The Value of HME: Providers Partnering for Reduced Costs and Improved Outcomes

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The Value of HME: Providers Partnering for Reduced Costs and Improved Outcomes


Reduced costs

Improved outcomes

The Value of HME With Tom Ryan, President and CEO, AAHomecare

Increased patient satisfaction

Throughout this guide, you’ll find the real story of the value home medical equipment (HME) providers offer to referral sources, payers, and—most importantly—patients. You’ll see the major role HME providers play in ensuring high quality care and the benefits this has throughout the healthcare continuum. Learn more about the critical role HMEs play in the healthcare continuum here

We are honored to partner with you in our mission to improve patient care. From all the HME providers throughout the country, thank you for your support.

The number of HME provider companies has been reduced by nearly 30% over the last 10 years. Learn more here.

HME providers are dedicated healthcare professionals, and they reach millions of lives each year. They are critical to ensuring people receive the equipment, supplies, and care they rely on. Yet, due to reimbursement cuts, patients have dwindling access to care as low pay has forced HMEs to close their doors.

The Healthcare Continuum

HME providers impact the lives of patients—from those who require basic equipment needs to the chronically ill, pediatric, and the elderly. Without the essential HME products and services they need to stay home, patients may be hospitalized or go into a nursing home—driving up healthcare costs. HME providers are essential to the healthcare continuum.

Brought to You by AAHomecare

AAHomecare is dedicated to serving its members and being strong advocates for the HME industry. To ensure that the HME industry’s work in communities across America is understood and appreciated, we are building a library of resources to help the HME community share the value of HME.

Patient Hospital (Acute Setting)
Outpatient Treatment Pharmacy Skilled Nursing Facility Long-Term
Equipment Provider Home
Physician's Office

Equipment and supplies are essential, but only if they are used and maintained properly.

“The U.S. health system will need to rely even more on proven, evidencebased home and community programs to help improve outcomes, reduce use of emergency departments, and control costs.”

HMEs Provide Care Beyond Products

Equipment and supplies are essential, but only if they are used and maintained properly. HME providers are a critical component to receiving healthcare in the home. They help patients and caregivers with services including:

• Product selection

• Setup

• Proper use

• Remote monitoring

• Troubleshooting

• Ongoing support

• On-call services

These services are a large part of providers’ overall costs and must be recognized and considered by managed care payers in reimbursement determinations.

The Cost of Care

Products and supplies are only a portion of the services HME providers deliver to their patients.

• The cost of these goods makes up just 58% of the overall cost of provision

• The other 42% includes:

• Clinical services

• Follow-up visits

• Equipment setups

Read more in this study

The Patient Perspective

The Growing Need for HME

The Commonwealth Fund’s 20th International Health Policy survey compared health experiences of older adults in 11 countries. When it came to critical metrics such as access, affordability, and timeliness of care, the U.S. ranked at or near the bottom. The takeaway? The U.S. needs a stronger social safety net to improve health outcomes and decrease spending. This is possible by leveraging HME provider partners to increase access to cost-effective, patient-centric, homebased care.


Why It Matters

The home is the least costly care setting.

HME Reduces Costs

The home is the least costly care setting. A stay in the hospital has an average daily cost of $6,200. Meanwhile, HME providers offer some of the most affordable care across the healthcare continuum.

Rethinking the Budget

Private payer reimbursement for HME products and services has remained relatively flat, despite the opportunities it holds for reducing costs.1

• From 2018 to 2019, DME spending increased by just 1.2%. Meanwhile, spending increased by 6.6% for hospital care and 11.3% for home health.

• Increasing reimbursement will keep patients at home, lowering hospital and overall healthcare costs.

• HME is critical to providing care in the home and more affordable than hospital stays, but accounts for only 1.04% of the private health insurance expenditure.

Where HME Providers Can Help

• COPD – The fifth leading cause of death in North America, estimated to cost $49 billion annually in 2020.

• Falls – Each year, about $50 billion is spent on medical costs related to nonfatal fall injuries and $754 million is spent related to fatal falls.

• Sleep Apnea – Union Pacific Railroad Employees Health System realizes annual savings of $2,400 per member with sleep-disordered breathing treated with CPAP. Longterm savings could be much higher if the effect of comorbidities such as diabetes was lessened.

• Pressure Ulcers – This condition costs $9.1 to $11.6 billion per year in the U.S., and the cost of individual care ranges from $20,900 to $151,700 per pressure ulcer.

1Source: National Health Spending Explorer

Durable Medical Equipment Home Health Hospitals $0 $10 $20 $300 $400 $500 $11.99 $12.13 $14.40 $16.03 $407.93 $434.67 2018 2019 HEALTH EXPENDITURES 2018–2019 On Durable Medical Equipment, Home Health, Hospitals by Private Health Insurance (U.S. $ Billions) U.S. $ Billions 7

HME providers reach millions of lives each year.


HME Improves Outcomes

HME providers reach millions of lives each year. As they continue to adopt telehealth technologies to improve care, those numbers will only grow. This has made HME providers an extension of case management and coordination teams—not because of the equipment, but because of how frequently they interact with the patient. HME providers have proven to be an asset to in-person and remote monitoring, and can help identify when intervention is necessary.

Frequent Monitoring

HME providers are a critical point of contact for monitoring and compliance.

• They are in constant conversation with patients.

• They work to ensure their comfort.

• They educate on proper use of their equipment and supplies.

• They identify and report issues to treating practitioners.

This helps keep the patient compliant and out of the hospital.

Key Role in Value-Based Care

HME providers play an integral role in the value-based care model and will continue to emerge as leaders and valuable partners. Quality care and patient outcomes have always been a hallmark of the HME community.

Better Compliance

When patients can receive their treatment or therapy in their own home, it’s more likely they will actually use it. Without it, they would have to travel to a remote location. Additionally, people tend to be more comfortable in the home, as opposed to a hospital or other medical facility.

Better Outcomes, Lower Costs

Better support for patients at home creates more bed capacity for acute needs. This was essential during the COVID-19 pandemic—HME providers stepped up to alleviate the burden facing our nation’s hospitals and provide care under tough conditions. That work continues today, as they help reduce readmissions and keep patients out of high-cost acute care settings.

Source: AARP

77% of adults 50 and older want to remain in their homes for the long term—a number that has been consistent for more than a decade.


are at the center of everything HME providers do.

HME Increases Patient Satisfaction

Patients are at the center of everything HME providers do. They are an integral part of the value-based care model and play a strong role in clinical outcomes. HME providers want to partner with payers on these discussions. This is the best way to realize reduced costs and improved outcomes, as well as happier patients.

Keeping People Happy and Healthy in Their Home

94% of Medicare beneficiaries prefer to receive care in the home instead of a skilled nursing facility. HME providers help people where they are—and where they want to be—the home.

• HME providers offer ongoing support after providing equipment and supplies.

• HME providers guide and educate patients and caregivers.

• HME providers are true partners in the plan of care.

The Patient Perspective

Convenience and Comfort

People tend to value both convenience and comfort. Most HME is delivered directly to the individual’s home with individualized instruction and support available 24/7 from their HME provider. Patients are motivated to use their prescribed products and equipment so they can remain at home.

Let’s Talk Contact us for more information on how AAHomecare can partner with payers to reduce costs and improve care. AAHomecare 1400 Crystal Drive Suite 460 Arlington, VA 22202
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