Limping along: New Medicare bidding process slashes industry prices and profit margins

Over the past five years, the Home Medical Equipment Rentals industry has contracted, even while a growing senior population and expanded health insurance coverage have driven increased demand for its services. Since Medicare's introduction of a competitive bidding process for home medical equipment, providers have received lower prices for their rentals, cutting into profit margins from their largest market and constraining revenue overall. This program will likely continue over the next five years, and may even be expanded to Medicaid, preventing the industry from recovering the profit margins it obtained a decade ago...read more.

Industry Statistics & Market Size
Revenue
$6bn
Annual Growth 11-16
-2.2%
Forecast Growth 16-21
Profit
Employment
42,323
Businesses
7,666
Market Share of Companies
What Our Customers Say

Industry Threats & Opportunities

  • Medicare’s competitive bidding program for home medical equipment has hurt industry revenue
  • The benefits of an aging population have been mitigated by recent regulatory changes in Medicare
  • The aging population will continue to underpin demand for industry services
  • Industry Report - Industry Investment Chapter

    The Home Medical Equipment Rentals industry exhibits very high capital intensity, since the equipment industry operators rent is durable and counted as capital, not purchases. Consequently, IBISWorld estimates that for every dollar spent on labor in 2016, $0.89 will be spent on capital. Capital includes wheel chairs, oxygenators and other products that the industry rents out, as well as distribution and storage centers and inventory management equipment. Depreciation is especially high because medical equipment tends to become obsolete quickly and the rental fleet needs to be updated regularly. IBISWorld expects capital intensity to remain very high through 2021...purchase to read more.

    Additional Insights for the Home Medical Equipment Rentals Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Home Medical Equipment Rentals Industry are

  • Having an established reputation within key markets
  • Having contacts within key markets
  • Having a good technical knowledge of the product
  • IBISWorld analysts also discuss how external factors such as Number of adults aged 65 and older and Federal funding for Medicare and Medicaid in the Home Medical Equipment Rentals industry impact industry performance..

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    What is the Home Medical Equipment Rentals Industry?

    This industry rents devices that are designed to aid in the diagnosis, monitoring or treatment of medical conditions to individuals in their homes. Examples include respiratory and mobility aids such as oxygen tanks, crutches and wheelchairs. The industry also rents hospital beds for home use. Operators in this industry do not rent medical equipment or beds for use outside of homes.

    Industry Products
  • Oxygen and respiratory therapy equipment
  • Mobility aid equipment
  • Diabetic therapy equipment
  • Other medical equipment
  • Industry Activities
  • Oxygen and respiratory therapy equipment rental
  • Mobility aid equipment rental
  • Diabetic therapy equipment rental
  • Other home medical equipment rental
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Number of adults aged 65 and older
  • Federal funding for Medicare and Medicaid
  • Number of people with private health insurance
  • National unemployment rate

  • Current Performance
  • Aging population
  • New Medicare provisions
  • Shrinking profit and industry exits
  • Chart: Revenue Growth

  • Industry Outlook
  • Steady demand for home medical care
  • Competitive bidding program remains in effect
  • The industry restructures
  • Table: Home Medical Equipment Rentals Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Home Medical Equipment Rentals Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Health & Medical Insurance
  • Public Administration
  • Consumers

  • Key Selling Industries
  • Medical Instrument & Supply Manufacturing
  • Medical Supplies Wholesaling

  • Products & Services
  • Oxygen and respiratory therapy equipment
  • Mobility aid equipment
  • Diabetic therapy equipment
  • Other medical equipment
  • Chart: Home Medical Equipment Rentals Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Medicare insured individuals
  • Other insured individuals
  • Out-of-pocket individuals
  • State and local governments
  • Chart: Major Market Segmentation for the Home Medical Equipment Rentals Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Depreciation
  • Wages
  • Purchases
  • Other costs
  • Chart: Cost Structure Benchmarking – Sector vs Home Medical Equipment Rentals

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Home Medical Equipment Rentals Industry

  • Industry Globalization
    Lincare Holdings Inc
  • Table: Lincare Holdings Inc - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Home Medical Equipment Rentals Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Home Medical Equipment Rentals Industry
    Includes:
  • Industry Revenue (2007-2021)
  • Industry Gross Product (2007-2021)
  • Establishments (2007-2021)
  • Businesses (2007-2021)
  • Employment (2007-2021)
  • Wages (2007-2021)
  • Number of adults aged 65 or older (2007-2021)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Electric Scooter
  • A machine to increase and extend the range of personal mobility and help conserve energy.
  • Oxygen Concentrator
  • A stationary unit that provides a continuous flow of oxygen by filtering room air.
  • Standard Wheelchair
  • A type of wheelchair with cross-brace frame, built-in or removable arm rests, swing-away footrests, a mid- to high-level back and push handles to allow non-occupants to propel the chair.
  • Why buy this report?

    IBISWorld’s Home Medical Equipment Rentals Industry Research Report offers insight into the market at the national level. Our analysis highlights macro trends in the overall sector and the micro trends faced by companies that do business in the Home Medical Equipment Rentals industry. Our five-year outlook forecasts explain how the market is set to change and the product segments that will drive growth.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Home Medical Equipment Rentals:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Home Medical Equipment Rentals market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Home Medical Equipment Rentals, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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