Oxygen Concentrator Outlook
Industry Insights
SUMMARY
The oxygen concentrator industry is entering a pivotal phase in 2025. While historical Medicare data shows a decline in traditional fee-for-service (FFS) oxygen utilization, broader market dynamics tell a more nuanced story. The shift toward Medicare Advantage, the rise of home-based care, and technological innovation are reshaping the landscape. This report synthesizes historical trends, market forecasts, and emerging drivers to provide a strategic outlook for the year ahead.
HISTORICAL UTILIZATION TRENDS (2014–2022)
Over the past eight years, the number of FFS Medicare beneficiaries using home oxygen has declined from approximately 1.28 million in 2014 to just under 936,000 in 2022—a reduction of more than 340,000 individuals. This trend reflects a combination of factors such as improved disease management, policy shifts, and a growing migration of beneficiaries from traditional Medicare to Medicare Advantage plans.
The percentage of FFS beneficiaries utilizing oxygen also declined, from 3.44% in 2014 to 2.66% in 2022. Notably, there was a temporary increase in 2020 and 2021, likely attributable to the COVID-19 pandemic, which underscored the critical role of oxygen therapy in acute respiratory care.
MARKET SIZE AND GROWTH FORECAST
The oxygen concentrator market is expected to grow at a compound annual growth rate of 5.54% through 2035.
This growth is not uniform across all segments. Portable oxygen concentrators (POCs) continue to lead the market, accounting for an estimated 55% of total revenue. Their dominance is driven by patient preference for mobility, convenience, and independence—factors that align with broader trends in consumer-centered healthcare.
KEY MARKET DRIVERS
Several macro and micro-level forces are shaping the oxygen concentrator industry in 2025:
• Demographic Shifts: The aging U.S. population, particularly those over 65, continues to drive demand for chronic respiratory care solutions.
• Home Healthcare Expansion: Patients and providers alike are increasingly favoring homebased care models, which are more cost-effective and often yield better outcomes.
• Technological Advancements: Innovations in device design—lighter, quieter, and more energyefficient concentrators—are enhancing patient adherence and satisfaction.
• Post-Pandemic Awareness: The COVID-19 pandemic has left a lasting impact on public and institutional awareness of respiratory health, reinforcing the importance of scalable oxygen delivery infrastructure.
TECHNOLOGY TRENDS
The technological evolution of oxygen concentrators is accelerating. In 2025, we are seeing a clear shift toward smart-enabled devices that integrate with mobile apps and remote monitoring platforms. These features not only improve patient engagement but also enable providers to track adherence and intervene proactively.
Battery life and portability remain key differentiators. Newer models offer extended battery performance and even solar-powered options, catering to both domestic and international markets where power reliability may be a concern.
Dual-flow systems—capable of switching between pulse and continuous flow—are also gaining traction, offering flexibility for patients with varying oxygen needs throughout the day.
REGULATORY AND REIMBURSEMENT LANDSCAPE
The regulatory environment continues to evolve. CMS reimbursement policies and competitive bidding programs have historically influenced provider behavior and patient access. While these policies have introduced cost efficiencies, they have also created challenges for smaller suppliers and may impact innovation cycles.
The ongoing shift from FFS to Medicare Advantage adds another layer of complexity. While utilization data becomes harder to track, the stability and predictability of MA plan structures may offer new opportunities for device manufacturers and service providers.
CHALLENGES AND RISKS
Despite the positive outlook, several headwinds remain:
• Affordability: High upfront costs for advanced POCs can be a barrier, particularly for underinsured populations.
• Supply Chain Volatility: Global disruptions in electronics and medical device components continue to pose risks to production and distribution.
• Regulatory Uncertainty: Changes in FDA classification or CMS reimbursement structures could impact market dynamics unexpectedly.
KEY TAKEAWAYS
The oxygen concentrator industry in 2025 is characterized by cautious optimism. Growth is expected to be modest—between 2% and 4%—but steady. The most successful organizations will be those that invest in innovation, align with homecare delivery models, and adapt to the evolving reimbursement landscape. As healthcare continues its shift toward patient-centered, home-based models, oxygen therapy will remain a cornerstone of chronic care management.
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
