DME Feasibility Assessment for Hospitals & Health Systems
Should your health system own its DME operation?
Let’s find out before you invest in building one.
Hospital-owned Durable Medical Equipment can create meaningful clinical, operational, and financial value. But that doesn’t mean it’s the right move for every health system.
Before committing capital, hiring a team, selecting technology, or building an operation, leadership needs to understand what the opportunity actually looks like.
Before You Build a DME Operation, Know What You're Potentially(add) Building
The idea behind hospital-owned DME can sound relatively straightforward.
Your health system already has the patients. Those patients already need equipment. Referrals are already being generated. Why not bring more of that care (and potentially more of that revenue) inside the organization?
Sometimes, that logic is exactly right.
But DME is a specialized business.
What We Evaluate
A meaningful feasibility assessment needs to go well beyond a high-level market study or financial projection.
HCEA evaluates the factors that will ultimately determine whether the operation works in the real world.
Strategic Assessment
We start with the health system itself.
What is driving the conversation around DME? Is the goal to improve discharge efficiency? Strengthen continuity of care? Reduce referral leakage (assess capture rate)? Create a new revenue stream? Gain greater control over the post-acute patient experience?
Payer Strategy & Contracting
A DME operation can generate plenty of volume and still struggle if the reimbursement model doesn’t work.
We evaluate payer mix, reimbursement considerations, contracting opportunities, fee schedules, network participation, and the other realities that determine what the health system can actually expect to collect.
Financial Modeling
This is one of the most important pieces of the assessment.
We build a detailed financial model around the proposed operation, including factors such as:
Projected revenue
Product Line & Servicing Strategy
Not every DME operation should try to provide everything on day one.
In fact, it usually shouldn’t.
We evaluate which product categories make sense based on the health system’s patient population, referral patterns, reimbursement environment, operational capabilities, and strategic priorities.
Staffing & Organizational Design
Who is actually going to run this?
It sounds like a simple question. It isn't.
DME requires specialized operational knowledge, and many health systems understandably don't have that expertise sitting inside the executive team.
Executive Presentation & Final Report
At the end of the assessment, leadership shouldn't be left with a stack of data and another decision to decipher.
We bring the findings together into a clear executive-level recommendation.
The final report and presentation outline the opportunity, financial model, operational requirements, risks, strategic considerations, and recommended path forward.
Why Are More Health Systems Looking at DME?
DME may not be the first service line discussed in a hospital boardroom.
But it touches several issues that already are.
Timely Patient Discharge
A patient may be medically ready to leave the hospital but unable to do so because the equipment they need isn't available or coordinated.
What Happens If the Answer Is Yes?
This is where HCEA is different from a firm that conducts a study, delivers a report, and walks away.
If the feasibility assessment shows a compelling opportunity, we can stay involved.
DME Startup & Implementation
HCEA can help take the recommendations from the feasibility study and turn them into an operating business.
What If You Already Own DME?
Then the question changes.
Instead of: "Should we build this?"
it becomes: "Is this operation performing the way it should?"
An existing DME operation may have meaningful underlying value but…
Experience Matters When the Model Meets Reality
A feasibility model can look great in a spreadsheet.
Operating a DME business is different.
HCEA brings more than 60 years of real-world DME leadership and consulting experience to the…
Frequently Asked Questions
What is a DME feasibility assessment?
A DME feasibility assessment evaluates whether owning and operating a Durable Medical Equipment business makes financial, operational, and strategic sense for a hospital or health system.
HCEA evaluates the opportunity across areas including market demand, referral activity, reimbursement, payer strategy, financial performance, product mix, staffing, organizational design, and implementation requirements.
Should every health system own its DME operation?
No. There are health systems where the economics and operational requirements may not support ownership.
That's exactly why we believe feasibility should come first.
The goal is not to justify a predetermined decision. It's to understand the opportunity well enough to make the right one.
Can hospital-owned DME be profitable?
Yes, under the right circumstances.
Referral volume, payer mix, reimbursement, product selection, staffing, operating structure, technology, and cost management all influence financial performance.
Rather than relying on broad industry assumptions, HCEA models the opportunity around the realities of the individual health system.
Can HCEA help us launch the business after the assessment?
Yes. When the assessment supports moving forward, HCEA can help with the startup and implementation process, including operational design, staffing, technology, workflows, accreditation, payer strategy, revenue cycle, product implementation, and interim leadership.
What if we already operate DME?
HCEA also works with existing hospital-owned DME operations to evaluate performance, identify inefficiencies, improve financial results, strengthen leadership, modernize workflows, and address operational challenges.
Before You Decide, Understand the Opportunity
You don't need to decide today that your health system should own DME. You don't even need to be convinced that it should.
You just need to determine whether there's an opportunity worth pursuing.
That's what the DME Strategic Feasibility Assessment is designed to answer.
We'll help you understand the opportunity, economics, requirements, risks, and potential upside - and then give your leadership team a clear recommendation about what to do next.