My correspondence with Respironics

From the letter of veteran poster Den ...
This therapy has a horrible compliance/success rate (according to studies)....approximately 50%. The best way to improve on that is to get the users to be more knowlegeable about it, rather than being kept in the dark. Flow generators that don't collect detailed data should NOT be manufactured......PERIOD!

Completely true.

There those who do not see the therapeutic value of xPAP because their initial therapeutic pressure is not optimal; and, with no data reporting to provide constructive feedback, the machine is put in a drawer.

Thanks for taking the initiative to write this comprehensive letter.

Regards all - - Tom

I say:

-tell your congressman taxpayers are getting ripped off by cpap mfg's like Resmed, Respironics & F&P (Barney Frank or that dork Waxman would jump at this), give them PDF printouts of web pricing and the aforementioned clowns MAP policy
-encourage them to make all cpap machines OTC, they can't harm you anyway
-have Medicare limit CPAP purchases to $500

anyone watch Southpark? Them bastards! they killed Kinney!!

Hello Dennis,
You did a great job describing how local DMEs perform. I would have rather worked with my local DME, but they were so incompetent and uninterested in answering questions that I knew I needed to find support answers elsewhere.

Finding CPAP.Com and their forum solved everything I needed. I have bought all my equipment from them, and this forum has handled the few questions that surfaced. Now, with titration recording and ENCORE, I was able to tweak my titration early on to where it has been doing a good job in how I sleep and the numbers the numbers Encore reports. For certain that would not have happened with my local DME or doctor, and more than likely I would not have stayed on the hose.

Minimum pricing; I don’t like that approach for solving sales problems because it reduces the market’s ability to respond, and it gives a crutch to incompetent or uncaring businesses that will eventually fall out of the system anyway. Businesses must grow or die based upon their performance, and they need to be flexible enough to see the changing dynamics. Manufacturers who support this kind of pricing scheme create market openings for more flexible and cost effective manufacturers. Price control only spreads and delays problems, and does nothing to improve the deliverable going to the customer. Customers need service, affordable pricing, and suppliers need to be smart and responsive. They also need to be active in managing how their products are being supported. In my case, the local didn’t even carry Respironics when I bought my current machine years ago, and what they did have was old equipment that didn’t have any reporting ability or process capture.

On a positive note, it was good to hear that Mr. Pflueger is reading the postings. Hopefully, he’ll see that more people are getting actively involved in their medical needs using forums like CpapTalk to solve and avoid problems, and that not everyone can, or wants to push expenses off on an insurance carrier.

[quote="Roger..."]Hello Dennis,
You did a great job describing how local DMEs perform. I would have rather worked with my local DME, but they were so incompetent and uninterested in answering questions that I knew I needed to find support answers elsewhere.

Finding CPAP.Com and their forum solved everything I needed. I have bought all my equipment from them, and this forum has handled the few questions that surfaced. Now, with titration recording and ENCORE, I was able to tweak my titration early on to where it has been doing a good job in how I sleep and the numbers the numbers Encore reports. For certain that would not have happened with my local DME or doctor, and more than likely I would not have stayed on the hose.

Minimum pricing; I don’t like that approach for solving sales problems because it reduces the market’s ability to respond, and it gives a crutch to incompetent or uncaring businesses that will eventually fall out of the system anyway. Businesses must grow or die based upon their performance, and they need to be flexible enough to see the changing dynamics. Manufacturers who support this kind of pricing scheme create market openings for more flexible and cost effective manufacturers. Price control only spreads and delays problems, and does nothing to improve the deliverable going to the customer. Customers need service, affordable pricing, and suppliers need to be smart and responsive. They also need to be active in managing how their products are being supported. In my case, the local didn’t even carry Respironics when I bought my current machine years ago, and what they did have was old equipment that didn’t have any reporting ability or process capture.

On a positive note, it was good to hear that Mr. Pflueger is reading the postings. Hopefully, he’ll see that more people are getting actively involved in their medical needs using forums like CpapTalk to solve and avoid problems, and that not everyone can, or wants to push expenses off on an insurance carrier.

Reading this thread led me to wonder what the effect of the MAP will be on the "lowest price matching" offers currently provided by cpap dot com as well as by a number of other online merchants.

On the upside, finding one price listed anywhere which is lower than the MAP opens up one-on-one price discussion, which apparently need not be restricted to the MAP.

On the downside, will these offers be continued? And will they be meaningful, since they generally read something like:

cpap.com wrote:Yes, we will match our competitions documented price in most cases. Please send us a link to the website you found the lower price on, the name of the product, and its price.

If MAP is adhered to by sellers, then the provision of a link to a lower "documented" price becomes problematic. Will cpap dot com and others be able to offer price competition against an unverifiable "private" lower offer?

Snoredog wrote: ... -tell your congressman taxpayers are getting ripped off by cpap mfg's like Resmed, Respironics & F&P (Barney Frank or that dork Waxman would jump at this), ... ]

How about Arlen Spector?? Then maybe he'll leave baseball alone to clean up their own mess!!

DME Daddy wrote:
So what are CPAP websites, the wave of the future or a dying relic of the past?

I would think that's pretty much up to the insurance companies.

They're the ones paying the bulk of the $$$ to the DME's who are billing at outrageous rates.
What is actually paid is dependent on the contract between the DME and the insurance company....But I would guess that if the contract rate is 80% of billed rate, that the billing is inflated to make up the 20% difference....

The DME's will say it's value added due to their services, but in the year I've been dealing with my DME (a decent one, by the by) I haven't received what I would consider a whole lot of service.
Their service consists of shipping me what I request, and taking care of the billing to the insurance company.....

If the insurance company continues to pay $30+ for a $14 package of filters then they are directly feeding the bear that's eating them.

cheers
goose

I can't speak about insurance companies, but, Medicare pays 80% of an ALLOWED amount which is LESS than the Billed amount.

For instance: in 2007 the BILLED amount for a month's rental (of the 13 month capped rental) for just the CPAP was $135. BUT - the Medicare ALLOWED amount was $74.96, of which Medicare paid 80% which was $59.97 and my copay was $14.99. So the DME was getting paid $974.48 for JUST the E0601 CPAP plus any "service", "education", etc. they provided. Not QUITE so bad as the $1755 you might have thought they were getting paid for the CPAP.

Humidifier, mask, hose, etc. were paid in full at time of provision w/the Billed/Allowed/80%/20% ratios.

I think the advertised price thing is similar to Yamaha who doesn't allow prices of band instruments to be posted other than MSRP.

All those web sites say "call for price". They can sell at less than MSRP but can't post it. More cost for the internet seller to have more phone lines to quote the price.

So, maybe cpap.com and other internet retailers could something like the "call for price" thing and then give some kind of order number which the customer could reference when ordering?

[quote="Anonymous"]I think the advertised price thing is similar to Yamaha who doesn't allow prices of band instruments to be posted other than MSRP.

All those web sites say "call for price". They can sell at less than MSRP but can't post it. More cost for the internet seller to have more phone lines to quote the price.

So, maybe cpap.com and other internet retailers could something like the "call for price" thing and then give some kind of order number which the customer could reference when ordering?

MrRandom wrote:What a great letter you wrote! I really don't understand this "advertised price" vs "private price". What the heck does that mean? We're supposed to haggle over these machines like a used car?

MAP vs. "the price"

I work part time in the High end retail musical instrument field. Many of the makers have a MAP price (Minimum Advertised Pricing) to help protect the value of their product. To comply with MAP, a shop can only advertise the price as set by the manufacturer. Now, what the shop sells it for in the store or by working a deal is up to them them.

Its the same will CPAP gear. The shop can give you a lower price if you call but they have a set price that they must show one their website or trade publications. The down side is that it creates a very cut-throat market. Who will beat someone else's price by 5 cents.

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

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

It should be interesting to see how this all plays out. While ResMed, Respironics and F&P have allied themselves with the hopelessly uncaring and unresponsive (at least to patients) brick-and-mortar DMEs, that still leaves a number of 2nd tier manufacturers unallied.

Although I've got a couple of Respironics machines, I also have a Puritan-Bennett APAP with its Silverlining software. I find the PB machine treats my apnea just as well as the Respironics machine does, so I feel no great loss with Respironics pricing itself out in the stratosphere.

Will two markets develop? One for B&M DMEs, Medicare and insurance, while another market develops for self-pay. Personally, I hope so. I'd expect such a market to be much more responsive to patients concerns.

Perhaps the oximeter market provides some insight. Oximeter vendors used to sell strictly to health-care professionals, but now some address the personal market. Those that do so, despite some obvious blunders, seem to have been responsive to customer concerns and complaints, at least judging from postings made here.

Regards,
Bill

-SWS wrote:That's business acumen on steroids IMO. Great suggestion.

Thanks, SWS. I'm sure CPAP.com has already thought about package deals and weighed the pro's and con's. Personally, I'm not very optimistic though. I think Respironics has aligned itself at the highest levels of the company with the B&M DME's, just as ResMed did earlier.

DME Daddy wrote: So what are CPAP websites, the wave of the future or a dying relic of the past?

Predatory tactics usually don't work nearly as well as planned. The "law of unintended consequences" interferes. Sure, the B&M DME's may get some short term relief from the policy. Interesting isn't it? The B&M DME's are obviously feeling pain at the moment.

Perhaps the more relevant question would be: Do current B&M DME practices represent the wave of the future or a dying relic of the past?

I am reminded of the airlines in the U.S. which monopolized air travel while times were "good". The predatory, but unrealistic, pricing policies locked-out many competitors, but not all. As soon as the going got rough all the major carriers, save one, went belly-up. The companies, their unions, and employees were all in denial. They couldn't adapt in a changing world. Even after bankruptcy and government bail-outs they still haven't adapted very well. In comparison, the "upstart" airlines are doing quite well.

I would submit that the B&M DME's find themselves in a similar situation today. Struggling with outmoded business practices which are being rejected by consumers, instead of updating their business model they have opted to wield their clout in hopes of staving off the inevitable.

Funny thing, greed. It obscures vision.

Regards,
Bill

Velbor wrote:Reading this thread led me to wonder what the effect of the MAP will be on the "lowest price matching" offers currently provided by cpap dot com as well as by a number of other online merchants.
[snip]
If MAP is adhered to by sellers, then the provision of a link to a lower "documented" price becomes problematic. Will cpap dot com and others be able to offer price competition against an unverifiable "private" lower offer?

Experience shows most people don't make the call. Instead, they purchase another brand that makes a better offer visible.

They don't call because haggling for most people isn't a sport. Even if it was, it consumes more time than people want to invest in shopping. Haggling also sets up an implied promise to buy once the price-reduction dance ends. Personal interaction is the major reason given why people don't call for the better price most of the time.

When shopping on the Internet, forcing contact in an environment where it isn't the preferred way of shopping creates a disadvantage for that item. This is why this MAP approach to pricing is so harmful to those who impose it in a market place when their technology doesn't hold a performance advantage, or a dominant preference in the market.

CPAP equipment has nearly reached commodity status, so pricing is the major factor for achieving and maintaining market share. Take away pricing's ability to capture the sale, and you've significantly muted your products ability to sell its self.

Our current DME business model for commodities isn't going to be helped by MAP. Instead, we will begin to see new entrants into the market place who know that distribution through high volume outlet channels is a more predictable way to smooth their sales results. It is also a less costly way for obtaining distribution than through a “Rep” channel sales model.

As for the DMEs, they are going to need to get an Internet presence, and they are going to need to do what they should have done years ago. Hire people who are competent, care about what they are doing, and understand the technology and why it is important to their business. They are also going to need to do what they seem to do so poorly, and that is provide real customer support and service, and make it a line item in their product catalog.

NightHawkeye wrote:

WNJ wrote:Good letter, Den!

Mr. Pflueger’s response was ... largely unresponsive.

Not true!

Mr Pflueger spelled out precisely how CPAP.com can circumvent the MAP rules, a package deal mixing products from various manufacturers.

I'm waiting with baited breath for CPAP.com to introduce such a package!
Respironics APAP
F&P Humidifier
ResMed Nasal Mask
ResMed Full-face Mask
ResMed Nasal Pillows Interface

All, for an advertised price just $0.01 more than the Respironics APAP alone.

What a deal!

Regards,
Bill

I don’t share your optimism, Bill.

A “package deal” involving products from three MAP manufacturers? The manufacturers would jump on that like a dog on a bone. I predict that wouldn’t last long.

Besides, any easy deal fails the “one-on-one” test that Mr. Pflueger stipulated in his letter.

The sole purpose of MAP is to suppress Internet competition for brick-and-mortar DME’s. I’ve seen no credible evidence to the contrary.

If there are meaningful gaps in the policy, the manufacturers will close them right away. Very few people will make the calls to shop for the best “real” price. Most people want the ease and convenience of Internet price comparison and purchasing 24 X 7. This policy robs them of that.

More likely these policies will work substantially as intended for a while. My best hope is that some other manufacturers will see this as an opportunity to gain increased market share thru a bit of real competition and the big three will have to pay a price for their dogged support of the dinosaurs.

It will be interesting to see what the next few weeks brings.

Wayne