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Obamacare Boosts U.S. Market for Sub-Acute COPD Ventilators

Thu, 02/13/2014 - 3:19pm
IHS

Spurred by cost-reduction efforts under the Affordable Care Act (ACA), U.S. shipments of ventilators used for hospital patients undergoing sub-acute treatment for chronic obstructive pulmonary disease (COPD) will rise by more than 40 percent from 2013 to 2017.

U.S. shipments of sub-acute ventilators will amount to 6,789 units in 2017, up 41 percent from 4,805 in 2013, according to IHS Technology (NYSE: IHS). The sub-acute segment will significantly outgrow the larger market for home-care COPD ventilators, which will expand by only 25 percent during the same period, as presented in the attached figure.

Sub-acute refers to hospital patients who no longer need acute care, but haven’t recovered enough to return home. The sub-acute ventilator market consists of systems that are used in locations outside of the intensive care unit (ICU). These places include step-down wards, general wards, long-term care facilities and skilled nursing facilities.

The US is the largest global sub-acute COPD ventilator market.

“U.S. hospitals increasingly are struggling to cope with the costs associated with the treatment of chronic diseases and long-term care,” said Nicola Goatman, medical devices and healthcare IT analyst at IHS. “Consequently, the sub-acute segment is expanding rapidly. In previous years, there was a drive to provide long-term care away from the central hospital environment in order to save costs. This move has been further heightened by the Centers for Medicare & Medicaid Services (CMS) Readmission Reduction Program, a section of the ACA that penalizes hospitals for the readmission of COPD patients. The need to cut down on readmission has spurred the expansion of sub-acute ventilator market.”

COPD crisis

Growing demand for sub-acute ventilators represents just the latest episode in America’s COPD crisis.

Approximately 12 million people are diagnosed with COPD in the US every year. This costs U.S. healthcare systems an estimated $50 billion annually.

Expenses related to COPD readmission rank third highest among U.S. Medicare expenditures, according to the Chronic Obstructive Pulmonary Disease Foundation.

The home care market in the United States has been the focus in previous years in an effort to reduce the cost associated with treating COPD.

Home Care provides the most cost effective solution for treating COPD patients. However, the United States has a high percentage of readmissions. Therefore, in efforts to reduce costs associate with COPD hospitals are more cautious in sending patients directly to the home environment.

Furthermore, reductions in reimbursements for non-life-support home-care ventilators is impacting the market. Home care ventilation has moved to a fixed fee, which impacts growth in this market as DMEs look for the most cost-effective solution. This results in price pressure to the manufacturer and restricted revenues from the sale of home care ventilators.

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