so far over the top in their anti Resmed rants that I believe some humility is in order (but I doubt it will appear by way of any contrition - perhaps just more vitriol).

Anyway, I am saying that Resmed is a company I will be proud to do business with in the future & I wish them well.

Doug Marker
(I also am stating that I am totally uninvolved with Resmed the company or any part of their business - just a cpap user who started off with a great Remstar Auto & who regards that as a classic machine but who now also greatly respects Resmed)

this is without doubt the funniest aussie psychcobabble I've ever read (well, excluding that beer belly association), but if I read any more of it I think I'm going to hurl, and it's only the middle of the week!

It reinforces my theory Doug that you have spent way too much time under the sun in the outback without sunscreen, not drinking enough water and possibly smoking way too much.

So tell us, did you drop off your Resume for the corporate dumpster diver position while you were there?

Mask

Additional Comments: Encore Pro 1.8

Corporate responsibility and misplaced perceptions.

Corporate responsibility and misplaced perceptions.

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