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Facts & Figures
The perfect wave, the Holy Grail … and good statistics on the home medical equipment industry tempt the true adventurer. These elusive treasures beckon from beyond the laws of science — and they exist only in the imaginations of the few.
In the case of the HME industry, those few are the men and women who build small, thriving businesses in hometowns across the country. They don't make headlines, but they do make a living. And, in the process, they improve people's quality of life.
Without the time or money to interview every HME provider from Hoboken to Honolulu, most market researchers simply give up. Only a handful of firms — out of the hundreds that track general health care trends — are brave enough to tackle the HME industry. Those that do track this industry say traditional rules do not apply.
Knowing this, HomeCare has compiled statistics from many sources, so that our readers, the only true experts, can make sense of it all.
Size of the HME Industry: An Estimate
If $6 billion*= 42% of HME providers' revenue**, then the HME industry generates approximately $14.29 billion annually.
*Total amount that the Centers for Medicare and Medicaid Services spent on durable medical equipment, prosthetics, orthotics and supplies in 1999.
**According to the American Association for Homecare's “2001 AAHomecare Financial Survey Report,” published in August 2001. Reprinted by permission of AAHomecare. This report is based on fiscal year 2000 information provided by 100 firms of varying sizes and product lines, and does not represent industry-wide statistics. Visit www.aahomecare.org for more details.
United States Home Care Product Market, by Product Category, 2000 and 2006
| Product Category | U.S. 2000 Revenue (in millions) |
U.S. 2006 Revenue (in millions) |
|---|---|---|
| Infusion equipment | $951.71 | $1,635.11 |
| Incontinence products | $845.06 | $1,371.80 |
| Respiratory care | $712.57 | $1,092.60 |
| Wheelchairs, scooters and accessories | $484.07 | $707.91 |
| Standing aids and ambulatory aids | $388.45 | $572.88 |
| Ostomy products | $384.73 | $590.10 |
| Beds, mattresses and support surfaces | $360.09 | $644.54 |
| Wound care products | $357.10 | $493.77 |
| Blood pressure measurement and monitoring | $155.28 | $216.30 |
| Rehabilitation chairs and accessories | $148.72 | $220.57 |
| Total | $4,787.78 | $7,545.58 |
| Source: Global Industry Analysts, “Home Care Products,” March 2002 | ||
National Expenditures in 2001 for the Top 30 HME Medicare Codes
| Code | Description | Allowed Charges | Allowed Reimbursement* | Percentage of Total HME Expenditures** |
|---|---|---|---|---|
| E1390 | oxygen concentrator | $1,473,388,872 | $1,178,711,097 | 24.6% |
| A4253 | test strips | $551,520,998 | $441,216,798 | 9.2% |
| K0011 | power wheelchair | $435,607,303 | $348,485,842 | 7.3% |
| J7644 | ipratropium bromide | $419,488,507 | $335,590,805 | 7.0% |
| J7619 | albuterol | $315,620,339 | $252,496,271 | 5.3% |
| E0260 | hospital bed | $264,308,330 | $211,446,664 | 4.4% |
| E0431 | portable gaseous oxygen | $173,524,263 | $138,819,410 | 2.9% |
| B4035 | enteral feeding kit | $168,684,555 | $134,947,644 | 2.8% |
| B4150 | enteral formula I | $165,757,940 | $132,606,352 | 2.8% |
| E0277 | powered mattress | $109,097,943 | $87,278,354 | 1.8% |
| E0439 | stationary liquid oxygen | $107,324,904 | $85,859,923 | 1.8% |
| K0001 | manual wheelchair | $92,031,687 | $73,625,350 | 1.5% |
| K0533 | respiratory assist devices | $78,436,049 | $62,748,839 | 1.3% |
| K0004 | lightweight wheelchair | $74,225,425 | $59,380,340 | 1.2% |
| E0601 | CPAP | $61,512,229 | $49,209,783 | 1.0% |
| A4259 | lancets | $57,986,452 | $46,389,162 | 1.0% |
| L5300 | below knee prosthetic | $57,177,293 | $45,741,834 | 1.0% |
| B4154 | enteral formula IV | $56,725,766 | $45,380,613 | 0.9% |
| E0570 | nebulizer | $54,621,582 | $43,697,266 | 0.9% |
| E0143 | folding walker | $51,707,872 | $41,366,298 | 0.9% |
| K0003 | lightweight wheelchair | $41,939,259 | $33,551,407 | 0.7% |
| A5502 | diabetic shoe insert | $38,052,891 | $30,442,313 | 0.6% |
| E0163 | commode chair | $37,389,615 | $29,911,692 | 0.6% |
| L8030 | silicone breast prosthesis | $33,751,599 | $27,001,279 | 0.6% |
| L5667 | socket insert with mechanism | $33,308,121 | $26,646,497 | 0.6% |
| A5500 | depth-inlay diabetic shoe | $31,101,788 | $24,881,430 | 0.5% |
| E0450 | ventilator | $30,070,193 | $24,056,154 | 0.5% |
| B4197 | parenteral solution | $28,367,329 | $22,693,863 | 0.5% |
| A5123 | skin barrier (ostomy/urological) | $27,116,572 | $21,693,258 | 0.5% |
| V2203 | spectacle lens | $27,114,330 | $21,691,464 | 0.5% |
| *Reimbursement estimated as 80% of allowed charges **Percentage of total HME expenditures based on 1999 data |
||||
| Source: Centers for Medicare and Medicaid Services | ||||
In 1999, Medicare spent a total of $6 billion on durable medical equipment, prosthetics, orthotics and supplies.
As of March 2002, there were 41,551,497 U.S. citizens eligible to receive Medicare benefits.*
*The U.S. Social Security Administration provides these numbers to the Centers for Medicare and Medicaid Services.
Source: Centers for Medicare and Medicaid Services
Medicare + Choice Program: Market Penetration By State, March 2002
| State | Eligible Citizens* | M+C Enrollees | M+C Market Penetration |
|---|---|---|---|
| Alabama | 723,863 | 49,425 | 6.8% |
| Alaska | 46,988 | 150 | 0.3% |
| Arizona | 725,523 | 221,180 | 30.5% |
| California | 4,125,240 | 1,434,992 | 34.8% |
| Colorado | 496,116 | 139,589 | 28.1% |
| Connecticut | 530,412 | 32,715 | 6.2% |
| Delaware | 118,894 | 950 | 0.8% |
| District of Columbia | 77,779 | 4,721 | 6.1% |
| Florida | 2,944,997 | 589,770 | 20.0% |
| Georgia | 977,575 | 37,292 | 3.8% |
| Hawaii | 176,345 | 58,435 | 33.1% |
| Idaho | 176,528 | 15,359 | 8.7% |
| Illinois | 1,694,153 | 106,802 | 6.3% |
| Indiana | 887,871 | 24,136 | 2.7% |
| Iowa | 491,492 | 16,163 | 3.3% |
| Kansas | 401,447 | 23,143 | 5.8% |
| Kentucky | 655,855 | 20,342 | 3.1% |
| Louisiana | 633,740 | 79,295 | 12.5% |
| Maine | 227,452 | 190 | 0.08% |
| Maryland | 678,256 | 20,395 | 3.0% |
| Massachusetts | 991,467 | 216,213 | 21.8% |
| Michigan | 1,464,743 | 37,415 | 2.6% |
| Minnesota | 683,530 | 84,735 | 12.4% |
| Mississippi | 435,740 | 2,541 | 0.6% |
| Missouri | 897,936 | 125,599 | 14.0% |
| Montana | 143,861 | 260 | 0.2% |
| Nebraska | 262,169 | 9,892 | 3.8% |
| Nevada | 266,974 | 82,366 | 30.9% |
| New Hampshire | 179,353 | 1,500 | 0.8% |
| New Jersey | 1,243,709 | 110,277 | 8.9% |
| New Mexico | 249,659 | 36,370 | 14.6% |
| New York | 2,814,074 | 464,777 | 16.5% |
| North Carolina | 1,204,062 | 49,566 | 4.1% |
| North Dakota | 105,614 | 756 | 0.7% |
| Ohio | 1,760,288 | 243,835 | 13.9% |
| Oklahoma | 528,008 | 44,956 | 8.5% |
| Oregon | 515,770 | 170,114 | 33.0% |
| Pennsylvania | 2,150,393 | 500,022 | 23.3% |
| Rhode Island | 176,215 | 57,479 | 32.6% |
| South Carolina | 606,287 | 943 | 0.2% |
| South Dakota | 123,629 | 1,348 | 1.1% |
| Tennessee | 879,135 | 45,848 | 5.2% |
| Texas | 2,395,093 | 195,454 | 8.2% |
| Utah | 219,821 | 7,084 | 3.2% |
| Vermont | 93,554 | 54 | 0.06% |
| Virginia | 943,776 | 17,993 | 1.9% |
| Washington | 777,791 | 134,901 | 17.3% |
| West Virginia | 352,072 | 24,444 | 6.9% |
| Wisconsin | 816,095 | 23,609 | 2.9% |
| Wyoming | 69,118 | 1,299 | 1.9% |
| *The U.S. Social Security Administration Provides these numbers to the Centers for Medicare and Medicaid Servises. | |||
| Source: Centers For Medicare and Medicaid Services | |||
Top 10 HME Medicare Categories: Percentage of Total Expenditures in 2001*
| Oxygen and Oxygen Equipment | 30% |
| Nebulizers and Inhalation Drugs | 14% |
| Diabetic Supplies | 11% |
| Parenteral/Enteral Nutrition | 10% |
| Power Wheelchairs | 8% |
| Hospital Beds and Accessories | 7% |
| Manual Wheelchairs | 4% |
| Respiratory Assist Devices/CPAP | 3% |
| Decubitus Care (Mattresses and Pads) | 3% |
| Ostomy Supplies | 2% |
| Remaining HME Categories | 8% |
| *Percentage of total HME expenditures based on 1999 data | |
| Source: Centers for Medicare and Medicaid Services | |
National Expenditures in 2001 for the Top 10 HME Medicare Categories*
| Category | Percentage of total HME Expenditures** | Allowed Charges | Allowed Reimbursement*** |
|---|---|---|---|
| oxygen and oxygen equipment | 30% | $1,778,372,036 | $1,422,697,629 |
| nebulizers and inhalation drugs | 14% | $858,926,379 | $687,141,103 |
| diabetic supplies | 11% | $635,083,945 | $508,067,156 |
| parenteral/enteral nutrition | 10% | $576,126,425 | $460,901,140 |
| power wheelchairs | 8% | $455,600,244 | $364,480,195 |
| hospital beds and accessories | 7% | $399,147,027 | $319,317,622 |
| manual wheelchairs | 4% | $234,839,088 | $187,871,270 |
| respiratory assist devices/CPAP | 3% | $165,608,486 | $132,486,789 |
| decubitus care (mattresses and pads) | 3% | $163,412,775 | $130,730,220 |
| ostomy supplies | 2% | $110,439,398 | $88,351,518 |
| total | 92% | $5,377,555,803 | $4,302,044,642 |
| *Percentage of total HME expenditures based on 1999 data | |||
| **Rounded to the nearest percentage point | |||
| ***Reimbursement estimated as 80% of allowed charges | |||
| Source: Centers for Medicare and Medicaid Services | |||
Regional Expenditures in 2001 for Top 10 HME Medicare Codes
| Code | Description | Region A Expenditure | Region B Expenditure | Region C Expenditure | Region D Expenditure | Total |
|---|---|---|---|---|---|---|
| E1390 | oxygen concentrator | $184,173,066 | $297,919,475 | $508,629,474 | $263,292,062 | $1,254,014,077 |
| A4253 | test strips | $66,088,593 | $124,530,392 | $199,243,370 | $75,280,330 | $465,142,685 |
| K0011 | power wheelchair | $49,212,353 | $21,615,150 | $263,266,480 | $64,435,789 | $398,529,772 |
| J7644 | ipratropium bromide | $38,421,200 | $72,484,198 | $195,127,281 | $63,745,262 | $369,777,941 |
| J7619 | albuterol | $27,788,168 | $54,452,748 | $148,444,465 | $40,437,091 | $271,122,472 |
| E0260 | hospital bed | $37,804,602 | $40,091,770 | $113,113,736 | $36,611,598 | $227,621,706 |
| E0431 | portable gaseous oxygen | $22,026,318 | $35,581,289 | $59,801,066 | $31,079,550 | $148,488,223 |
| B4035 | enteral feeding kit | $33,367,462 | $29,861,190 | $67,368,601 | $27,067,070 | $157,664,323 |
| B4150 | enteral formula I | $29,043,899 | $31,787,907 | $55,960,048 | $36,559,810 | $153,351,664 |
| E0277 | powered mattress | $13,080,929 | $13,886,232 | $47,744,895 | $20,297,921 | $95,009,977 |
| Source: Centers for Medicare and Medicaid Services | ||||||
HME Providers' Sources of 2000 Revenue, by Payer Type
| Medicare | 42% |
| Medicaid | 26% |
| Private Insurance | 17% |
| Managed Care (regular payments) | 9% |
| Managed Care (capitated payments) | 1% |
| Commercial, Institutional, Open Account | 2% |
| Retail, Private, Open Account | 2% |
| Cash, Bank Cards | 1% |
| Source: American Association for Homecare, “2001 AAHomecare Financial Survey Report,” August 2001* | |
| *Reprinted by permission of the American Association for Homecare. This report is based on fiscal year 2000 information provided by 100 firms of varying sizes and product lines, and does not represent industry-wide statistics. Visit www.aahomecare.org for more details. | |
HME Providers' Sources of 2000 Revenue, by Product Category
| Respiratory Products | 53% |
| Home Infusion | 18% |
| Home Medical Equipment | 18% |
| Nursing, Therapy and Home Health Aide Services | 2% |
| Rehabilitation and Assistive Technology Products | 4% |
| Patient Support Disposables | 3% |
| All Other Products | 2% |
| Source: American Association for Homecare, “2001 AAHomecare Financial Survey Report,” August 2001* | |
| *Reprinted by permission of the American Association for Homecare. This report is based on fiscal year 2000 information provided by 100 firms of varying sizes and product lines, and does not represent industry-wide statistics. Visit www.aahomecare.org for more details. | |
HME Industry's Revenue Growth, by Business Mix, 1996 to 2000
| Business Segment | 1996 | 1997 | 1998 | 1999 | 2000 |
|---|---|---|---|---|---|
| Home Infusion |
10% | 31% | 15% | 19% | 28% |
| Respiratory |
16% | 16% | 9% | 12% | 11% |
| HME |
17% | 16% | 12% | 6% | 15% |
| Rehab |
N/A* | N/A* | N/A* | N/A* | 27% |
| Mixed-Market Firms |
10% | 12% | 10% | 10% | 13% |
| *N/A= Not available. Data not collected in previous surveys. | |||||
| Source: American Association for Homecare, “2001 AAHomecare Financial Survey Report,” August 2001* | |||||
| *Reprinted by permission of the American Association for Homecare. This report is based on fiscal year 2000 information provided by 100 firms of varying sizes and product lines, and does not represent industry-wide statistics. Visit www.aahomecare.org for more details. | |||||
Public HME-Related Companies: 2001 Financial Profiles
| Company Name | NYSE/Nasdaq Symbol | Fiscal Year-End | 2001 Net Income* | 1 Yr. Net Income Growth | 2001 Net Revenue* | 1 Yr. Net Revenue Growth | No. of Employees | 1 Yr. Employee Growth |
|---|---|---|---|---|---|---|---|---|
| Abbott Laboratories | ABT | December | $1,550 | (44.4%)** | $16,285 | 18.5% | 71,426 | 17.9% |
| Allied Healthcare | AHPI | June | $0.2 | N/A | $64.9 | 0.9% | 465 | (10.9%)** |
| American HomePatient | AHOM.OB | December | ($11.5)** | N/A | $352.6 | (3.0%)** | 3,600 | (0.1%)** |
| AmerisourceBergen | ABC | September | $125 | 26.4% | $16,191 | 39.0% | 13,700 | 270.3% |
| Apria Healthcare | AHG | December | $71.9 | 26.1% | $1,131.9 | 11.6% | 9,696 | 5.7% |
| Cardinal Health | CAH | June | $857 | 26.1% | $47,948 | 60.5% | 48,900 | 15.9% |
| CareCentric | CURA | December | ($25.4)** | N/A | $20.4 | (18.4%)** | 199 | (33.2%)** |
| Chad Therapeutics | CTU | March | ($3.0)** | N/A | $12.2 | (4.7%)** | 92 | 26.0% |
| Coram Healthcare | CRHEQ.OB | December | $1.2 | (98.8%)** | $393.6 | (15.3%)** | 2,100 | (22.2%)** |
| Gentiva Health Services | GTIV | December | $21.0 | N/A | $1,377.7 | (8.6%)** | 16,900 | (20.7%)** |
| Invacare | IVC | December | $35.2 | (41.2%)** | $1,053.6 | 4.0% | 5,400 | (3.6%)** |
| Johnson and Johnson | JNJ | December | $5,668 | 18.1% | $33,004 | 13.3% | 101,800 | 3.4% |
| Lincare Holdings | LNCR | December | $134.9 | 15.4% | $812.4 | 15.6% | 6,100 | 10.9% |
| Matria Healthcare | MATR | December | $6.7 | (51.1%)** | $264.0 | 16.9% | 1,864 | (3.7%)** |
| McKesson | MCK | March | ($48)** | N/A | $42,010 | 14.4% | 23,000 | 9.5% |
| National Home Healthcare | NHHC | July | $4.2 | 2.4% | $74.5 | 34.0% | 2,800 | 0.0% |
| Option Care | OPTN | December | $10.0 | 33.3% | $217.1 | 53.6% | 1,662 | 38.3% |
| Pediatric Services of America | PSAI | September | $5.5 | (80.8%)** | $184.1 | (1.2%)** | 4,760 | (6.4%)** |
| Praxair | PX | December | $430 | 18.5% | $5,158 | 2.3% | 24,271 | 3.6% |
| ResMed | RMD | June | $11.6 | (47.7%)** | $155.2 | 34.3%<
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