December 2012

Townsend: Custom service for the off-the-shelf price

By Larry Hand

At Townsend Design, an orthotics products manufacturer in Bakersfield, CA, even off-the-shelf (OTS) products can become custom configured, and at no additional charge.

When a practitioner sends Townsend an order for an OTS knee brace, for example, the leg measurements for that patient might not exactly match standard-size devices, so the Townsend fabrication technician may choose a tibia band from a medium brace and a thigh band from a large brace to form the complete unit to ship.

“We don’t charge more. It’s just one of the value-added services that we do,” said Rick Riley, Townsend’s chief executive officer.

“We recognize that, in today’s economy, it’s not easy sometimes to get authorization for a custom brace from an insurance company. We call it cus­tomized. We don’t bill it as a custom brace, we still bill it as an off-the-shelf brace, but the reality is, it is definitely custom configured for that patient,” he said.

Pulling from different regular-size braces to fill specific patient measures allows practitioners to achieve a very good, intimate fit with an off-the-shelf brace, because it’s not made with the exact same size tibia shell and thigh shell, Riley added.

The service can have a direct impact on holding down healthcare costs for patients. For instance, if a patient has a copay of 25%, according to Riley, he or she would be paying $200 on the off-the-shelf product that goes for $800. But if the patient has to be prescribed a custom brace costing $1200, the copay would rise to $300.

Most of Townsend’s business is composed of manufacturing custom O&P products and selling through practitioners.

Founded in 1984 by Jeff Townsend, CO, an orthotist who developed and patented the technology for the company, Townsend Design was acquired in January 2011 by Thuasne (pronounced “two-ann”) North America, a subsidiary of the French company Thuasne Group, a prominent European O&P manu­facturer. Townsend has 145 employees and operates in a 50,000-square-foot facility.

The fit between Townsend and Thuasne is a good one, said Riley.

“They are strong in Europe, we are very strong in the United States, and we do only about ten percent of our business outside the US. The nice thing is they needed all of our sales force, and all of our products, and all of our people,” he said. “We’re two years into this relationship and not one person has lost their job. In my position as a CEO, that is a very gratifying situation.”

Townsend operates primarily in four product groups: osteoarthritis knee braces, ligament bracing, specialty braces, and rehabilitation devices. Known widely for its rigid knee braces, about 65% of Townsend’s US revenue still comes from knee bracing, Riley said.

“We have a very specialized range of products. We probably have more than ninety percent of revenues from 20 products. We don’t strive to be all things to all people, but what we do, we do very well,”he said.

One of the things that sets Townsend apart from some other companies, Riley said, is that the company fills orders for highly complex patients, including specialty braces for morbidly obese patients or for deformities related to polio or other conditions. These patients might not comprise a big-enough market for some companies to service, but Townsend considers their specialized needs as a part of standard practice.

Townsend is always open to innovative new products, Riley said, but “you almost have to develop products that fit the existing billing codes. Trying to get new codes established in today’s environ­ment is sometimes very difficult.”

Most of Townsend’s customers are orthotists. “We have always married ourselves to the O&P community in terms of products and business philosophy. We’re very aligned to the needs and interests of the O&P community,” he said, noting the company does have some physician and orthopedic surgeon customers.

Townsend has always avoided getting into the business of billing insurance companies.

“We feel it’s difficult to be both a supplier and a competitor to customers,” Riley said.

That’s something that still holds true in spite of the recent acquisition and the recent economic trends, he said.

“That philosophical difference for Townsend is something that’s been in place for years and isn’t subject to change,” Riley said. “We want to be a supplier and we don’t want to be a competitor.”

Larry Hand is a writer in Massachusetts.

Article sponsored by Townsend Design.

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