What DME Providers Need to Know About the 2026 National Health Expenditure Data Update

Published in Member Communities on October 07, 2026

By Tyler Coulander, Market Strategy Manager, VGM

Durable medical equipment (DME) spending is projected to surpass $81 billion by 2034. But the more important story is the growing role suppliers can play in supporting patients where more care is being delivered: at home.

The latest National Health Expenditure (NHE) projections offer encouraging news for the DME industry. Demand for home-based care is accelerating, and suppliers are becoming increasingly important to the future of healthcare delivery.

According to the latest analysis, DME spending is projected to grow from approximately $55 billion in 2026 to more than $81 billion by 2034, representing strong, sustained growth over the next decade. More importantly, this growth is expected to be largely demand-driven, with approximately 72% of projected market expansion resulting from increased utilization rather than price inflation.

For providers, that distinction matters. Utilization-driven growth reflects fundamental shifts in who needs care, where care is delivered, and how health systems manage patient outcomes.

The Demand Drivers Behind Growth

The U.S. population continues to age rapidly, with the number of adults age 65 and older expected to increase from approximately 65 million in 2026 to nearly 74 million by 2034.

At the same time, chronic disease prevalence continues to rise, creating greater demand for products and services that support mobility, respiratory care, sleep therapy, diabetes management, and aging in place.

These trends are occurring alongside a broader shift in healthcare delivery: the healthcare delivery system continues to move beyond traditional care settings and into the home.

While hospitals and nursing facilities have seen slight declines in their share of overall healthcare expenditures, home health services continue to gain momentum and are projected to account for 9.56% of total healthcare spending by 2034, up from 7.71% in 2025.

For DME suppliers, this ongoing trend toward home-based care represents a meaningful opportunity to expand their role as essential care partners by supporting patients, collaborating with referral partners, improving adherence, helping reduce avoidable hospitalizations, and strengthening outcomes across the healthcare continuum.

Understanding the Evolving Payer Landscape

The payer environment is also evolving.

In 2026, DME spending is expected to be distributed among private insurance (39%), Medicare (39%), and Medicaid (22%). Medicare's share, however, is projected to grow to 43% by 2034 as the population ages.

Within Medicare, the continued rise of Medicare Advantage remains one of the most important trends for suppliers to monitor. Today, Medicare Advantage accounts for an estimated 22% of DME spending, compared with 16% for traditional Medicare. By 2034, Medicare Advantage's share is projected to increase to 27%.

While this shift presents challenges related to reimbursement pressure, utilization management, and network participation, it also creates opportunities for suppliers that can demonstrate measurable outcomes, improve patient adherence, reduce hospitalizations, and support value-based care initiatives.

What This Means for DME Providers

Taken together, the latest NHE projections validate several long-term realities shaping healthcare delivery and business strategy:

The population is getting older.
Chronic disease prevalence continues to rise.
Care is moving closer to home.
Payers are increasingly focused on value and outcomes.

For DME providers, the path forward means meeting growing demand while strengthening their position as essential healthcare partners.

Organizations that align with home-based care trends, strengthen relationships with evolving payer models, leverage data-driven outcomes, and communicate their value effectively may be better positioned to grow while supporting stronger patient outcomes.

These projections point to a growing need for providers who can connect equipment, service, and outcomes throughout the patient journey.

VGM is here to help providers monitor industry trends, evaluate market opportunities, understand evolving payer dynamics, and make informed decisions that support long-term growth and patient care.

Connect with a VGM expert today to discuss how evolving healthcare trends may impact your market, payer strategy, and growth opportunities.

VGM members: Access the 2026 National Health Expenditure Update - DME Outlook here.

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