POC deep data dive: What are your take-aways?

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11/02/2018

There seems to be an uptick in outsider interest in the POC market in the past few months, and it’s no wonder with Inogen’s off-the-charts financials, and Philips and Invacare dipping their toes into direct-to-consumer business models.

Whenever I’m listening to a conference call on Inogen’s most recent financial results, an analyst almost always asks CEO Scott Wilkinson about POC adoption, mainly: When will we see it take off? And Wilkinson always says the company doesn’t expect to see a “hockey stick” growth curve in adoption. More like, slow and steady.

I looked at what Medicare paid for POCs (E1392) over a 10-year period, from 2008 to 2017, using our HME databank. What I found: While the amount Medicare paid for POCs has been slow and steady from 2014-17—and for one year, 2016, a bit bumpy—when you look at the past 10 years, payments have increased a whopping 821.05% (thanks to a particularly active 2008-13).

2017:26,521,201
2016:25,369,608
2015:25,900,993
2014:23,888,362
2013:22,706,968
2012:17,895,957
2011:12,366,372
2010:8,607,453
2009:5,184,240
2008:2,879,445

When you look at the same 10-year period for stationary oxygen concentrators (E1390), Medicare payments decreased 78.27%.

2017:425,142,708
2016:620,708,743
2015:903,973,456
2014:908,279,821
2013:1,063,635,721
2012:1,225,553,358
2011:1,357,953,903
2010:1,404,413,286
2009:1,379,142,846
2008:1,956,407,246

Now, one must take into consideration the reduction in reimbursement that spread to significantly more competitive bidding areas on July 1, 2013 (Round 2) and again on Jan. 1, 2016 (national rollout). So perhaps a look at the number of Medicare beneficiaries is more fitting/telling?

For E1392:
2017:144,213
2016:128,748
2015:118,005
2014:106,763
2013:97,434
2012:76,406
2011:54,872
2010:36,478
2009:23,686
2008:13,147

That’s a whopping 1,007.69% increase in the number of Medicare bennies over 10 years.

For E1390:
2017:1,229,770
2016:1,296,213
2015:1,340,951
2014:1,389,739
2013:1,453,982
2012:1,515,990
2011:1,578,755
2010:1,592,902
2009:1,598,701
2008:1,626,872

That’s a 24.41% decrease in bennies.

A caveat: The bid program has likely impacted access to both POCs and stationary oxygen concentrators, slowing down increases for the former and speeding up decreases for the latter.

I’m interested to hear what you think. What are your take-aways?