Industry In Focus: US Home Health Care Revenues Set to Exceed $5 Billion by 2012

Article preview reprinted from Medtech Insight - July/August 2009

The US home health care market, valued at nearly $4.5 billion in 2009, is set to experience steady growth in the years ahead, driven by a burgeoning aging population, a critical need for cost-effective solutions for patients suffering from long-term chronic conditions, and the increasing use of technology to meet the needs of those receiving home-based medical care. According to Medtech Insight's recent report "US Markets for Home Health Care Products," sales revenues for the major home health care product segments are expected to reach $5.2 billion by 2012. Read more...

Industry In Focus: US Home Health Care Revenues Set to Exceed $5 Billion by 2012

Article preview reprinted from Medtech Insight - July/August 2009

The US home health care market, valued at nearly $4.5 billion in 2009, is set to experience steady growth in the years ahead, driven by a burgeoning aging population, a critical need for cost-effective solutions for patients suffering from long-term chronic conditions, and the increasing use of technology to meet the needs of those receiving home-based medical care. According to Medtech Insight's report "US Markets for Home Health Care Products," published in January 2009, sales revenues for the major home health care product segments—including respiratory therapy products, durable medical equipment, wound care products, peritoneal dialysis, infusion therapy, and enteral nutrition delivery systems—are expected to grow at a combined compound annual rate of about 4.3%, reaching $5.2 billion in 2012.

Respiratory Therapy Dominates

Respiratory therapy products account for the largest segment of this market at present and are expected to continue to dominate going forward. This segment includes mechanical ventilator systems, nebulizers, obstructive sleep apnea (OSA) therapy systems, and oxygen therapy systems, which together are expected to generate sales of nearly $1.8 billion in 2012. 

Within the respiratory segment, OSA represents the largest and fastest growing opportunity, with OSA therapy system sales expected to reach $988 million this year and nearly $1.2 billion in 2012. According to the American Sleep Apnea Association, more than 12 million people in the US suffer from sleep apnea and 10 million or more remain undiagnosed. Unlike other home health care product markets, the OSA therapy segment is benefiting from recent changes to Centers for Medicare and Medicaid Services (CMS) reimbursement policies for continuous positive airway pressure (CPAP) equipment. In March 2008, CMS announced the expansion of Medicare coverage to include OSA patients who are diagnosed using an in-home sleep test. Previously, Medicare provided CPAP coverage only for beneficiaries who were diagnosed in a sleep laboratory setting. In addition, CMS removed reimbursement requirements stipulating that patients have moderate to severe OSA with surgery as a likely treatment alternative. Along with improving Medicare coverage, the policy changes are expected to expand private insurance coverage of OSA as well.

The OSA market is unique from many other home-based medical product segments because OSA therapy accessories and supplies are generally profitable and less susceptible to pricing pressures, a fact that should help propel their continued market growth. OSA product revenues are expected to pick up even more momentum toward the end of the forecast period, beginning in 2010 or 2011, as the US economy begins to recover and the market responds to the expansion in OSA therapy caseload and demand, increases in physician and patient awareness, more favorable reimbursement conditions, and the introduction of new/improved products.

- Mary Thompson

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Companies mentioned in this article:

Cardinal Health Inc.

Covidien Ltd.

Puritan Bennett

General Electric Co.

GE Healthcare

Vital Signs Inc.

Invacare Corp.

ResMed Inc.

Royal Philips Electronics NV

Respironics Inc.

Sunrise Medical Inc.

DeVilbiss Health Care Inc.

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