“The opportunity in the sleep market has never been better,” says Drew Terry, ResMed Corp.'s senior director of product management for sleep. “Awareness is growing with popular news outlets picking up stories on sleep on a daily basis. Also, the broader medical community is becoming more aware of sleep disordered breathing and the difference that appropriate therapy can make.
“Even with increasing awareness, the majority of the opportunity lies ahead of us with the vast majority of patients yet to be diagnosed and treated.”
Gretchen Jezerc, director of U.S. marketing, sleep disordered breathing, Philips Respironics, agrees, although she notes a slight decline in the pace of growth.
“The market is still growing but at a slightly slower rate than in recent years. Demographic trends, such as the growing prevalence of obesity, cardiovascular disease, diabetes and increasing public awareness of obstructive sleep apnea are being offset by several negative outcomes of the economic downturn,” she says.
“These include reduced referrals from sleep centers, fewer out-of-pocket PAP purchases by patients and less frequent mask replacements. All of these factors can be traced back to patients' loss of health care coverage or their tightening personal finances, which make them unable or unwilling to cover the costs of copays for sleep tests and positive airway pressure therapy.”
Bob Messenger, RRT, product manager for sleep products and clinical manager of respiratory products for Invacare Corp., adds that providers who are experiencing a reduction in their working-age patients are seeing an increase in Medicare patients.
“Whereas Medicare patients accounted for 15 percent of the market before, now it seems to be up to about 20 percent,” he says.
An additional factor is the new set of guidelines for PAP reimbursement put in place last year by the Centers for Medicare and Medicaid Services.
“Home care companies are now starting to feel the effects of the need to document their Medicare patients' compliance with and benefit from therapy in order to receive reimbursement,” Jezerc notes.
Market Outlook
According to Jezerc, three key forces will have a major impact on the sleep market in the coming year: “the speed and scope of economic recovery, impending health care reform, and further CMS actions, potentially including the rollout of competitive bidding.”
Another factor could also have an effect, Messenger points out. “I believe third-party payers are going to look at the Medicare model [regarding compliance guidelines] and adopt it as well,” he says. “If I was a provider, I would look at what is happening today with Medicare and I would anticipate that that is what the future holds.
“There is a huge expense associated with undiagnosed and untreated sleep patients. We might find that with health care reform, insurers might take a more active role in wellness as opposed to just paying for illness.”
Terry expects the momentum to continue with growing awareness and increased access to diagnosis and treatment, including the option of home testing. “Medicare and many of the commercial payers are now offering new pathways to diagnosis with home sleep testing,” he says.
Although many providers have seen success in the sleep arena, some still hesitate because of cost or misconceptions about the market. “Providers who do not want to get into sleep are mostly concerned about the labor costs involved,” says Messenger. “With sleep, you have to continue to follow up with patients and ensure they are receiving proper therapy. It is more of a service and less of a product and, unfortunately, you only get reimbursed for the product. But if you take care of patients, the money will follow,” he says.
Jezerc says she continues to be surprised at how few providers “truly tap into the opportunity presented by proactively resupplying their patients with masks and other accessories.
“The misconception is that new set-ups will continue to be the key to sustained growth. New set-ups will always be critical, but at the current slower growth rates in new set-ups, more focus on compliance programs and supply replacement will likely be needed to maintain the needed industry growth,” she explains.
According to Terry, there is a lot of interest but a lot of unknowns about how the market will evolve. “Medicare specifically prohibited the involvement of HME providers in home sleep testing, but many of the private payers have not,” he says. “Differences like this do cause confusion, and HME owners need to stay abreast of the latest developments in the regulations to ensure that they are using every avenue available to access sleep patients.”
Achieving Compliance
It is well known that compliance and supply replacement are essential to increase profits and improve patient outcomes — and the two are closely intertwined, says Jezerc.
“[Compliance] has taken on heightened importance.” she says, “as the new Medicare guidelines require that the patient exhibit compliance in the first 90 days in order for the HME provider to receive payment through the entire 13-month rental cycle as well as the revenue potential associated with ongoing supply replacement for sleep patients.”
Terry adds that the focus on compliance is a positive thing for the industry and for the patients. “It means that the HME providers are rewarded for their efforts in improving patient care, patients receive good long-term therapy and the payers are spending wisely on therapy that is being used. It is a win-win-win,” he says.
“Because compliant patients are receiving successful therapy for the long-term, they also require new masks, tubes and other consumables to keep their equipment running at peak performance and hygiene. This is another win for the patient who gets the best therapy, and for the HME provider who has ongoing business from this patient.”
Jezerc stresses that in the face of the current market challenges, providers need to look at growing revenue opportunities. “The bottom line is it makes more and more sense to invest in a strong compliance strategy, starting with picking the right products at set-up, that will help the patient accept and succeed with the therapy,” she says.
Patients who are being treated for SDB need initial and ongoing education and support to be compliant. It is a fluid process that does require spending time with patients, which involves an additional cost. However, the investment should result in increased profits.
“Providers who invest in education and patient follow-up will incur recurring business as far as supplies and will have the goodwill of the referral community as they and their patient communicate success to physicians,” says Messenger. “If your patient is compliant, it means you are touching your patient during that interaction and you can determine if they need additional supplies.”
Enhancing Success
The large population of undiagnosed patients also offers a significant opportunity for the HME industry. For providers who are currently involved in the sleep market, there are indeed ways to grow their programs, enhance patience compliance and strengthen referral source relationships. The good news is that you do not have to do it alone. Many manufacturers offer programs and services that can assist providers in growing their businesses.
According to Terry, ResMed has several programs designed to help providers, including: outreach programs to communities with a high prevalence of SDB, such as those with diabetes, heart failure and hypertension; screening programs with its ApneaLink diagnostic device; improving objective compliance with its ResTraxx wireless compliance monitoring system; and programs and products focused on trailing business with replacement masks, cushions and tubing.
Likewise, Respironics has developed materials that support HME providers' efforts to educate and motivate physicians. Its EncoreAnywhere compliance data management system enables HME providers and physicians to access and act upon common patient data to help patients achieve therapy success.
The company also offers several provider support programs, such as a supply replacement program and its Flex Promise Program, which helps providers move struggling CPAP patients to BiPAP therapy.
“HME providers can and should play a critical role in educating primary care and other physicians about the importance and benefit of screening their patients for OSA and sending them for sleep studies as appropriate,” says Jezerc. “This will be key for continuing to grow the market.”
Messenger advises providers to provide educational programs — and to partner with sleep labs to do so.
“One of the best models I have seen involves HME providers teaming up with sleep labs to offer educational sessions. It creates great goodwill, and the labs are more than happy to participate,” he says.
While the opportunities that exist are substantial, providers also must focus on outcomes.
“As with many things in life, much comes back to focusing on the basics: patient education, set-up with the right therapy and interfaces to support patient success, compliance data management and early intervention to help patients achieve therapy success,” says Jezerc. “Once compliance is achieved, this creates a platform for ongoing supply replacement and for marketing this successful track record to referral sources.”
Compliant patients are life-long patients. They are also grateful patients when it goes well.
"Enjoy what you are doing for these patients. You are making money and you are returning these people to a life they can truly enjoy," says Messenger. "You are giving them their life back, but remember that compliance and follow-up is essential. If you can't do that, then maybe sleep is not for you."
Experts Interviewed
Gretchen Jezerc, director of U.S. marketing, sleep disordered breathing, Philips Respironics, Murrysville, Pa.; Bob Messenger, RRT, product manager, sleep products and clinical manager, respiratory products, Invacare Corp., Elyria, Ohio; Lori Margolin, director of sales and customer service-USA, SleepNet Corp., Hampton, N.H.; and Drew Terry, senior director of product management for sleep, ResMed Corp., San Diego.
Solutions for Small Patients
Recently, stories about children and the prevalence of sleep disorders have hit the headlines. HomeCare asked three manufacturers about products geared toward children and how HME providers can reach out to this market.
"In November 2006, the Respironics BiPAP S/T and BiPAP AVAPS were cleared by the Food and Drug Administration as a system with the Profile Lite Youth Nasal Mask to treat sleep disordered breathing and respiratory insufficiency in children who are seven years or older and greater than 40 pounds. We continue to invest resources to develop new and innovative products to treat this growing segment of the population. Additionally, Philips Respironics is working with the appropriate regulatory bodies to increase the age range for which our products are cleared. Home care providers can reach out to this growing market, particularly through large pediatric practices and key children's hospitals, emphasizing their ability to continue servicing these pediatric patients' OSA therapy needs in the home over the long term as these patients grow and change."
— Gretchen Jezerc, director of U.S. marketing, sleep disordered breathing, Philips Respironics
"ResMed was the first manufacturer with a system specifically cleared for the treatment of children, including the Kidsta mask. This mask is designed with specific child-friendly instructions and graphics that make using therapy easier for children. We highlight the Kidsta mask in our commercial outreach efforts at trade shows and other venues to support the awareness and treatment of sleep disordered breathing in children."
— Drew Terry, senior director of product management for sleep, ResMed Corp.
"SleepNet Corp. is proud to announce the FDA-approved MiniMe Pediatric Mask for the treatment of sleep apnea for children ages 2 to 12. Our patented SoftGel technology, combined with our innovative clear mask design, provides children with a true, custom fit in seconds. We understand the difficulty providers have in fitting children with just the right mask.
"The MiniMe has been on the market for a little over five years now but was originally released as an adult mask. Due to the apparent need in the pediatric market for a comfortable interface, SleepNet answered the call, getting FDA pediatric approval.
"The pediatric market is exploding; it's estimated that 1.7 million kids in the U.S. may require CPAP therapy. That's up from about 200,000 in 1975. There really hasn't been any focus on the pediatric market; the focus has been on adults. We believe that is changing, and as a manufacturer, we will increase our pediatric presence with equipment and support."
— Lori Margolin, director of sales and customer service-USA, SleepNet
