Volume 4 Issue 22, October 24, 2017
The rapidly evolving DME/HME market continues to grow in volume despite significant downward pressure from insurers. This market has experienced significant consolidation in recent years, in part as a result of fee schedule changes introduced by the Centers for Medicare & Medicaid Services (CMS). Further cuts in Medicaid and private insurance reimbursements are expected in 2018 as the DMEPOS Competitive Bidding Program continues to play a significant role nationwide. This has led to continued market uncertainty. It has also meant that many so-called “Mom and Pop” companies have been squeezed out as greater economies of scale are increasingly needed for DME/HME providers to be profitable.
Some of the most significant trends include:
Despite the pending risks associated with reimbursement changes, we feel that DME/HME acquisition presents a good value at the present time. We are of the opinion that market multiples have reached a bottom point and will begin to rise within the next five years. Additionally, demand for the baby boomers, a fragmented market, and reduced providers in the market all lead to a favorable outcome in the long term for providers.
For over 20 years, Brad has held a number of significant executive positions including founding Lone Star Scooters, which offered medical equipment and franchise opportunities across the country, Lone Star Bio Medical, a diversified DME, pharmacy, health IT, and home health care company, and BMS Consulting, where he has provided strategic analysis and M+A intermediary services to executives in the healthcare industry. In addition, he is a regular columnist for HomeCare magazine and HME News, where he focuses on healthcare marketplace trends and innovative business strategies for the principals of healthcare companies. At VERTESS, Brad is a Managing Director and Partner with considerable expertise in HME/DME, home health care, hospice, pharmacy, medical devices, health IT, and related healthcare verticals in the US and internationally.