“Providers must be objective and rationalize their operations,” adds Lewarski. “Eliminating non-value added services is critical, along with finding ways to automate and reduce tasks.”

Knowing true costs is a starting point.

“Providers pay close attention to the initial acquisition costs of equipment and that is certainly important. However, you have to follow many other successful industry patterns and really drill into the data and ascertain other costs that relate,” says Riley.

“As with anything, each individual business and each individual provider's strengths may differ,” says Respironics' Snyder. “There are a lot of tools and new technologies available that can help them either reduce costs or open up new cash sales and rental opportunities.”

In sum, home respiratory care providers do have options, but they must utilize technology to increase efficiency and streamline operations to remain viable. The one thing they shouldn't do, say these industry experts, is nothing at all.

Dream Interpretation

Despite reimbursement cuts that could impact the sleep-disordered breathing market based on the effects of competitive bidding, the number of new diagnoses is driving this area of HME growth at a steady rate.

“With just over four million Americas being treated and more than 40 million Americans with undiagnosed SDB, the opportunity for growth remains largely underpenetrated,” says Michael J. Farrell, senior vice president of Poway, Calif.-based ResMed's sleep strategic business unit.

According to Joe Lewarski, vice president of Elyria, Ohio-based Invacare's respiratory group, “Different sources report different rates, ranging from 10 to 18 percent,” he says. “[This is due to] aggressive public awareness campaigns, along with the high revenue and highly profitable sleep diagnostic business. With a small number of physicians and labs controlling the sleep diagnostic market, there is the benefit of supply side economics.”

CressCare Medical in Harrisburg, Pa. focuses exclusively on the sleep side of the business. Company CEO Todd Cressler says he has seen a 15 percent a year increase with a 25 percent growth in his supply business.

“I think sleep's awesome. It is good for referrals, and there is a lot of potential to grow different types of businesses within the sleep market,” he says.

“Whether it's opening sleep labs, opening centers that do HME and the testing, creating partnerships with physicians or doing what I do, which is just HME. I think each area is a little different, and there's a lot of potential for a lot of different types of models to occur.”

Ralph McBride, vice president of HME/RT for Greensboro, N.C.-based Advanced Home Care, sees growth as well, but with a twist.

“The market is growing, but vertical integration is also growing,” he says. “Stand-alone, entrepreneurial labs are finding ways to maintain and grow their revenue streams by vertically integrating. Likewise, hospital-based labs are growing by adding beds. Fortunately, good HME sleep providers are seeing strong double-digit growth.”

Despite heightened awareness in the medical community, to increase the number of patients diagnosed with sleep-disordered breathing, experts say more work is needed.

“There is still work to be done with the physicians, and there is still work to be done with the general population in terms of awareness and getting people to self-select if they want to be screened and getting doctors to more automatically screen patients,” says Gretchen Jezerc, director of U.S. marketing for sleep-disordered breathing, Respironics, Murrysville, Pa.

Farrell notes that ResMed has partnered with HME providers in the areas of addressing sleep-disordered breathing co-morbidity referral marketing, including cardiovascular disease, morbid obesity and diabetes.

“These markets are only just beginning to emerge as the clinicians and practitioners hear more about sleep-disordered breathing and its prevalence and effect on the other disease states if left untreated,” he explains. “Diabetes and occupational health remain two of the highest potential areas for growth, and we are partnering with our HME provider customers to help develop and capture this new market growth.”