The Economic Impact of Long-Term Oxygen Therapy

Abstract

Unfortunately, an exact figure for the actual number of individuals currently receiving home oxygen therapy remains elusive. In the United States, previous estimates ranged from an upper limit of 800,000 individuals to a lower limit of 540,000 with additional uncertainty from the fact that each estimate was for a different calendar year [1]. In this study, the authors used reported Medicare expenditure in 1998 for a different approach to evaluate the prevalence of usage of long-term oxygen therapy (LTOT) and test the reliability of previous findings. Medicare reported total expenditures for all stationary home oxygen equipment (concentrators and liquid systems) in 1997 to be 1.7 billion USD. Assuming the average monthly Medicare payment in 1997 for home oxygen is 260 USD (80% of the 1997 monthly allowable of 328 USD), an annual cost per beneficiary of 3,120 USD was calculated. Dividing the annual estimated cost per Medicare beneficiary by the total Medicare expenditures for home oxygen therapy equipment, the total number of Medicare patients was 570,206. Using the 80% rule (e.g. Medicare covers up to 80% of all patients in the United States using home oxygen therapy), the total number of users of home oxygen therapy in 1997 amounted to 712,758. In 1998, total annual Medicare expenditure for all stationary home oxygen equipment was 1.3 billion USD and reflected the 25% cut mandated by the Balanced Budget Act of 1997. The average monthly Medicare payment in 1998 was 196 USD (2,352 USD annually).