Why so interested in HME?

I've never fielded as many calls from private equity, investment and consulting firms as I have in the past two weeks. Ask Managing Editor Theresa Flaherty.

What do they all want to know?

Mainly, how many HME providers were there before competitive bidding, how many are there now and how many will there be after Medicare expands pricing from the program to non-bid areas?

Put another way, how much has the HME market consolidated in the past five years, since the program was first launched, and will it continue to consolidate after said expansion?

They also want to know: What percent of the market do the nationals have wrapped up, and what's the makeup of the remaining market? Is it mostly regional- or mom-and-pop-sized companies?

Theresa and I have been wondering, why now?

Medicare's plans to expand pricing from the program to non-bid areas is a timely and obvious reason. But I don't seem to recall the expansion in Round 2 resulting in this many phone calls from outside interests, and that involved expanding the program to every large metro area.

The other timely and obvious reason: Lincare signing an agreement to buy American HomePatient, witling down the number of national players from four to three.

Theresa happened to be on the phone with some industry analysts to report on the Lincare news, and I heard her ask at least one of them why these private equity, investment and consulting firms would be so interested in the HME market right now.

The analyst said, in nutshell, that the demographics of the aging population are so attractive that when the nationals make a big move like this (the last such move was probably Linde buying Lincare for $4.6 billion in 2012), eyes tend to drift once again toward our small sector of the healthcare industry.