Narrow Networks Are Raising New Risks in DME: What Health Plans Should Consider
Published by
Pam Sarich
on
Narrow networks in DME were designed for efficiency. But for today’s health plans, they’re quietly becoming a financial and clinical liability.
When it comes to Durable Medical Equipment (DME), narrow networks that once seemed efficient are now introducing real risks. Based on my own experiences leading network operations, the reality is clear: DME networks must be built for resilience, not just cost containment.
Narrow Networks Create Hidden Points of Failure
There is a real cost to having too few suppliers, and it often shows up at the worst possible time.
I cannot count the number of times we wanted to discharge a patient on a Friday but had to hold them over the weekend because no vendor could deliver the needed equipment on time. Beds stayed occupied, patients faced avoidable infection risks, and costs escalated with each passing day.
These moments are not isolated incidents. In a narrow network, delays in getting critical home medical equipment create a ripple effect across utilization management, provider relationships, and member satisfaction. It drives up avoidable readmissions and puts CAHPS and HOS scores at risk, all of which directly impact a plan’s financial targets.
Tariffs and Supply Chain Shocks Are Accelerating
Another pressure point health plans cannot ignore is the impact of tariffs on home medical equipment. Today, over 90 percent of disposable HME products come from China and Mexico. Some suppliers warn that tariff pressures could impact access for up to 25% of patients, especially those dependent on imported disposables from those countries.
We’ve seen the consequences of fragile supply chains before—during the oxygen shortages of COVID, the Philips CPAP recall, and regional hurricanes that shut down supplier operations. These are not hypothetical risks. A narrow network magnifies their impact.
Relying on a limited set of suppliers or SKUs means that if one partner struggles with procurement or cost pressures, there may be no backup, and patients pay the price.
The Hidden Cost of Hospital Supply Closets
When DME cannot be sourced quickly through a network, hospitals turn to their internal supply closets. This convenience comes at a high cost.
I remember reviewing hospital bills where a product that would have cost $400 through a preferred vendor was charged at $4,000 from the hospital closet. These hidden costs add up quickly, especially when there is no real-time tracking or intervention.
Hospital closets were built for emergencies, not as a first-line solution. Without a strong DME network in place, plans find themselves paying inflated rates with no added value to the member experience.
What a Resilient DME Network Looks Like
Through years of experience building and optimizing networks, a few principles stand out:
- Diverse Supplier Base: Plans need redundancy across suppliers and geographies to protect against disruption.
- Real-Time Fulfillment Tracking: Visibility into delivery status is critical, especially for high-risk or time-sensitive discharges.
- Member-Centric Support: Equipment delivery must include patient education and setup support, not just a drop-off at the doorstep.
- Supply Chain Readiness: Tariff risk and product availability must be factored into supplier strategy now, not when disruption hits.
- Operational Simplicity: Network teams are already stretched. Solutions must reduce friction, not add to the burden.
At Tomorrow Health, we focus on providing health plans with an intelligent routing platform that ensures members receive the right equipment, at the right time, from a high-quality supplier without adding operational complexity.
Future-Proofing Your Network Starts Today
The risks tied to narrow DME networks are no longer hypothetical. Procurement delays, rural access gaps, and supply chain disruptions are impacting patient care and plan performance today. It is easy to prioritize larger, high-cost areas like oncology or cardiology network management. But ignoring DME creates a hidden drain on both costs and outcomes.
A resilient, member-centric DME network protects plans against disruption, improves member satisfaction, reduces unnecessary utilization, and strengthens provider partnerships. Investing in network optimization now ensures health plans are prepared for the future of value-based care while delivering better outcomes for the members who count on us every day.
Join Our Executive Roundtable
Is Inefficient DME Management Impacting Your Bottom Line and Member Satisfaction?
Tomorrow Health’s Executive Roundtable brings together industry leaders to address the critical challenges of DME management, including fulfillment delays, fragmented networks, and rising supply chain risks. Learn how leading organizations are building scalable, data-driven networks to maximize ROI, reduce DME costs by up to 15 to 30 percent, improve patient outcomes, and ensure access for underserved communities.
📅 Tuesday, May 20, 2025
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