by Rebecca St. Andrie

If “the best defense is a good offense,” then incoming AOPA president Brad Ruhl is the right one to be calling the plays. Many in O&P would complain about the state of the market right now, with its growing competition and declining reimbursement.

But Ruhl doesn’t see the situation that way.

“In every threat there is an opportunity,” he says. He, and others leading AOPA, feel that it’s time for a change in O&P’s game plan. Read on to find out what it is.

“Protect and defend”
Ruhl, vice president of sales for Otto Bock HealthCare, located in Minneapolis, Minn., has had a long career in O&P. He has close to 30 years of experience in sales, the last 20 being with Otto Bock. Ruhl has been a member of AOPA’s board of directors since 2004. From 1998 to 2004, he was a member of the Amputee Coalition of America (ACA) board of directors, also serving as chair of the ACA’s public policy and advocacy committee.

That much experience––both in sales and in O&P––has given Ruhl the experience needed to speak about the current state of O&P and how patient care facilities and suppliers can survive in it.

"I think reimbursement is going to continue to be constrained,” he says. “The days of significant increases in the fee schedule are unlikely to come again.” With O&P just emerging from a three-year freeze, and the small increases planned for this year, Ruhl predicts that the rate of fee schedule increases is “not even going to keep up with the rate of inflation.” Compounding the problem, he says, manufacturing costs will likely continue to rise.

The specter of slowly eroding profits can be––and has been––met in very different ways. Ruhl feels that until now, many in O&P have advocated a “protect and defend” strategy––protecting what we have today “so we don’t lose more than what we’ve already lost.”

Ruhl points out that “protect and defend” is a viable strategy. “It would be no different from a manufacturer who sees a competitive threat in the marketplace to a product that’s been copied [and works to protect its] existing market share by lowering prices. It’s more of a defensive strategy.”

However, he feels that O&P businesses may need to take a different tack. Limiting the focus to what was provided in the past, he says, is like trying to drive your car while only looking in the rearview mirror.

Ruhl suggests that O&P may need to develop new revenue streams, perhaps even exploring strategic partnerships with other health care providers.

“It can be a matter of survival for some if they choose not to change,” he says. “If their mentality is ‘protect and defend,’ ultimately they may fail.”

Orthotics vs. prosthetics: different strategies?
Ruhl adds that the fields of orthotics and prosthetics may see very different futures. For prosthetics, he sees a strong future.

“The prosthetic side of the business has certainly gotten more visible in the last six years as a result of the conflicts in the Middle East,” he says. “We’re also getting a lot of investment in new technologies, which really bodes well for our future. Patients who, in the past, would have been very satisfied with more traditional, standard products now refuse to accept anything less than these more advanced technologies. And there’s real, true patient benefit. [The higher-value, technological products] are moving toward standardization.”

As those involved in orthotics know, however, the outlook is somewhat different. “There’s no question that the market for orthotics, however broadly you want to define it, is larger than the market for prosthetics. So naturally in a larger market, there’s more competition,” says Ruhl.

Ruhl goes over familiar territory: “The truth is, today, demand is so high that there are lots of different alternative ways to dispense those kinds of products. Are you just going to be angry and mad at the change and try to stop it from happening? [Or] are you going to figure out a way to get in front of it and join it?”

Alternative models
    Ruhl feels that AOPA has a great opportunity to lead the way in showing O&P businesses how to deal with these changes. “We have to change the mix of what we’re going to provide––higher-value [products] tied to higher-quality patient outcomes. [And we have to try] to run more lean in [our] businesses,” he says.

Along with others leading AOPA, he is convinced that different business strategies will be key to O&P’s survival. And he’s committed to having AOPA show the way. “It makes sense for AOPA to provide some leadership [by] creating greater awarenes about alternative opportunities,” he says.

For instance, Ruhl talks about several different companies who very deliberately include durable medical equipment in their business. Others expand into third-party administration. Still others make the decision to ally themselves with other rehabilitation services that complement orthotics and prosthetics. Ruhl sees possible benefits in all of these ideas.

Ruhl points out, “Some right here in the Twin Cities have sold their practice to a physician’s clinic [or] an orthopedic surgeon’s clinic. [So] the surgeons have a financial interest in the prosthetic practice.”

Other businesses limit their work to high-value, high-return areas and don’t “try to be everything to everybody,” Ruhl points out. Still others expand into other rehabilitative services. For instance, Continuous Passive Motion (CPM), cryotherapy and bone stimulation are all techniques that speed healing and reduce pain after surgery. Some O&P facilities have been providing these to their patients. Rather than specialize in a single aspect of patient need, “there’s more of an approach of providing services around a continuum of care,” Ruhl says.

Ruhl acknowledges that none of these are brand-new ideas. But expanding into other product categories; aligning with other allied health care groups; expanding into rehabilitation––all of these challenge O&P’s long-held, stand-alone mentality.

Looking to join with others
Providing services along the continuum of care means thinking about all the other areas that have sometimes been seen as encroaching on O&P. Ruhl acknowledges that many have felt “we ought to go out and compete in the physicians’ [or the] therapists’ backyard a little more aggressively.”

In fact, many have suggested that AOPA recruit members among other ancillary health care providers, including physicians, occupational therapists, physical therapists, occularists and others. And that is something that will be considered during Ruhl’s tenure.

“There is strength in numbers. We know that,” says Ruhl. “Our field is relatively small. [That] forces us to be in a ‘protect and defend’ mode instead of being proactive and going out and being leaders,” he points out.
 “Traditional O&P practices and manufacturers––that’s the center of the bull’s-eye,” says Ruhl. “We want to create additional rings around it.

“The question is: how far do we want to expand the bull’s eye? That’s going to be the challenge.”

What’s next?
“The future for O&P is a bright one for those who are able to adapt to the inevitable changes,” says Ruhl.

AOPA will be proceeding carefully. There will be a survey of AOPA members about the direction the organization should take, so watch for your chance to have input. But whatever the game plan, Ruhl and AOPA will make sure members are aware of every option they have.

“Painting the picture of what could be in the future––that’s a huge benefit AOPA can bring to its membership,” says Ruhl.

Rebecca St. Andrie is managing editor of the O&P Almanac.