Until recently, most primary-care physicians had no idea that three simple words could change their approach to treating some of the nation's top killers:
by Brook Raflo, Senior Writer

Until recently, most primary-care physicians had no idea that
three simple words could change their approach to treating some of
the nation's top killers: stroke, hypertension, heart disease and
diabetes. But thanks in part to the nation's leading sleep-product
manufacturers, physicians are beginning to understand the
far-reaching implications of sleep-disordered breathing. The
question, “Do you snore?” now is standard fare in
examining rooms from Tampa to Topeka, as millions of Americans are
waking up to the importance of uninterrupted sleep.

The tip of the sleep-market iceberg is protruding from the
water, but to uncover the market's true depths, manufacturers must
address three obstacles to growth: awareness, diagnosis and

By some estimates, there are as many as 10 million undiagnosed
sleep apnea sufferers in the United States. Light sleepers who are
chronically tired, many of these people dismiss their snoring as an
annoyance. Their physicians, who spent little time studying
sleep-disordered breathing in medical school, often do not connect
these symptoms to the patients' other medical problems, and
obstructive sleep apnea goes untreated. To avoid this scenario,
companies like ResMed, Respironics, Sunrise and Fisher & Paykel
are launching innovative programs to raise awareness among both
clinicians and consumers.

However, teaching patients and clinicians about the dangers of
OSA is only the beginning, the manufacturers say. The logical next
question is, “How will the market diagnose all those who need
to be tested?” With greater awareness comes greater demand,
yet some diagnostic labs already are reporting month-long waiting
lists of potential OSA sufferers who need a sleep test.

Additionally, despite data that suggests continuous positive
airway pressure therapy is safe and effective, many patients give
up on treatment within the first two weeks, citing discomfort and

Such are the challenges inherent in a young and promising
market, sleep-product manufacturers say. To address these
challenges, manufacturers must become teachers, consumer advocates,
researchers and innovators. Ron Richard, ResMed's vice president of
marketing for the Americas; Bill Post, president of Respironics'
home care division; Nick Macmillan, global sleep products manager
for Sunrise/Devilbiss; and Steve Moore, director of marketing at
Fisher & Paykel; explain below why their companies are up to
the task.

HomeCare: How is your company serving as an advocate
and teacher in the sleep-products market?

Ron Richard: Our Sleep Foundation, a nonprofit
organization with a separate board of directors, accepts, reviews
and funds applications for research projects. This year, we have
funded four studies, including two whose results the Sleep
Foundation recently released: The National Football League study,
[which found that even young, physically fit men can suffer from
OSA], was trying to get some high-profile awareness among the guys
who watch sports. These guys may be young, but many of them are
overweight and hypertensive. Another study showed that, with
effective CPAP therapy, you could lower your blood pressure by as
much as 10 millimeters, and not just during the night. [The
treatment] had a long-lasting effect on daytime blood pressure as

[ResMed] also is sponsoring chat rooms on the Internet. We host
a 1-to 1.5-hour ask-the-expert-type forum. We typically have 200 to
300 patients sign up at a time. We're exploring [consumer]
publications like Men's Health and Maxim
places where we potentially could place articles or ads.

Finally, we are getting more active with the American Sleep
Apnea Association's AWAKE support groups — small, self-funded
groups of patients with common problems. There are several hundred
of these groups across the United States.

Bill Post: Advocacy is part and parcel of the nature of
the market. Awareness is one of the key drivers. We work to keep
the physician base and provider base well informed. At the same
time, we collaborate with and support a variety of independent
agencies and groups focused on the awareness issue: the National
Sleep Foundation, the American Sleep Apnea Association and the
American Academy of Sleep Physicians, to name a few. We support
these agencies financially and take a great interest in their work
and success.

We also focus on research and development, which is really all
about enhancements to positive pressure modality. Those
enhancements are what drive comfort, compliance and continued
efficacy in therapy. [Respironics'] C-Flex technology is a perfect
example. [With CPAP], you've got this forced air to keep the airway
open. That is fine on inspiration, but it makes for some discomfort
on expiration. C-Flex modulates the application of pressure,
relaxing air pressure during expiration. It drives a whole new
level of patient comfort.

Nick Macmillan: In raising awareness, our primary focus
has been advocacy with the National Sleep Foundation and [the
organization's] drowsy driving campaign. Sunrise Medical has made a
financial and in-kind commitment to support public awareness of
this issue.

Drowsy driving is not always connected to sleep apnea, but there
obviously is a strong correlation there. It's estimated there are
approximately 100,000 police-reported crashes involving drowsiness
and fatigue per year. Fatalities are estimated at approximately
1,500 per year, or 4 percent of all crash fatalities. That's in
addition to about 71,000 injured in fall-asleep crashes per year.
This represents $12.5 billion in monetary losses each year —
not only from the accident, but for the health care and missed
work. What's interesting is that [the above statistics] represent
only “reported” crashes. There probably are many more
incidents that go unreported.

Most of our research revolves around e-compliance, which allows
you to set up the CPAP in the home and attach it to a Smart Track
that automatically downloads usage data. The HME provider, the
sleep center and the physician can view this data twenty-four hours
a day, seven days a week.

Steve Moore: Some of our current initiatives focus on
heated humidification, and the role that [heated humidification]
plays in all areas of respiratory support, including
sleep-disordered breathing.

HC: What are some of the challenges that this market
faces, and how is your company working to overcome these

RR: As diseases become more diagnosed, the big challenge
is that [the products are] being driven into a commodity space.
There is a lot more pricing pressure from payers.

To overcome this challenge, we've taken the high road in
developing products, recognizing that sleep-disordered breathing is
a chronic illness that requires disease management.

BP: The challenges of sleep apnea include: awareness, the
clinical recognition of comorbidity, the diagnostic universe and

Medical literature is demonstrating there is link between OSA
and conditions like heart failure, hypertension and diabetes. We're
in the early stages of fostering clinical acceptance of that

However, the challenge to fulfill the demand for sleep testing
grows in parallel with this raised awareness. The more we're
equipped to diagnose, the more likely it is that [diagnosis] will
fuel market growth. [Finally], the challenge of driving patient
compliance continues to be evident, regardless of how efficacious
the therapy has been proven to be. The solution is about adding
degrees of comfort and utility that allow patients to comply.

NM: I think the three main challenges that this market
faces are the continuing backlog at sleep centers, reimbursement
for HME providers and compliance.

We deal with the second two [challenges] more than with the
first. [E-compliance] improves a provider's efficiency — so
the provider can use the Internet instead of making phone calls or
visits — and become a more-efficient provider of care. If
[providers] are not operating in the black, they won't be around,
and everybody will lose.

The clinical research clearly supports the fact that CPAP
compliance is determined early on — usually within the first
two weeks. With e-compliance, providers are able to get timely
information about compliance automatically.

SM: One of the bigger challenges is to ensure initial
acceptance and long-term compliance with therapy. Our product
development is focused in these areas.

HomeCare: What is the current reimbursement climate
for sleep products? Are payers open to reimbursing new

RR: I just got back from the [Statistical Analysis
Durable Medical Equipment Regional Carrier] office, and they are
open to reimbursing for self-adjusting auto titration devices.
These devices adjust pressure all during the night, depending on
the patient's needs. This year, they put in place higher
reimbursement for full face masks for the first time.

For existing, core products, reimbursement is pretty stable and
has been for three years.

BP: I think reimbursement is broadly favorable. I do
think [payers] are open-minded to reimbursing new technologies,
provided that the cost-to-benefit relationship is clearly
understood and defensible.

Down the road, reimbursement will have to begin to embrace the
value inherent in [treating OSA]. If it's clearly understood that
OSA is at the heart of a heart condition, the value of OSA
treatment changes significantly.

NM: To a certain extent, the climate looks favorable for
new technologies. CPAP and respiratory equipment has seen a decline
in reimbursement, but when you look at processes, you can still
keep [sleep products] profitable.

We have some payers interested in e-Compliance and willing to
pay for it. Managed care companies appreciate the fact that, as
compliance improves, health care costs and hospital stays

SM: Reimbursement is slowly improving, and payers are
becoming aware of new technologies that improve patient outcomes.
Medicare has recently taken great strides in this area.

Survey Points to Continued Growth in Sleep Market

Today in America, there could be as many people suffering from
sleep problems as there are receiving Medicare benefits, according
to surveys from the National Sleep Foundation. Yet more than 60
percent of adults say that a physician never has asked about the
quality of their sleep.

While this statistic may sound daunting, manufacturers and
providers see the challenges that face the sleep-product market as
an opportunity for tremendous growth.

In mid-January, 247 of HomeCare's readers responded to an
electronic survey about the sleep market. Their responses to a few
of the survey's questions appear throughout.

During the past 12 months, has your revenue from
sleep-disorder products:
Status No. of Responses % of Respondents
Increased 152 71.4
Stayed the same 52 24.4
Decreased 6 2.8
No answer 3 1.4
Total 213 100
Which one of the following best describes your business
Business Focus No. of Responses % of Respondents
HME Provider 98 39.7
Specialty HME 15 6.1
HME with Home Health Agency 9 3.6
HME with Respiratory Therapy 95 38.5
Pharmacy with HME 24 9.7
Other 6 2.4
Total 247 100
How many registered respiratory therapists do you have on
staff full-time?
No. on Staff No. of Responses % of Respondents
None 65 26.3
1 employee 57 23.1
2 employees 33 13.4
3 employees 16 6.5
4 or 5 employees 23 9.3
More than 5 employees 26 10.5
No answer 27 10.9
Total 247 100
During the next 12 months, do you anticipate your revenue
from sleep-disorder products will:
Status No. of Responses % of Respondents
Increase 175 82.2
Stay the same 30 14.0
No answer 8 3.8
Total 213 100
Which of the following sleep-disorder products do you sell
or rent?*
Rank Sleep-Disorder Product % of Respondents
1 CPAP Units 99.5
2 CPAP Masks 97.7
2 CPAP Headgear 97.7
3 Humidifier Systems for Nasal CPAP 97.2
4 CPAP Filters 96.7
5 Bi-level PAP 93.4
6 CPAP Moisturizers/Gels 57.7
*A total of 213 readers responded to this
What percentage of your total annual revenue do
sleep-disorder products represent?
% of Annual Revenue No. of Responses % of Respondents
1 to 5 31 14.6
6 to 10 37 17.4
11 to 15 21 9.9
16 to 20 29 13.6
21 to 25 19 8.9
More than 25 36 16.8
No answer 40 18.8
Total 213 100
Do local sleep study labs refer patients to you to
purchase products?
Referrals No. of Responses % of Respondents
Yes 189 76.5
No 52 21.1
No answer 6 2.4
Total 247 100
Do you refer customers to local sleep study
Referrals No. of Responses % of Respondents
Yes 141 57.1
No 98 39.7
No answer 8 3.2
Total 247 100
How many sleep study labs are there in your market
No. of Labs No. of Responses % of Respondents
0 2 0.8
1 6 2.4
2 30 12.1
3 35 14.2
4 38 15.4
5 17 6.9
6 15 6.1
7 1 0.4
8 10 4.0
10 5 2.1
More than 10 45 18.2
Don't know 36 14.6
No answer 7 2.8
Total 247 100
Do you offer any in-home sleep study services?
Services No. of Responses % of Respondents
Yes 20 8.1
No 221 89.5
No answer 6 2.4
Total 247 100

The complete results of HomeCare's 2003 Sleep Survey are
available for purchase online. Please visit our Web site at