CPAP Therapy Alternatives

Consistent with the overall health care landscape, the market for treating sleep apnea is also going through immense changes. Diagnosis and patient sales cycles are being altered due to changing insurance requirements, and patients are becoming better educated—ultimately taking sleep apnea therapy into their own hands. Continuous Positive Airway Pressure (CPAP) therapy is no longer the only viable treatment for sleep apnea, as alternative medical devices such as oral appliances are emerging as mainstream solutions at a seemingly lower cost. The market for providing CPAP equipment is experiencing an evolution, and HME providers must react accordingly to remain competitive under the new rules. Insurance deductibles and polices are playing an increasing role in how patients shop for their CPAP equipment, providing incentives for customers to act in certain ways that influence buying patterns. According to the Kaiser Family Foundation, the average insurance deductible has recently risen to more than $1,100. As a result, insurance companies are influencing the end of the sales cycle. Many patients have abandoned trying to reach their deductibles and are instead turning to lower end CPAP machine models, opting to pay out of pocket for machines that can be found for a fraction of the cost while still providing the same baseline treatment.

Near the beginning of the sales cycle, insurers are changing how the diagnosis for sleep apnea is administered due to the high testing costs. A traditional sleep lab test can cost $1,900 or more per night and as the awareness around sleep apnea grows, insurers are discovering that it is increasingly unprofitable to reimburse for such a test, even if it could arguably be considered as preventive treatment. Home sleep testing has emerged upon the scene and is disrupting the traditional testing industry. The device is shipped to the patient and is self-administered with various sensors for an overnight study. The patient then ships the sleep testing device back to the provider and the results are interpreted by a doctor, eventually communicating the outcome back to the patient. Critics of the technology argue that the practice of allowing patients to test themselves could lead to intrinsic biases and inaccuracies in the testing, but according to a study by the University of Barcelona, home sleep testing proved to be just as accurate as traditional lab testing. Encouraged by these results, insurance providers are either completely replacing the traditional sleep test with home sleep testing, or at least requiring home sleep testing as a prerequisite to traditional sleep testing depending on the results. Many HME providers partner with sleep labs and receive referrals once patients are diagnosed with sleep apnea and enter the equipment buying stage. Given that increasingly fewer patients will be going to a traditional sleep lab to receive their diagnosis due to insurance deductibles, both sleep labs and HME providers will have to compensate for the drop in revenue that will accompany the lack of referrals. Alternatively, the barrier to diagnosis is being lowered significantly which will increase the total pool of consumers in the market to treat sleep apnea. This influx has potential to offset any revenue related declines as a result of referrals if the HME provider can successfully position themselves to attract new customers who have undergone the home sleep testing. The increase in deductibles is not only changing how the diagnosis and sales cycle works, but also affecting the total size of the market. Many patients are searching for lower cost alternative therapies to alleviate their sleep apnea symptoms, and oral appliances might be their answer. These devices have exploded on the market, with dentists and other non-traditional providers identifying this market as a potential source of additional revenue. Essentially, oral appliances fit like a mouth guard and move the jaw forward to maintain an open airway during sleep, mitigating the general collapse associated with sleep apnea. They are non-invasive and less cumbersome than traditional CPAP therapy. For every oral appliance sold, the total market for CPAP equipment shrinks incrementally both in the up-front purchase of the machine as well as the recurring revenue generally associated with purchasing tubing, filters, etc. There are about eighty different oral appliance devices on the market that are labeled as a lower cost option to traditional CPAP therapy. Given that they are typically less expensive and do not have any replacement parts to maintain, many patients are willing to try the oral appliance since it seems like a low risk option to move away from CPAP equipment. This trend provides both a challenge and an opportunity for HME providers because while an existing market shrinks, a new market is opening through which providers can continue to treat patients’ sleep apnea symptoms. If patients are not actively switching to oral appliances, then at the very least they are extending the life of their equipment through the use of a host of cleaning and care products that have appeared on the market over the last several years. These include tube cleaning brushes, mask sprays, mask wipes and more. Patients have been educated that they can extend the life of their products by regularly cleaning their products. For example, facial oils break down the gel and silicone in the mask prematurely, which would theoretically prompt a new mask purchase. However, patients still tend to prolong their next purchase, instead defaulting to subpar therapy through mask leaks and residue buildup in the tubing. Because of this trend in consumer behavior, cleaning and care products are not necessarily extending time between purchases. Instead, they are expanding the upselling market that can accompany filter repurchases and provide an additional revenue source that is built around the core CPAP therapy purchasing model. HME providers can take advantage of this trend by educating their patients on the various benefits associated with regular cleaning, such as extending the life of their products, promoting proper hygiene and removing unwanted odors. Given the nature of medical products, it is in the patient’s best interest to maintain sanitary equipment and receive the highest quality CPAP therapy experience. The common underlying theme among all of these new trends is that key changes in the insurance world are shaping a new landscape for how patients will undergo diagnosis and therapy for sleep apnea. Patient diagnosis is radically changing, and the barriers to being diagnosed are being lowered. CPAP therapy is no longer the sole treatment for sleep apnea, as new devices such as oral appliances have become mainstream solutions with relatively higher usage rates and lower costs. Offsetting frequent CPA- related expenses, cleaning and care products have become popular as patients are becoming more educated about their equipment. While the market is certainly evolving due to changes in deductibles and reimbursement from insurance providers, many new revenue opportunities have presented themselves through which HME providers can thrive in the future.