Executive Summary:

• The United Kingdom appears to have greater utilization of Durable Medical Equipment (DME) products as compared to the US Medicare Population (over half of the UK vs 21 percent of the US Medicare population). However, this variation in utilization may be driven by definitions rather than patient need. 
• The definition of DME varies with each country and evolves every year to encompass more devices and services. Traditional examples of DME include wheelchairs, crutches, CPAP machines and diabetic blood testing. 
• Comparing the DME market of the United States, Canada, and the UK can enrich policymakers knowledge of the market dynamics needed to sustain innovation, competition and improvement in the US healthcare system; nevertheless, policy makers must consider the differences in the DME markets between countries before making any meaningful comparisons or decisions.  

Introduction:  

Following recent legislation and proposed regulations that look to reduce Medicare or other state-funded spending to that of other similarly situated countries, these reforms may overlook the key differences of the drivers of each nation’s individual health care marketplace. While – international comparisons can sometimes be helpful, comparing the price, reimbursement, and utilization of Durable Medical Equipment (DME) between countries requires a closer assessment of the key nuances including the differing definitions what equipment is truly DME. The DME market in the United States, Canada and the United Kingdom (UK) are notably different—varying from the total number of beneficiaries using DME, to how these patients procure these life changing products and devices.  

Approximately 14.5 percent of the Canadian population uses a mobility device, with an even greater number utilizing any type of DME. In the UK, 38 million individuals use a medical device daily, this is more than 1 in 2 people in the UK. In the United States, 21 percent (3 million) of the total Medicare population (approximately 65.5 million beneficiaries) use DME. This large representation compared to the United States utilization rate seems concerning, however policy makers need to understand that usage rates in the US may be tied more closely to a stricter definition of DME, leading to questions about the possible expansion of what medical device and equipment is considered DME.  

Defining DME: 

United States 

Healthcare.Gov, defines Durable Medical Equipment (DME), as “equipment and supplies ordered by a health care provider for everyday or extended use.” DME are medical items used by Medicare beneficiaries with certain medical conditions, disabilities, or injuries. Examples of DME include wheelchairs, crutches, oxygen equipment, home infusion services, blood testing strips and more. Generally, DMEs have an expected lifetime of three years or more, and while some patients will only need to use DMEs for a short period of time, others may use DMEs for the totality of their life. However, not all medical necessary items are considered DMEs. Home improvements such as grab bars, walk-in showers and ramps are not considered DMEs in the United States.  

Canada 

In Canada, DME is defined as “devices that provide some sort of therapeutic benefit to people suffering with a medical condition or illness.” In Canada, DME falls under the term “medical device” which is defined under the Canada Health Administration, Health Canada. Health Canada also plays a key role in the regulation of DME in Canada. Examples of DME in Canada include medical lifts, bath chairs, wheelchairs, hospital beds and insulin pumps.  

United Kingdom 

In the United Kingdom, DME is often called Community Equipment Services (CES). CES is defined as devices that “can help facilitate rehabilitation, hospital discharge, admission avoidance and end of life care enabling patients to remain in the place of their choice” by the National Health Service (NHS).. Devices include equipment from simple aids for daily living to more complex pieces of equipment within the home environment, such as hospital beds. Devices such as toilet raisers, perching shower chairs, and profile beds are provided through the program. However, the NHS does not provide  wheelchairs through the CES program. 

Utilization of DME: 

United States 

In 2023, the United States DME market size was valued at around US $63.14 billion, and this rate will only continue to grow between 2024 and 2030. With the rise in prevalence of chronic diseases, and the rising geriatric population, the use and demand for DME is also expected to increase. In 2022, the ten most used DME were wheelchairs, walkers, hospital beds, oxygen equipment, nebulizers, blood sugar monitors and test kits, CPAP machines, commodes, pressure reducing support services and braces. As of February 24th, 2024, around 3 million Medicare beneficiaries have submitted a claim for a DME.  

Canada 

In 2022, Canada’s DME market size was estimated at to be US $6.8 billion, with the market expected to grow by 5.4 percent annually through 2028. Cardiovascular and respiratory devices, surgical devices, spinal devices, and diabetes monitoring devices made up the largest part of the market share in 2022. In 2017, over 2.7 million Canadians used a mobility device, meaning that the total number of Canadians who used any type of DME, or medical device, is greater than 2.7 million.  

United Kingdom 

The medical device market in the United Kingdom is estimated to reach around US $18.21 by the end of 2024. Further, the market is expected to experience an annual growth of 5.65 percent by 2028. Current estimates show that around 38 million people in the UK have contact with, or use, a medical device every day.  It is important to remember the board definition the UK uses when defining DME. In this study, the medical devices were considered items such as pacemakers, infusion equipment, pregnancy tests, dressings, and hospital beds. 

Procuring DME: 

United States 

In the United States, if a patient is covered by original Medicare, they must receive their DME from a Medicare-approved supplier, and if they are covered by Medicare Advantage, they must follow three steps: first, they must receive approval from their plan before getting DME, then they must use a supplier in in the plans networks, and finally they must use a preferred provider. In 2018, the CMS Medicare contractors created an outline resource for physicians to understand how to best prescribe DME for their patients. This outlines the important and specific documentation that must be completed to not only prescribe DME, but also to get the devices reimbursed.  

Canda 

In recent years, procurement in Canada is being done on a centralized basis. Quebec, Alberta and Ontario have different large group purchasing organizations that procure DME or medical devices for hospitals. Hospitals and hospital buying groups are required to run competitive procurement. According to Thomas Yeo, who advises on Canadian procurement says that this requirement is due to “both the domestic and international trade treaties, and also provincial directives”. Further, sole source contracting can be used in certain, and limited circumstances. These include emergency situations when there’s only one supplier capable of providing the service needed.  

United Kingdom 

A framework known as “Aids for Daily Living” has 21 total suppliers that provide 36 lots or devices that assist with toileting, home and kitchen aids, crutches, frames and rollators. This framework focuses on patient independence regarding daily tasks. When a patient needs a wheelchair, home aids or other types of devices that help with everyday living, patients can take three options. The patient can contact local services, such as local wheelchair services, contact their specific integrated care board, or search online for specific NHS services.  

Reimbursement and Payment of DME: 

United States 

Under original Medicare and Medicare Advantage the following devices covered include wheelchairs, walkers, hospital beds, power scooters and portable oxygen equipment. Medicare Part B covers prosthetic devices that replace all or part of an internal bodily organ, prosthetics, orthotics and certain medical supplies. Further, Medicare will also often cover certain prescription medications that can be used with DME, even if they can only be used once. An example of this is that Medicare covers medication used in nebulizers and lancets and test strips for self-testing diabetic devices.  

DME are reimbursed under the philosophy of “reasonable charges”. For Part B, a study found that reimbursement for DME services were estimated to be around 60 percent of the charges for covered devices and items. Around 15.1 percent of the charges were attributed to coinsurance, around 7 percent were attributed to deductibles and around 17.6 percent were reasonable charge deductions. For DME covered under Medicare, most DME suppliers will know if Medicare allows beneficiaries to buy a certain kind of DME, or if Medicare pays for you to rent it. 

As part of the Medicare Modernization Act of 2003, the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) competitive bidding process was established. However, due to numerous delays, the first round of bidding occurred in 2011. The competitive bidding program requires suppliers to submit bids to provide certain types of medical devices and supplies. Medicare uses these bids to establish the amount that Medicare will pay for the equipment included under the program by starting with the lowest bid and working upwards until a volume threshold is met. Successive rounds of DMEPOS was considered a success—with Medicare spending less while Medicare beneficiaries did not see a reduction in access to DME products included in the program. The most recent round of DEMPOS only included two products, off-the-shelf knee, and back braces and concluded on December 31, 2023. 

Canada 

If a medical device is to be used in a hospital, the manufacturer is paid by the provincial and territorial governments through pre-approved healthcare budgets. Quebec, the second largest providence in Canada with a 2022 population of 8,751,352, budgeted $1.034 million dollars in 2023-2024 for healthcare expenditures. In contrast, Nunavut, the smallest territory in Canada, with a 2022 population of 40,586, budgeted $372,521between 2023-2024 for healthcare services. This means that territories with smaller populations anticipate less utilization and that larger territories can budget more for DMEs and Medical Devices than smaller territories.  

If devices are utilized in a clinical setting, they are direct customers of the manufacturer, and manufacturers will usually offer volume-based discounts to keep the practices purchasing their specific products. In Canada, part of the price of these medical devices are reimbursed by the provincial and territorial government to the manufacturers who sell the devices. This is done through a framework where manufacturers can register their products and devices with the province. Certain patients can also register with this framework and can receive devices from the vendor of choice that is approved through the province.   

United Kingdom 

In the United Kingdom two specific services must be provided free of charge to patients who are considered disabled. These services include community equipment, items that are used to help with daily tasks, and minor (less than £1,000) adaptations to one’s home if these improvements help with mobility and safety around the home. Local authorities can also provide equipment and devices such as wheelchairs, walkers, and nebulizers as part of a support plan, and this equipment is provided on a means tested basis. Further, there are four organizations that provide charitable contributions to those who need certain medical devices and services such as Barchester’s Charitable Foundation, Equipment for Independent Living, Mobility Trust and The Edward Gostling Foundation.  

Reimbursement for Medical Devices in the United Kingdom Market changed in 2016, to move away from the wide variations of previous payment. Previously there were separate hospital trusts paying for the devices and then being reimbursed by NHS England. This new reimbursement strategy operated by NHS Supply Chain means that providers will now place orders for the needed devices with the NHS supply chain (at no additional cost), then the NHA supply chain will send orders straight to the manufacturers, when finally, the supplier will send the invoice directly to NHS England. 

Conclusion: 

It may appear that the United Kingdom has greater utilization than the US—but this seems to be due to the broader definition of DME, not due to actual patient need. While certain similarities can be found between the DME markets of the United States, Canada and the United Kingdom, these markets seem to be more different than alike. All three countries seem to have successful markets that are controlled by different types of regulations and reimbursement mechanisms. Policy makers must remember these differences in the DME market when trying to compare the state of the US DME market to other markets.