The Future Looks Bright

Today's home medical equipment providers are a hardy bunch, to say the least. Despite facing in 2002 an economy that was leveled alongside the Twin Towers and the Pentagon, and in 2003 the looming threat of national competitive bidding for durable medical equipment and an inherent-reasonableness regulation, HME providers remain optimistic about the industry.

According to HomeCare's annual Forecast Survey, HME providers continue to predict increased revenue for 2003. Of the 374 providers who responded to this year's survey, only 3 percent expect their companies' revenue to decrease, while 10 percent expect revenue to remain static, and a whopping 84 percent forecast increased revenue. Of those who predicted a revenue increase, more than one-third foresee an increase of between 6 percent and 10 percent, and another third expect an increase of between 11 percent and 20 percent. Nine percent predict a revenue increase of more than 25 percent.

Which home care markets will drive this added revenue? Count on the usual suspects: respiratory; mobility; and beds, mattresses and pads were picked as the top three markets. Of the respiratory products, oxygen concentrators and CPAP/bi-level devices are the biggest revenue producers, with liquid oxygen systems replacing sleep therapy devices at number three this year. On the mobility side, manual and power wheelchairs continue to be the biggest revenue-producing markets for HME providers.

Of course, revenue always influences providers' purchases. At the top of HomeCare's Purchase Intentions list this year are manual wheelchairs; ambulatory aids; bath safety products; beds, mattresses and pads; nebulizers; and oxygen concentrators. Look familiar? Other notable markets on the list are bariatrics products — interest in which increased by 9 percentage points, from 32 percent to 41 percent — and computer hardware and accessories, which increased 11 percentage points, from 26 percent to 37 percent. Home ventilators and sleep diagnostic products, which didn't make the list in 2002, broke into this year's top 35.

Providers Cutting Costs

Despite the additional interest in certain product markets, some providers will limit the number of products they buy, as a way to cut costs. Twenty-six percent of survey respondents say they'll buy products less frequently this year, compared to 22 percent last year.