Dreaming of Better Days

The same issues have been keeping sleep-focused HME providers awake at night for several years now. Competitive bidding and other government requirements are squeezing much of the profit out of the sector and, some say, have slowed its growth. But there is optimism in a rush of new patients — including new demographics and prosperous baby boomers — and in new product developments that make CPAP and other sleep-related technologies more effective than ever. Sleep providers simply have to stay in business long enough to reap the rewards.

“The sleep market has grown steadily for the last several decades from the introduction of the first CPAP mask in the 1980s,” said David G. Groll, chief executive officer of Circadiance, supplier of a comfortable cloth CPAP mask that can boost compliance. “The advent of competitive bidding has really caused a pause, or even a halt, in the growth of the market.” Previously a profitable segment for many DMEs, the sleep market has become more difficult both in terms of lower reimbursements and more stringent requirements to get paid, Groll noted.

There remains a widespread lack of awareness of the high prevalence and serious consequences of untreated obstructive sleep apnea (OSA), said Bernadette McBrearty, ResMed’s vice president of product marketing. For example, many health care professionals are reticent to address the topic of sleep with patients because of concerns about noncompliance with therapy and unlikely positive outcomes, she said. Patients’ ideas of treatment are often based on outdated technologies. “The key to reaching more patients and improving compliance is to leverage existing technologies and tools to drive compliance and demonstrate to patients and health care professionals that a better therapy experience is possible,” McBrearty said.

With more awareness comes more business. Maura Toole Weis, director of sleep marketing for Philips Respironics, says the historical patient mix has been the “tip of the iceberg”—the most severe patients. “Now we are seeing those who weren’t easily identified previously,” she said.

Challenges for a Large Market

Round 1 bids for CPAP were 34 percent lower than the old fees, and Round 2 encompasses more geographic areas and could bring the same or even lower numbers. Insurance and private payers will follow suit with the lower reimbursements. HMEs that lose the bid will see a large part of their sleep-related revenues evaporate.