Source Challenges
Industry Insights
INTRODUCTION
In 2025, the healthcare continuum faces significant challenges, including improving access to care, addressing staffing shortages due to an aging workforce, and adapting to consumer preferences for convenience and accessibility. Medicare Advantage complexities, such as growing enrollment and issues with prior authorizations and reimbursement rates, add to the strain.
DME providers play a crucial role by enhancing patient outcomes, helping reduce readmissions, and aligning with consumer preferences. By leveraging data analytics, ensuring timely delivery, and fostering strong healthcare provider partnerships, DME providers can contribute significantly to tackling these challenges and supporting the sustainability and effectiveness of healthcare delivery.1
IMPROVING ACCESS TO CARE:2
DME Solutions:
Implement Telehealth Services: Allowing patients to receive consults and follow-up appointments without traveling.
Home Delivery and Setup: Offering home delivery and setup of medical equipment will ensure patients receive the necessary tools without having to worry about transportation issues.
Patient Education: Ensuring patients are receiving the proper education on how to use the medical equipment. This will lead to better outcomes and help to reduce hospital readmissions.
ADDRESSING STAFFING SHORTAGES:3
Strengthen Healthcare Provider Partnerships: Collaborate with hospitals, clinics, and other providers to streamline processes. Develop key performance indicators that help ensure effective performance and show the value of DME providers. Insurance Navigation Assistance: Assist patients through the process of navigating their insurance coverage by providing preauthorization assistance, claims management, cost estimations, and generalized education.
The healthcare workforce is aging, with a projected shortage of 187,130 fulltime equivalent (FTE) physicians by 2037. Non-metro areas are expected to experience greater shortages than metro areas. The average age of registered nurses (RNs) is 43.4 years, and less than 17% of active physicians are under 40 years old. This aging workforce, combined with increased contract labor expenses and high patient-to-nurse ratios, leads to staff burnout and increased operational costs. Addressing these shortages requires innovative staffing solutions and support for healthcare workers.
Less than 17% of active physicians are under 40 years old.
17 %
1
SHIFTING CONSUMER PREFERENCES:4
Consumers Value Accessibility Including:
• Affordability, location, and convenience
• Insurance coverage drives where patients go for care
• Consumers value proximity
• Wait times drastically drive decisions for where to seek care
Convenience Clinics
• Consumers are making stops to restaurants, grocery stores, and pharmacies when going to primary care doctor
• Younger consumers are receptive to alternative care sites
• Walk-in or same-day access to services
MEDICARE ADVANTAGE:
Telehealth Utilization
• Data suggests telehealth options are not expanding significantly but utilization will be driven by those that are repeat users
• Patients need to know there will be smooth coordination from telehealth to in-person care when deemed necessary
• Receiving feedback on consumer experience is critical
Enhanced Communication
• Maintaining a positive patient experience is crucial for customer loyalty
• Communicate wait times and increase transparency
• More than half (54%) of eligible Medicare beneficiaries are enrolled in Medicare Advantage in 2024.
• Medicare Advantage enrollment is highly concentrated among a small number of firms, with UnitedHealthcare and Humana accounting for nearly half (47%) of all Medicare Advantage enrollees nationwide.
• Medicare Advantage can present challenges with prior authorizations and lower reimbursement rates than traditional Medicare.5
• 35.7M people are projected to enroll in Medicare Advantage in 2025 with enrollment projected to continue increasing.
• 97% of Medicare Advantage plans offer additional telehealth benefits. This is up from 83% in 2024.6
More than half (54%) of eligible Medicare beneficiaries are enrolled in Medicare Advantage in 2024.
54 %
35.7M people are projected to enroll in Medicare Advantage in 2025 with enrollment projected to continue increasing.
35.7 M
FINANCIAL PRESSURES:
• Hospitals continue to experience increased costs related to supplies and drug expenses. Rising costs and battling inflationary pressures remain challenging for the healthcare industry.
• Labor costs continue to place financial burden on healthcare organizations.
• Reduced access to capital due to tight liquidity and organizations facing higher levels of debt continues to impact financial stability.7
• Length of stay and timely discharges
» Reducing hospital length of stay helps hospitals save on operational costs like staffing, equipment, supplies. etc.
» Efficiencies gained from length of stay initiatives impact hospital financial performance.
THE DME VALUE PROPOSITION TO REFERRAL SOURCES THAT ARE TACKLING THESE HEALTHCARE CHALLENGES TODAY…
Improving Patient Outcomes: Providing high quality equipment that enhances patient care and recovery, DME providers can help referral sources achieve better patient outcomes. In a value-based care world, this is crucial as rembursement is tied to quality of care.
Reducing Readmissions: Effective use of DME can help reduce hospital readmissions by making sure patients have the necessary equipment to manage conditions in the home. This helps avoid hospital readmission penalties.
Leveraging Data and Analytics: Data on equipment usage and patient outcomes helps demonstrate the role DME providers can play in improving patient outcomes and reducing costs.
Helping Meet Consumer Preferences: Cost containment strategies align with keeping patients out of the hospital, receiving needed care in the home through DME providers and other alternatives like hospital at home programs. Meeting consumer preferences will inherently boost patient satisfaction, which is an important measure in value-based care.
Timeliness of Delivery: Improving this can help reduce length of stay for hospitals and showcase the value a DME provider can play in care coordination.
In conclusion, as the healthcare industry navigates the complexities of 2025, DME providers will be essential in supporting the sustainability and effectiveness of healthcare delivery. By addressing key challenges and leveraging their unique capabilities, DME providers can make a significant impact on the future of healthcare.
VGM Industry Insights provides data-driven analysis and trends within the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) sector. Our focus areas include market trends, innovation, and strategic decision-making, helping stakeholders stay informed and competitive. We are committed to a forward-thinking approach, continuously monitoring industry developments to drive progress and innovation.
ALAN MORRIS SVP of Strategy
TYLER COULANDER Market Strategy Manager
