HME Business

Rumor control seems to be the order of the day in the HME industry. Case in point: Inogen's online sales efforts. When the portable oxygen concentrator maker began selling its wares directly to customers at the start of this year, it began dealing with what Inogen senior vice president of sales and marketing Scott Wilkinson describes as "a lot of incorrect assumptions."

Namely that it is taking business away from HME providers. Wilkinson says that Inogen is in fact only selling the units via retail (i.e., cash sales) to patients it cannot refer to other providers.

"We only sell for cash ... we don't take any reimbursement from any insurance," he says. "We don't take Medicare. Nothing like that. We're not a homecare provider; we're a manufacturer."

When Inogen launched its product in the U.S. market approximately three years ago the units were sold to providers primarily for reimbursement -- either via Medicare or some other insurance.

"Suddenly, a cash market has emerged for these units -- and all the POCs," Wilkinson says. "In fact, since we launched this product patients have banged on our door asking 'Where can we can we get one?' 'Can I just buy a unit from you?' They kind of shoved money under our nose for three years."

For those three years, Inogen opted to pair those inquiries with providers that were close to them geographically. However, Inogen encountered some obstacles with that policy. Namely, some of those providers steered those patients to other POC brands, or the patient was cash-only and those providers were not set up to transact retails sales.

"Emerging over time, there are more providers who are understanding how to take someone's credit card or check, but a lot of providers still don't think 'that way,'" he said. "We were sending patients out and they hit a brick wall. So we said, 'if someone wants to buy from us, then we are going to take care of them.'"

Another issue, says Inogen CEO Ray Huggenberger, who camed to Inogen from Sunrise earlier this year, is that in many cases Inogen turned patients to a provider and the sale wound up with an Internet retailer.

"That in itself wouldn't be the worst thing in the world, but frankly the Internet retailers are a little bit of a 'problem child,'" he says. "Some of them are good. They are the ones who are specialized in this market, and they know what they are doing.

"But there were a couple incidents where we came to find out the hard way that an Internet retailer was selling patients product that wasn't right for the patient," Huggenberger continues. "They should never have been put on an Inogen One — they should have been put on a continuous flow unit. The retailer just didn't know what they were doing. We needed to stop that."

So, Inogen started its direct sales efforts to ensure that the cash business untapped by providers is "done right," he says. Especially considering that by law oxygen is a drug. So, Inogen's direct sales process ensures it addresses key considerations, such as confirming and double-checking prescriptions, and consulting with doctors to ensure the patient is getting what he or she needs.

Moreover, 95 percent of the leads Inogen gets from its pervasive TV and radio advertising wind up being referred to HME providers, Huggenberger says.

"We give them the leads and the tools to the convert the patients as long as they carry the Inogen line," He says. "We're not competing with the providers. We are doing what we're supposed to, which is creating demand for our products."