For years, Durable Medical Equipment (DME) was a quiet line item in hospice budgets.
It was operational. It was predictable.
And as long as vendors were paid and equipment arrived, it didn’t raise red flags.
Most contracts focused on one number: the per diem.
Once a daily rate was negotiated, the assumption was that financial risk was locked in.
And for a long time — that assumption worked.
Margins are tighter.
Labor is stretched.
Referral sources expect reliability.
Finance has fewer levers to pull when spend drifts.
In this new environment, DME isn’t just a supply cost — it’s a system that impacts:
A low per diem makes sense to finance leaders.
It signals control, efficiency, and good stewardship of hospice dollars.
The problem isn’t per diem pricing itself.
The problem is assuming the per diem reflects the total cost of DME.
That daily rate often hides:
At the start of a contract, things seem fine.
But over time, vendors tighten definitions of what’s “included.”
Requests that used to be covered now require authorization or additional charges.
Hospice care isn’t static — and neither is DME.
As census shifts and patient needs evolve, so does DME usage.
Suddenly, month-end reconciliation doesn’t match expectations.
But by the time those patterns become clear?
It’s often too late to intervene without disruption.
These aren’t conscious overspending decisions.
Costs creep in gradually — spread across invoices, buried in service lines, delayed by weeks or months.
This is the core risk of a “cheap” DME model:
It doesn’t eliminate cost. It relocates it.
From a visible rate into:
The per diem may look great on paper — but it’s the system behind that rate that determines whether spend stays contained.
If the system doesn’t offer real-time visibility into:
Then the per diem is just a number — not a safeguard.
For hospice finance leaders, the question is no longer:
“Is the per diem low?”
The better question is:
“Does this DME model give us early visibility to prevent cost from creeping in?”