New study: HME saves billions

Thursday, October 27, 2011

ATLANTA – A new study that shows how the HME industry can save Medicare billions of dollars should have CMS, Congress and the general public intrigued and excited, its chief analyst says.

Brian Leitten, a Florida-based consultant who, with the help of VGM Group, spent four months compiling data to make “The Case For Medicare Investment in DME,” told Medtrade attendees last week that CMS needs to “invest” in home medical equipment because it can save Medicare billions, along with generating handsome ROI for the program.

To illustrate his point, Leitten presented cost savings figures for the mobility, respiratory and sleep therapy business segments.

For mobility, the study looked at the impact of falls on the healthcare cost burden and came up with a staggering number: $20.5 billion. That figure represents how much beneficiary falls cost Medicare and the healthcare industry each year, he said, as falls cause severe injuries, resultant surgeries, extended acute care and sub-acute care stays. In calculating expenditures vs. savings, Leitten concluded that mobility saves Medicare $10.73 for every $1 dollar it invests and that the $1 invested is returned to Medicare in just over five months.

The study makes the same assertions for respiratory therapy on COPD patients—an annual savings of $7.4 billion to $13 billion, and savings of about $6 for every $1 invested with a two-month payback of that dollar.

CPAP therapy saves Medicare nearly $11 billion by preventing the sleep apnea complications of coronary disease, congestive heart failure, atrial fibrillation and stroke, according to the study, which did not measure the other co-morbidities of hypertension, obesity and diabetes. CPAP’s return on investment for Medicare’s $1 investment is $6.21.

“These findings should be intuitively obvious to the casual observer,” Leitten concluded. “The return is so much greater than the dollars CMS is trying to save.”