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Health Care Final 10-15-09 -   8.1.b - Durable Medical Equipment

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Health Care Final 10-15-09
Healthy State
Economic Recovery
Action Plan

8.1.b - Durable Medical Equipment

How well does DSHS manage its durable medical equipment costs?

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Data Notes

Data Source:

Measure Definition: DSHS Durable Medical Equipment (DME) Per Capita Costs Growth, Average Per Capita Costs, and Total Expenditures. Includes the cost of DME (i.e., medical supplies and equipment, wheelchairs, prosthetic, and orthotic devices; enteral nutrition; oxygen and respiratory therapy; incontinent supplies; some over-the-counter drugs) provided to DSHS medical programs clients.

Target Rationale: 

The Governor's Blue Ribbon Commission on Health Care Cost and Access directed that the rate of growth in total health care spending will be no more than the rate of growth in personal income.
Link to Agency Strategic Plan: The HRSA 2009-13 strategic plan that sets forth as one of its goals that per capita costs growth for DSHS medical programs will be less than the state's per capita personal income growth rate. This service group contributes to the overall per capita costs.
Relevance:   Tracking historical and forecasted expenditures by service group enables HRSA to identify trends and to anticipate, plan for, and better manage projected future costs.
Notes: (optional)
Also Available
Action Plan: Yes
Extended Analysis: No

 Summary Analysis

Durable medical equipment (DME) per capita costs, at an approximate average of $11 per client per month, are projected to constitute an average of 3.2% of DSHS Medical Programs total expenditures for SFY 09-11.

The average growth in DME per capita costs for SFY 05-08 was 0.5%, which included a 5.8% decrease in per capita costs growth between SFY 2005 and 2006 and a 5.9% increase from SFY 2007 to 2008.

The SFY 2005-2006 5.8% and $0.63 decrease in growth and per capita costs, respectively, was due to a reduction in rates and services for incontinence supplies and enteral nutrition. The more recent 5.9% and $0.60 increase in growth and per capita costs, respectively, between SFY 2007 and 2008 was due to an increase in the use of unedited pharmacy codes for DME products, such as enteral nutrition, and a change in Medicare coverage and payment policies that made Washington Medicaid the primary payor for certain DME (e.g., expensive power wheelchairs).

The forecasted average growth rate in DME per capita costs for SFY 2009-2011 is 2.6%. This does not include the DME rate and service reductions scheduled to take effect on July 1, 2009, which will likely drive the per capita costs growth rate lower.