Sneak peek of the State of the Industry Report

There are signs in our upcoming State of the Industry Report (keep an eye out for it in December) that the HME industry may be beginning to settle down after a few roller coaster years. 2011 through 2014 were mostly unkind to the industry, thanks to a Medicare competitive bidding program that has delivered round after round of cuts.

But in 2015, when we look at DME growth by product category, we see slight increases across categories, with the exception of hospital beds. For the wheelchair category, for example, Medicare expenditures were $625 million in 2015 vs. $615 million in 2014. For oxygen and supplies, they were $1.5 billion vs. $1.4 billion.

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There's another section in this report that screams, “We've settled down”: the list of top providers in 2015. For the first time in as long as I can remember, the list is a carbon copy of the previous year's list, at least when it comes to the top 10. See below for the list for 2014, followed by the list for 2015.

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What's more, all the providers in the top 10 saw increases in allowed charges from 2014 to 2015, with the exception of Walgreens. The biggest increase in allowed charges went to Zoll Services, at 25.7%. After that, Lincare saw a 16% increase in allowed charges, followed by Lincare Pharmacy Services at 12.4% and Apria Healthcare at 10.7%.

What do these nationals have to thank for their increases in business? Possibly the same competitive bidding program that's causing so much damage to the rest of the industry. If anyone can make it work, it's the nationals, which can leverage economies of scale.

When we dive into utilization by product, though, it's still a roller coaster, as it has been in previous years. We're seeing high highs, as with non-invasive vents, which saw an 86.95% increase in utilization in 2015 compared to 2014; and low lows, as with TENS devices, which saw a 35.89% decrease over the same time period.

Of course, after all this, it's possible 2015 represents only a brief reprieve. In 2016, Medicare rolled out bid-related pricing nationwide to non-bid areas and that's likely to significantly impact the data for next year's report.

While we're on the topic of data, I need to let you know, with my tail between my legs, that I've updated a blog that I wrote awhile back titled “Calm before the storm.” It turns out that adding percentage changes for two time periods doesn't equal the total percentage change across those two time periods—sorry, I'm a writer for a reason. Thank you Steve Stickney for being such a stickler and pointing this out, and pointing it out so kindly.