Time to go medical?

As baby boomers turn 60 this year, alarm companies are seeing an increase in requests for medical alert systems. Some dealers and central stations have been a part of the medical alert monitoring or personal emergency response (PERS) market since its start, while others have recently migrated to the market. However, as the need for home medical care grows, industry members say, the time is here for security dealers to offer two-way medical monitoring service, and for central stations to monitor the service. Just listen to Christopher Baskin, whose American Two-Way of North Hollywood, Calif., has been part of the market from the get go: "Dealers really need to look at this market, and realize how profitable and great of a market it is." The two-way voice product is a unit with an audio device added to an alarm or emergency response system using a speaker and microphone. This enables a dispatcher to hear what's going on at the location when the alarm goes off, and communicate with the client. At the same monthly monitoring rate as an installed alarm, a dealer can mail the client a medial unit or have the central station mail it to the client, Baskin said. The unit has three parts: a small transmitter, which is a button carried or worn by the user, the PERS device that is plugged into the phone and the central that monitors the calls, which makes for a simple install. "When you no longer need an outside sales force and outside installation department, yet you receive the same monthly monitoring rate, profits soar though the ceiling," Baskin said. A word of caution: Those interviewed by Security Systems News whose foothold is in the medical market space said it is a fast booming market: "There are many central stations looking at it and trying to jump in." But, Baskin advised, "They should really have their ducks in a row before they do." Peter Giacalone, executive vice president of SafetyCare, has also established a footprint in the market. In addition to services offered by central stations, such as monitoring of fire and burglar systems, SafetyCare's facility provides medical monitoring, crisis intervention and wellness counseling to customers. These services include around-the-clock access to certified health care professionals who are qualified to discuss situations that range from addictive behaviors to family crisis However, those interviewed by Security Systems News agree the handling of medical alarm monitoring accounts and traditional dispatching is not the same. In the medical world, there is much more communication with the end user. Some central stations such as Perys, the medical division of Amcest Corp. of Roselle, N.J., enable dealers to offer a professional multi-language reassurance call program. Perys clients are called on a daily, weekly or monthly basis to test their PERS system or are contacted for some needed social interaction. A central station also needs to be confident in two-way voice, meaning "when the signal comes in, the center does not park the signal, it goes live with two-way voice immediately," Baskin said. "So first the central station must have the technology and enough operators so when the signal comes in it truly comes up live." Giacalone agreed: In this business it is imperative operators are professionally trained in medical dispatching. Jim Osborne, president at American Response Center in Euclid, Ohio, agreed that the market for medical monitoring is two-way, which works the best for elderly or disabled subscribers. "We are finding that more medical alert systems are now being used as medical assistance alarms. Instead of calling rescue, we are calling contacts first and only calling rescue if no one else can be reached." The dealer experience Central stations that offer PERS have developed solutions that help independent security and home health care dealers reach goals in the marketplace. With that in mind, central stations and dealers are marketing services in various traditional and non-traditional methods. For example, some central station programs help dealers who might be uncertain about how to sell the service and which outlets to tackle when transitioning into medical monitoring. Baskin's company has designed a turnkey program for dealers to get into the market. Dealers receive the medical unit itself or the company directly ships it to the end user, already pre-programmed. The central can bill the end user for the dealer, and also provide the telephone installation for their customer. "We do that all under the dealer's own company. So when dealers are up against larger competitors in the market such as Lifeline, we make it very easy for the security dealer to get into the market," Baskin said. Despite this variety of medical monitoring services, the marketing approach is similar to signing on alarm users. A dealer takes the same steps to add clients. "You will have clients as long as you are running it properly, as this service takes less infrastructure to offer, plus the biggest thing is that these guys have customers in the burglar industry and families and soliciting them is easier because you already have a relationship with them," Giacalone said. There are also non-traditional approaches, which cuts to the target market for this service. Dale Gee, owner of Southern California Burglar Alarm of Las Angeles, is a dealer who provides medical alarm monitoring in a burglar panel. He communicates with local divisions of associations such as AARP and senior citizen groups to reach out to demographics that might add the service. Despite education efforts made by central stations, however, and the increased need for medical monitoring, there are still many questions that dealers feel need to be answered before they invest in the market. Gee's full service alarm company that contracts out its monitoring service currently offers a medical alarm button that is part of a burglar alarm system, but would like to extend its offerings to medical-only alarm systems. But, like other alarm companies, Gee is hesitant to offer medical-only alarms because of the liability issues. Gee said his insurance carrier advised him to not take on the medical-only alarms because there is too much liability. "We hear that a lot," Baskin said. He noted that there is no difference between the two services as far as liability. "It is all life safety whether you are monitoring a smoke detector or protecting someone from a hold-up situation. Dealers should not be concerned about the extra Liability; if they are already in the security industry they have this liability anyway." However, Carl Tannenbaum, an attorney for the alarm industry and managing partner at Tannenbaum & Chanin, said insurance companies have identified PERS as a high-risk segment of the industry. Baskin added that some insurance companies do dictate what a dealer can offer, but "more and more are realizing that life safety is life safety. We are seeing that those that underwrite for security will underwrite for medial alert monitoring." Tannenbaum said the problem for an alarm dealer is that "most dealers are not pure-play PERS dealers. Most of them are performing services in other categories and now they want to get into PERS, it is a only a very a tiny portion of their business." Because of this, the dealer would have to purchase an additional insurance policy and from a business perspective it might make it financically unattractive, he added. About 15 percent of Gee's account base is medical, but he said that could certainly increase and projects his company could install at least 15 to 20 systems a month. "We do get a number of calls, from citizens asking if we offer medical alarms. In most cases these are people that live by themselves; they are home all day. They really don't need a burglar alarm. They just want a medical alarm. We almost always have to turn them away," Gee said. To curb the issue, Gee said all of his burglar alarm systems that have a medical alarm button also utilize a digital communicator as well as a backup device such as long-range radio. Gee imagines that other alarm companies are in the same boat. "Here in LA, if you open the yellow pages under medical alarms, you do not see any alarm companies listed there," he added. Gee, on other hand, said his company is ready to take advantage of the untapped market. Like those for any life safety industry, insurance premiums will have a significant cost attached to them, noted those that were interviewed. Osborne, of American Response Center, in 2004 took out a premium Errors and Omissions policy that included coverage of medical alert systems and said it was four times "my normal insurance for me to add medical, and to get medical I had to pay the premium price on all systems." Insurance in the industry is all based upon your income, noted Giacalone. Although dealers fear that their insurance might skyrocket as liability issues increase when offering a medical service, he said, "Your insurance rates go up if you are sustaining income." Dealers are afraid they won't make a profit, he added. This is more than just an insurance issue. The typical life span for a medical account on average is two years. And a patchy account base often leaves dealers with a high attrition rate. "Some companies want to push this plug and play to their dealer, but what they aren't telling them is that this is a huge attrition increase," said Blane Comeaux, vice president of monitoring services for Acadian Ambulance Service. Baskin recommends for dealers that the product be UL-Home Health Care approved. "Most likely it's a good product, as long as they use that product with a good center they should have no problem," he said. He added that there are competent central stations that offer the service. "When [dealers] choose one of those, it is not too much for a dealer to learn." Telemedicine Telemedicine--the use of medical information exchanged from one site to another using audio, data transmission or video--includes remote patient monitoring such as applications that monitor vital signs or even blood glucose. As more central stations offer medical monitoring two-way, they need to understand the potential revenue of the additional telemedicine market; their clients, the health care institutions, are certainly entering it at a rapid pace thanks to the aging baby boomers. For Comeaux of Acadian Ambulance Service, it is an appealing market that the company plans to enter in the next year: "It is going to be a sizable market, we have our feelers out." Currently, Acadian is experimenting with motion detection equipment that monitors activity such as how many times a client gets out of bed, how many times they go the kitchen. Comeaux said his company, like others that provide medical alert systems, has to be on the cutting edge, "because we are associated with home health agencies. We want to make sure that when home health market is ready to move on some of these things, we can offer it." SafetyCare's Giacalone said telemedicine is a growing need. "The [health care] infrastructure here in the U.S. will not be able to handle all the people that need medical care because too many people are aging," he said. Remote monitoring could be part of the solution. Already companies such as American Two Way provide pill dispensing, blood pressure and blood oxygen monitoring remotely to clients. Although the transition for the independent dealer to jump into the telemedicine market might be trickier to get into because it is governed by hospitals and hospice markets, Baskin said the first move into the market would be to offer the medical alert two-way and push button unit, which is known as the "help I've fallen and I can't get up" technology. Over the past few years, the industry has migrated from intrusion alarms with integrated audio to standalone PERS units. Some central stations and dealers are turning this market into part of their solution while others are on the verge. For these individuals the move makes sense, as the life safety industry protects and secures people and property; the everyday value of PERS and telemedicine saves lives and regains independence daily.