Invacare 2013 Annual Report Download - page 10

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system, the Company believes it will become essential that patients are given the right care, in the right place, at the right cost.
The Company believes homecare will be a key part of the solution in healthcare reform.
The Right Care: While the institutional care model likely will always be an essential part of the health care system, the
Company believes it is not the best and most cost-effective environment of care for many patients, particularly those with chronic
medical conditions. It appears that the steady growth in Medicare-aged patients with chronic illnesses is placing unprecedented
pressure on the financial stability and sustainability of the Medicare program. The Company believes that patients prefer care
and treatment provided to them in their home. Initiatives such as patient-centered medical homes and Accountable Care
Organizations can align incentives for healthcare providers to partner closely across all medical specialties and settings and have
the potential to significantly alter the trajectory of rising health care costs.
The Right Place: The Company believes that many medical professionals and patients prefer home health care over
institutional care, when appropriate, because home health care results in greater patient independence, increased patient
responsibility and improved responsiveness to treatment. An article in the New England Journal of Medicine notes that several
engineering and electronics companies have developed products for monitoring health at home and that Massachusetts General
Hospital in Boston is experimenting with Internet video-conferencing to permit virtual visits from patients' homes. Furthermore,
health care professionals, public payors and private payors appear to favor homecare as a cost-effective, clinically appropriate
alternative to facility-based care.
Technological advances have made medical equipment increasingly adaptable for use in the home. It has been estimated
that over 70 percent of non-surgical and non-emergent treatment and care could be effectively administered in the patient's home.
Current hospital procedures often allow for earlier patient discharge, thereby lengthening recuperation periods outside of the
traditional institutional setting. In addition, continuing medical advances prolong the lives of adults and children, thus increasing
the demand for home medical care equipment. Undoubtedly, as health care consumers, the baby boomer population will have
strong opinions and preferences about their treatment settings. Data from the AARP Public Policy Institute and a Harris Interactive
poll suggest that 89 percent of people aged 50 and older want to receive medical services in their home as they age and 65 percent
would prefer home care while recuperating from surgery.
The Right Cost: The Company believes that home health care and home medical equipment will play a significant role
in reducing health care costs. The Agency of Healthcare Research & Quality, along with Johns Hopkins, examined extensively
the benefits of Hospital at Home and those studies indicate that the Hospital at Home program results in lower length of stay,
costs, readmission rates and complications than traditional inpatient care. In addition, surveys indicate higher levels of patient and
family member satisfaction with homecare than with traditional care. Costs of care were 32 percent lower for Hospital at Home
patients than for hospital inpatients, and ever critical readmission rates were 42 percent for Hospital at Home patients, compared
with 87 percent for hospital inpatients.
Invacare believes that homecare is the trifecta of healthcare: it is patient preferred, has better clinical outcomes and is
more cost-effective than institutionalized care. Homecare is expected to be an area of future growth for the medical care industry,
as the unsustainable costs of institutional healthcare will force governments to move to cost-effective venues of healthcare.
Europe/Asia/Pacific Market
The Company believes that, while many of the market factors influencing demand in North America are also present in
Europe and Asia/Pacific—aging of the population, growing number of patients with chronic illnesses, as well as technological
trends—each of the markets of Europe and in Asia/Pacific has distinctive characteristics. The health care industry tends to be more
heavily socialized and, therefore, is more influenced by regulation and fiscal policy. Variations in product specifications, regulatory
approval processes, distribution requirements and reimbursement policies require the Company to tailor its approach to the local
market. Management believes that as the European markets develop more common product requirements and the Company
continues to refine its distribution channels, the Company can more effectively penetrate these markets with global product
platforms that are localized with region-specific adjustments as necessary. Likewise, the Company expects to increase its sales in
the highly fragmented Australian, New Zealand and Asian markets as these markets, and the Company’s distribution within them,
develop.
Reimbursement
The Company is directly affected by government regulation and reimbursement policies in virtually every country in which
the Company operates. In the United States, the growth of health care costs has increased at rates in excess of the rate of inflation
and as a percentage of GDP for several decades. A number of efforts to control the federal deficit have impacted reimbursement