Manufacturer Pricing Policies

[NiceDMEDude]

Hello to all on the cpaptalk.com boards.

I own and operate both a traditional DME, as well as a website selling CPAP blowers and interfaces (I promise to never use this forum to promote either company).

The members of this group are amazing, and I have learned a TREMENDOUS amount from reading several thousand posts. The insight into the wants/needs of the patient (or customer if preferred) has been so helpful, especially in the DME side of the business.

I am fortunate in that we were already offering most of the patient-friendly policies that I see mentioned on this site, i.e. provide any machine the patient requests (regardless of cost to me), lenient mask trials, return phone calls same day, etc. Nearly everything an OSA patient wants are related to basic customer service and respect, and all companies should be able to offer this. But we all know that is not true, as many of you have your own horror stories related to dealings with DME companies, which is especially true of the nationals.

The threads that moved me to (finally) register and post are addressing the Minimum Advertised Price (MAP) policies which are either currently implemented or in the development stage by the various manufacturers.

I agree with the consensus of actual CPAP users, that these policies are myopic, short-sighted, and disrespectful of the end-user. The online market will eventually be larger than the local market, especially as insurance deductibles and co-insurance payments continue to soar.

The problem we are all about to encounter is the implementation of MAP policies by two more of the large manufacturers, which will obviously increase the online purchase price of blowers and interfaces.

The posts last week by "Guest" (under the ResMed Preferred Internet Provider thread) were so obviously coming from a person with a financial interest in MAP as to be laughable. The lambasting he received was well-deserved.

The DME industry is in a frenzy due to online pricing, and the manufacturers are feeling incredible pressure to appease them, or at least give the appearance of doing so. This is mainly due to insurers in certain parts of the country decreasing their reimbursement levels based on prices they observe on the internet, as well as local patients complaining about the prices online vs. the bricks and mortar outfits.

I apologize if this post seems to ramble, but this is a subject that has so many angles and so many people who will be affected, it is difficult to even begin to address it all.

I suppose my burning question to all of the good people on cpaptalk.com is this: If the Big Three (R,R, F&P) all implement MAPs, will you seek out blowers and interfaces from others (AeioMed, PB, ProBasics, etc.) who do not have MAPs? Or would you be inclined to use the most effective therapy, whether from one of the Big Three or any other manufacturer?

I understand that with one post to my name I will be viewed skeptically (as I should be), but I assure you I have no agenda except to get valuable feedback from the best-informed OSA patients in the world!

[Wulfman]

Hopefully, I won't have to find out. I purchased my original equipment 2 1/2 years ago and have, over that period of time, accumulated (hopefully) a sufficient number of additional machines, masks and other supplies to last me till I'm pushing up daisies or other significant advancements in the treatment of this condition come along.
Two features would attract me to other manufacturers......breathing relief (like C-Flex) and data-recording capabilities (along with software to interpret it).
These are what led me to Respironics' machines. The knowledge from being able to monitor one's own therapy is worth a LOT of money (as opposed to having to keep feeding the existing medical professions).....even though I believe I have my own settings pretty well "dialed in".

If the other companies want to play in this ballpark, they need to develop those features.

Best wishes and welcome to the forum.

Den

[mindy]

I agree with you, Den!

In addition, what would affect me significantly would be my financial and insurance circumstances at the time. If money is tight and insurance reimbursement not good, then I'd probably take whatever I could get for as low a price as possible. Otherwise, I'd want a data-capable machine with exhale relief.

Mindy

[jupmalis]

Thank you for your valuable news.

In talking with people at the DME I did business with, I kept repeatedly bringing up the pricing available on the internet. I kept hearing from one person in particular about future restrictions on equipment over the internet. It is clear that there is a conflict between the DME business approach and the internet business approach, and the manufacturers are getting caught in the middle.

As I read your piece, I took a strategic approach. Even before I read the end part, I thought of some manufacturers making alliances with DME's at the expense of the internet market, and some manufacturers deciding to exploit the internet market. So I agree with your suggestion.

Unfortunately, there is no consumers reports for xpap machines. And with the one DME that I have experience with, I sensed an arrogant attitude that 'we are professionals, trust us'. And they made claims about gray market goods and counterfeit goods over the internet.

I have no question that the internet, and consumer demands for competitive pricing, will cause a shift in the marketplace along the lines that both you and I foresee. The trouble will be for the new manufacturers to gain credibility, much as I see FP struggling to establish itself in the US market against the big two. Maybe FP should ally with the internet sellers, and extend its product range into xpaps. My DME said FP was considering going the other way.

[rested gal]

Excellent post, NDD.

The problem we are all about to encounter is the implementation of MAP policies by two more of the large manufacturers, which will obviously increase the online purchase price of blowers and interfaces.

If I'm understanding you correctly, you have inside information that Respironics and Fisher & Paykel are seriously about to jump on the "required minimum price" bandwagon that resmed started a year ago?

I suppose my burning question to all of the good people on cpaptalk.com is this: If the Big Three (R,R, F&P) all implement MAPs, will you seek out blowers and interfaces from others (AeioMed, PB, ProBasics, etc.) who do not have MAPs? Or would you be inclined to use the most effective therapy, whether from one of the Big Three or any other manufacturer?

Speaking for myself, if a particular machine offered by a "required minimum price" manufacturer were the only machine that could treat me well, yeah, I'd have to go with it. But if I could get good treatment from a machine manufactured by a manufacturer who lets the free market set prices, I'd definitely buy that "no minimum price requirement" manufacturer's machine next time. And I'd actively recommend those "no required minimum price" machines to others if the treatment would suit them.

Here's what I think the "no minimum required price" manufacturers should design in order to compete big time on the internet with the "minimum required price" guys, especially if Respironics and Fisher & Paykel do what resmed did --

Build cpaps and autopaps with a pressure relief feature during exhalation, that can be used even in auto mode.

Build cpaps and autopaps and bipaps that provide treatment efficacy info (exactly like resmed's) that can be accessed on the machine LCD -- daily, weekly, monthly averages, and with AHI info further broken down into AI and HI.

Provide FULL DATA software the cpap user can buy, like Respironics' EncoreViewer.

Puritan Bennett is already there, except for one little thing more they need to do -- add a feature for pressure relief during exhalation in their 420G cpap and 420E autopap. They also need to get their software to record full data with their bipaps.

Do those things, you manufacturers, and you'll have built a better mousetrap. Very attractive to lab rats.

You'll have a big part of the cpaptalk community on your side. If that matters.

NDD, you've obviously been reading a lot on this board...you noticed one of my pet peeves -- that invalid-ish helpless sounding word "patient" that I dislike so much ... heheh:

the patient (or customer if preferred)

(bold added by me) -- yep, I do prefer that word. "CPAP user" will do, too.

Thanks very much for your input, NDD. And for the heads up about what you say Respironics and Fisher & Paykel are about to do. If that happens, for shame on them, too.

[FreeLancer74]

I'll bite.

I'm new to PAP. This is my third day to own mine. I went with an online vendor due to the HUGE price differnce between online and local DME. My local DME stated that a Respironics M-series A-flex was going to be $1200 and the heated humidifier was going to be another $350. My part was going to be $395 plus the monthly fee of $125. When I priced this with our hosts online shop, I was quoted less than $700 for the unit including the humidifier and smartcard module. My part was less than $150 plus a montly fee less than $75 ( I know alot of this has to do with insurance co-pay, ect). This is the machine I wanted and this is the machine I got. The fact that my local DME wanted to use the MSRP (I guess that was where the price came from) and the online shop chose to offer a discount (while obviously still making some kind of profit). I'm not a needy patient. Give me the technology, and as long as it does not break due to a manufactueres defect, I will be able to operate it and maintain it indefinately. After a reasonable amount of time, I expect it to wear out and I will need to replace it.

I would prefer to purchase what is best for my therapy. If the price/performance margin is too drastic, I will opt for a cheaper solution, though. My ability to stay compliant has more to do with the level of technology more than my interest in the therapy, so having the best technology for the money is a better buy for me. MAP will probably appease the DMEs some, but I would rather see DMEs give up on the xPAP part of their business and let the online shops deal it at the better rates. DMEs get to sell all kinds of other equipment, much of which actually needs local support like wheelchairs, oxygen, physical therapy devices. CPAP is such a small and portable thing, that if they lose out on this one area, so be it. Stop treating us like we are idiots and price gouging us. Apnea is a real medical problem and should be delt the same respect as broken limbs and cancer.

I don't mean to sound angry, I was just insulted at how my local shop tried to treat me and that I was forced to go out of town for my needs. I don't mind supporting my local businesses as long as they respect and want my business. If local companies are going to sell equivalent merchandise for twice the money, they will lose out. If the margins were closer in the above example, say the DME machine was like $150 or maybe even $200 more than the online shop, I probably would have stuck with them to keep my money local.

[Suz-E-Q]

I don't mind paying more at a Bricks & Morter place if there is true service that is also provided. That I believe is the difference between the internet and the value of the DME. Newbies, like myself, need a little more hand holding, follow-up and attention.

My DME blew right threw the training, one mask and I was off in less than 30 minutes...thank goodness I had already been on line to learn things from the folks here and had a friend who was 6 months ahead of me on the curve...because I already knew a lot so I wasn't too disadvantaged by this treatment.

BUT if I am going to pay more I do expect the service that should go with it:
-call me the next day to find out how my first night was or if there were any new questions with the first use.
-ask me to come in or come to my house after 30 days to take a look at my results and discuss mask selection and other potential issues with comfort, leaks, mouth breathing etc.
-even offer discussion group opportunities to share successes and to get help (of course that is a lot like this site)
-teach me about all my options before I get my first machine so I can be more educated about the choices (of course cpapatalk.com did that for me).
-etc.

I don't mind paying for that type of service. But I have gotten about the same amount of help and training from my DME as I would have gotten if I ordered my machine from the internet --- none!

So that is my POV...
Suzanne

[mindy]

That was really well put, Suzanne! I agree with all of your points.

Although my DME was speedy up front, I haven't gotten any of that kind of service and would buy my next machine on the internet.

Mindy

[Goofproof]

I, have done as Den has, stocked up on what I wanted, maybe have enough to get me througn my lifetime.

Medical equiptment manufacturers should play less with their markets and concern themselves with making a product of good value and selling it at a fair price.

When they come out with a product it should work correctly, not like the Remstar "M"agic, that has a defective data collection, and a poor HH system. There's no reason to put that kind of engineering on the market.

Each version of a product should work better than the last, not worse. What the manufactures and the DME's don't get is some of us won't fall in line, we vote with our billfolds, and there's more of us than they realize. Jim

[TGregg_Not_Logged_In]

Hello to all on the cpaptalk.com boards.

HI NDD, welcome to the board,

The members of this group are amazing, and I have learned a TREMENDOUS amount from reading several thousand posts.

Me too. I've helped a little but have gotten a TON of info here. As bad as DMEs and corporate bandits are, this board more than makes up for it.

I suppose my burning question to all of the good people on cpaptalk.com is this: If the Big Three (R,R, F&P) all implement MAPs, will you seek out blowers and interfaces from others (AeioMed, PB, ProBasics, etc.) who do not have MAPs? Or would you be inclined to use the most effective therapy, whether from one of the Big Three or any other manufacturer?

For the moment, my insurance company picks up the tab, and is too slow witted to realize they could save money by letting me buy stuff from the web rather than going to my mentally challenged DME. So for now, my answer is that I'll be buying the pricey stuff since I don't pay for any of it and can't get the less expensive gear.

Eventually, ResMed machines will cost the same as a new car and my insurance company will finally say "Enough of this!" Actually, that's a lot nicer than what they'll really say, but this is a family board. What I do then will depend on their decisions. Should they dump CPAP altogether or reimburse me for certain expenses up to a set limit, then I'll have some viable options.

I'm very unlikely to want to go with some weirdo brand name that nobody has ever heard of before unless I can easily return or exchange a purchase gone bad. But if a smaller outfit was able to offer a decent machine for a great price with a secure return policy - I'd take it. I don't need all the features like APAP, exhale relief. The only one I want is the ability to read the LCD and get my stats.

So I encourage you to look for a least one less expensive option that does show data, and does the basic stuff but costs less than the fully loaded models. Offer it for a fair price and a decent return option (extra charge if required) and somebody like me with worse insurance would be shopping.

[Guest]

Following this "logic" here, I guess all vacuum cleaner shops should just go out of business because, after all, what type of "service" could they possibly provide?

I'll just buy my vacuum cleaner online and save $150...the local store can just close for all I care.

And what about the vacuum cleaner manufacturer? He can just sell to a few internet companies (who, by the way, provide no demonstrable added-value service to the manufacturer that the local store once did)

Oh yeah, talk about getting smart? Perhaps one day the manufacturer will get smart and realize he can have his own web store...if service really doesn't matter.

[CPAP_Guy]

Many of the comments posted here are on the mark however I have to disagree with other comments that lay blame on internet sites for contributing to any posible price gouging or playing into the hands of Resmed. Internet site are just the postman, only delivering the mail. If you want to shoot someone, shoot the postmaster, in this case Resmed.

I have found that many of these site offer other name brand products at some of the cheapest prices on the internet. Boycott Resmed if you want but why cut off your head to spite your face?

[mindy]

Following this "logic" here, I guess all vacuum cleaner shops should just go out of business because, after all, what type of "service" could they possibly provide?

I'll just buy my vacuum cleaner online and save $150...the local store can just close for all I care.

And what about the vacuum cleaner manufacturer? He can just sell to a few internet companies (who, by the way, provide no demonstrable added-value service to the manufacturer that the local store once did)

Oh yeah, talk about getting smart? Perhaps one day the manufacturer will get smart and realize he can have his own web store...if service really doesn't matter.

I generally much prefer to buy local and when the difference isn't huge, I do so. But when a particular local store provides lousy service and much higher prices, then I can't see paying more for that. I think that's the essence of free enterprise -- letting the market forces work. When manufacturers set minimum prices, they are not letting the market work properly.

Mindy

[roster]

Following this "logic" here, I guess all vacuum cleaner shops should just go out of business because, after all, what type of "service" could they possibly provide?

I'll just buy my vacuum cleaner online and save $150...the local store can just close for all I care.

And what about the vacuum cleaner manufacturer? He can just sell to a few internet companies (who, by the way, provide no demonstrable added-value service to the manufacturer that the local store once did)

Oh yeah, talk about getting smart? Perhaps one day the manufacturer will get smart and realize he can have his own web store...if service really doesn't matter.

I think that is where we are headed and it is a good thing.

This computer that I am typing on is immensely more complicated than a vacuum cleaner or a cpap. I bought it online and get all the service I need online. I don't want it any other way.

For saving money and energy, let's get more manufacturers to sell online direct to the consumer from central distribution centers. Let's reduce the footprints of the big-box retailers and reduce the daily millions of trips we make to them.

[FreeLancer74]

Is it called "collusion" when two manufacturers get together to set pricing? Didn't some computer memory companies get sued in a class action lawsuit over this in the past couple of years?

And Guest, I see the point you are trying to make, but after reading several DME posts on this forum, here is my example:

Gas stations used to charge more for full service gas because they would come out, pump your gas, clean your windshield, check your fluids, and check your tire pressure. You paid and left without having to get out of your car.

NOW, you pay the higher price but only get the gas pumped for you and maybe your windshield cleaned. NOTHING like the service you USED to get, but you still have to pay the same (adjusted) higher price.

More money, less service. That is the problem. Everyone wants the quick buck but doesn't want to work for it. We are not asking for anything free, just reasonable or if we pay more, give us better service so we don't go down the street. It sounds to me like the DMEs are selling xPAP equipment as an afterthought to bring up their bottom line, but are not properly prepared or educated on it and the patients (customer) requirements for it.