Vladeck Predicts HME Market Will Double by 2020

The chief concern among many attendees at Medtrade Spring in Las Vegas comes as no surprise.

“Getting paid and reimbursement cuts,” said Scot Silber, CEO of Green Valley Drugs Home Health and Physician Sales, Henderson, Nev.

“Reimbursement cuts,” said Gary Salazar, rehab technology specialist at Mobility Giver Inc., Huntington Beach, Calif.

But the coming 2005 cuts didn’t dampen buying activity at the industry trade show and conference, where approximately 7,000 HME providers, manufacturers and others associated with the home health care industry gathered March 16-18 at the Las Vegas Convention Center.

Exhibitors and attendees alike said the aisles were busier this year, and Medtrade producers reported a 13 percent increase in attendance from 2003 — a sign, according to some, of continued strong business in home medical equipment and services.

“Your market is going to double by 2020,” confirmed keynote speaker Bruce C. Vladeck, professor of health policy at the Mount Sinai School of Medicine in New York and former administrator of the Health Care Financing Administration, predecessor to the Centers for Medicare and Medicaid Services.

A population bubble created by baby boomers, and its potential strain on government funds, pushed the Medicare Modernization Act (MMA) to the president’s desk last year, Vladeck said. The new law includes “hundreds of new policies that I call ‘magical thinking’ … It’s good stuff, but it won’t save Medicare a nickel.”

For instance, one of MMA’s provisions provides screening tests for earlier detection of some diseases. That provision, he said, will increase the already growing life expectancy of the Medicare population, putting even more financial stress on CMS. While improving life expectancy is “a good problem to have,” he explained, it does bring to light one issue that makes Medicare unique, and why it’s so hard for the program to save money: Medicare is the only insurer that covers beneficiaries until they die.

Vladeck noted that during every one of his 1,570 days — “not that I was counting” — as HCFA administrator from 1993 to 1997, someone came up with a new way to save the agency money. None worked, he said, except the “tried and true” method of reducing payments to providers. And during last year’s debate on Medicare reform, DME was “next in the queue” for cuts, at least partially due to the perception that “[DME] providers were doing okay at existing rates,” he said.

Despite reimbursement cuts and other pressures from government, “there’s an enormous demographic engine [driving HME],” Vladeck explained. Institutional care isn’t what anybody wants, he said. They want home care. “It’s in the culture; it’s the absolute driver.”