The home medical equipment (HME) market is experiencing massive change, from technology innovations and skyrocketing demand, to shifts in how payers operate.

Sometimes, the market moves so fast that it’s difficult to read the headwinds and tailwinds. Recent comments made by industry executives during company earnings calls and investor presentations, however, shed light on critical issues shaping the sector.

For this story, HME Business combed through some of the most interesting remarks from the past couple of months. You can read six especially prescient and thought-provoking comments below, edited for length and clarity.

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“The final rule for Medicare Advantage (MA) plans and other positive changes open the door for further growth of our services due to the payer expansion. With these positive regulatory shifts, we anticipate a noteworthy improvement in the behavior and compliance of Medicare Advantage payers. Increased transparency and accountability introduced by [recent] final rules signal a transformative era, fostering an environment where payers are incentivized to align with Viemed’s commitment to delivering high-quality respiratory care. These regulatory changes act as a powerful catalyst not only for our financial stability, but also for our ability to extend our services to a broader spectrum of patients.” – Todd Zehnder, COO, Viemed (Nasdaq: VMD)

Government regulators and watchdog entities are beginning to crack down on MA. The increased scrutiny is partly due to the fact enrollment in MA has surpassed that of traditional Medicare for the first time, with MA enrollment projected to grow even further.

Specifically, MA plans are being asked to operate with a heightened level of transparency while streamlining prior-authorization requirements and other forms of red tape that potentially reduce access to care for beneficiaries.

The above quote from Viemed’s COO speaks to this trend, which could bode well for HME organizations down the road.

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“Our sleep census, which is a combination of new starts and ongoing pathway supplies, continues to grow at a pace that bodes well for future revenue growth. Further, we take particular note of the real-world study recently conducted by ResMed (NYSE: RMD). This study shows a modest increase to adherence when CPAP users also take GLP-1s. This is consistent with what we are seeing in our population.” – Richard Barasch, Interim CEO, AdaptHealth (Nasdaq: AHCO)

GLP-1s agonists – drugs like Ozempic – have the potential to disrupt certain parts of health care. If patients taking GLP-1s are better able to maintain their health, they may no longer need certain services, the theory goes.

The topic has come up more frequently among HME companies. AdaptHealth’s CEO touches on GLP-1s in the above quote.

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“Due to this development, we are seeing some volatility in the domestic business-to-business channel, but we also see the potential opportunity to capitalize on a market leadership, differentiated product offering and brand recognition. … We expect that there may be a void in the market, and if so, we will be ready to step in and fill it.” – Kevin R. Smith, CEO, Inogen (Nasdaq: INGN)

Philips Respironics will no longer sell new CPAP or BiPAP sleep therapy devices, or other respiratory care devices, in the U.S. Philips is also reducing its respiratory product portfolio. With a major player leaving the market, it could present new opportunities in its wake.

The exit could create a major gap, too, if no other companies step up to stake their claim.

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“Looking at the regulatory landscape, we continue to see ongoing stability and have seen no signs suggesting a return to competitive bidding. In the past, CMS has started all competitive bidding procedures about 18 months before contracts and prices are finalized. As we look in the past year, we have seen positive policy developments such as the easing of restrictions for home oxygen that reduces the administrative burden on health-care providers and opens up access to patients.” – Gregory Crawford, CEO, Quipt Home Medical Corp. (Nasdaq: QIPT)

HME providers and suppliers have, for the most part, seen a fairly stable regulatory environment – and even some important wins in Washington, D.C. This includes a “gap period” for the DMEPOS Competitive Bidding Program (CBP) as of Jan. 1, 2024.

The above quote from Quipt’s CEO captures this idea.

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“We have great industry trends. We have a core foundational business that has strengths that we can further benefit from, but we have to grow it. We have to continue our efforts to simplify, to prioritize, to really carry that business forward. And that’s not a one-quarter or a one-year sort of thing; that’s more the opportunity that we have in front of us.” – Aaron Alt, CFO, Cardinal Health (NYSE: CAH)

Health-care companies of all shapes and sizes are facing similar economic challenges: rising labor costs, supply-chain hurdles and a reduced access to capital, among others. Across the board, this has prompted many companies to get back to the basics, focusing on operational efficiency and business best practices.

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“We are excited about the strong demand we are seeing in our at-Home Solutions and OptiFreight businesses, and our recent determination to further invest in and develop these businesses for long-term value creation as part of our portfolio. In at-Home Solutions, we continue to focus on enabling and supporting comfortable home-based care for patients with acute and chronic conditions. To support the growing demand for home health care, we’re investing to expand the capacity of our network, the breadth of our offering, and a new technology to drive operating efficiencies.” – Jason Hollar, CEO, Cardinal Health

The growing demand for home-based care reflects a broader shift in health care delivery toward more patient-centered and cost-effective models. This trend is particularly beneficial for HME companies and HME-adjacent businesses, as it drives the need for a wide range of medical devices and equipment that enable patients to receive care in the comfort of their homes.