The Sleep Market 2007

• By Deborah Cooper
• Mar 01, 2007

Industry analysts believe that the sleep therapy market has been growing in excess of 25 percent each year and forecast that growth to continue throughout 2007. All players in the market, from the manufacturers to the HME providers, agree that this market will continue to surge.

“More patients are going into sleep therapy,” says John Ledek, VP and category manager, Respiratory/Sleep, Invacare Corp. “It used to be nobody knew anybody using a CPAP. Now you probably know a couple of people with CPAP success stories. Many more primary care physicians are asking questions about sleep apnea as a routine part of physicals. Good news spreads fast. That’s driving the market and will continue to drive it.”

Not all of this growth has been planned. For some providers, the market has expanded organically as other areas of their business have grown. “We have always done sleep therapy but never by design,” explains Leslie DeFelice, president and CEO, DeFeliceCare Inc. “When we went into respiratory services, there was always strictly a focus on home oxygen therapy and then the pharmacy. We would do CPAP and bi-PAP along with it.”

Reimbursement cuts in other areas of respiratory, notably oxygen therapy, have been one of the driving forces for HMEs to grow their sleep business. “Like many others, you see cuts to oxygen and Medicare, and you start to put more of an emphasis on sleep,” DeFelice says.

Emerging Areas of Interest

As the market expands, awareness inside and outside of the medical community has simultaneously grown. Numerous clinical studies published in recent years have offered strong evidence linking sleep apnea with co-morbidities such as diabetes, cardiovascular disease and stroke. As a result, sleep disorders are flying high on the radar of primary care physicians.

One area just starting to catch hold is the diagnosis of complex sleep apnea. “We’re starting to learn more about the complex sleep apnea patient,” explains Ron Richard, senior VP, Strategic Marketing Initiatives, ResMed Corp. “A lot of research is being done trying to understand how to treat and manage these patients. They either have central apneas prior to undergoing a sleep study that could be related to cardiovascular disease; or when you titrate, central apneas start to emerge because carbon dioxide levels become unstable with the initiation of CPAP.” The demographic for these patients is also different, Richard adds. They tend to be slightly older and are possibly also diagnosed with compounding factors such as hypertension or diabetes.

Sicker patients are coming into the sleep arena, Richard says. As more physicians become educated about sleep apneas and learn how to manage these patients, referrals from specialists such as endocrinologists and cardiologists have increased.

Patient satisfaction and efficacious treatment also need to keep pace with the sleep market. “One of the challenges is to continue to diagnose and treat patients with the right model. Some people are getting into the business that are not experienced in this area,” says Gretchen Jerzerc, director of marketing, Sleep Disordered Breathing, Respironics. “It’s not the most natural type of therapy. We’ve got to be certain people are trained, whether that’s the physician, the provider or the sleep lab technician.”

Tech Developments Boost Compliance

“The growth in public awareness of sleep disorders has generated a higher level of patient expectations,” says Ledek, of Invacare. “People are looking for convenience, ease of use, more options, and devices that generally fit into their lifestyle in the best way possible.”

Compliance remains the Holy Grail of the sleep market. As more people are diagnosed, the pressure for successful outcomes continues to grow. “There’s increasing pressure on everyone involved to demonstrate that we’re achieving the end point — for example, avoiding cardiac disease and avoiding metabolic disorders that arise from untreated sleep disorders,” says Steve Birch, director of marketing, Sleep Diagnostics and Therapeutics, VIASYS Healthcare Respiratory Care. “If we’re not addressing compliance, then all the investment from the industry is not going to pay off.”

Several recent technologies have helped providers achieve better compliance. On the device side, for example, Respironics’ BiPAP Auto allows the provider to place the device on without sending the patient to the sleep lab. The device is designed to make the conversion process to auto bi-PAP easier. Other devices, such as Invacare’s Polaris TR and VIASYS’ BreatheX, emphasize convenience and portability.

On the interface side, most suppliers have, by now, recognized the need for comfort and offer a wide variety of options, from the nasal pillow to the full-face mask. The latest product from Respironics, the OptiLife, is a low-profile mask consisting of only five pieces, which the company says makes it a “nobrainer” to fit and maintain. Invacare has developed SoftX technology, which makes it easier for patients on CPAP therapy to exhale.

“I do see compliance improving, and part of it is driven not only by referral sources looking for information or data about compliance, but also by the provider matching the right interface with the patient,” Ledek says. “Early success within the first four or five nights is about 70 percent of overall success.”

For HME providers such as DeFeliceCare, compliance is about making sure we do the best job in our region, says DeFelice. The company has opted to use medSage OSA software to help achieve this goal. “It’s going to increase communication and the number of contacts with our customers,” says DeFelice. “The software provides 24/7/365 feedback directly from them.”

Communication is the key, Reliable Medical Supply owner Jeffrey Hall says, “The key is staying in touch with patients, being available to answer questions, and following up to make sure they are using the machine. If they’re not, then we offer more education to the patient on the need for their treatment.”

Patient Education

The market cannot rely on technology alone. Skilled care and better patient education are important contributing factors. “If there’s a willingness and a desire by the patient to be treated and attention from the home care provider, there is no reason the patient shouldn’t be compliant,” says Mark D’Angelo, VP and general manager, Sleep Therapy Group, Respironics. It’s not just getting them on the cheapest and fastest device, he says. “You have to spend a little time with the patient and get them on the appropriate equipment.”

The Sleep Manufacturers’ Alliance (SMA), an informal alliance of eight manufacturing companies with common interests, will circulate a compliance guide in the next few months, according to Executive Director Phil Porte. This guide hopes to improve the education of the patient and the patient’s spouse. The guide will be available on the group’s Web site at www.sleepalliance.org.

Other industry societies are focusing on patient education. The American College of Chest Physicians (ACCP), for example, is working on a paper that looks at better standards of care related to improving patient education and compliance. “More needs to be done in the area of patient education, about why it is important for patients to manage themselves,” Richard of ResMed says. “Some of this has to be on the patient to do what’s right.”

Remote Monitoring

Another area with great potential for compliance is remote monitoring. It’s often a subject for discussion among providers and suppliers, and some versions of it, such as smart-card technology, have been around for several years. “We have received great feedback about the ease of use of reports and the ability to track and advise patients,” D’Angelo of Respironics says.

But not every manufacturer and every device has smart-card capabilities. New approaches are entering the market. Thanks to wireless technologies and the Internet, it appears that remote monitoring is on the verge of finding greater acceptance. Internet companies set up portals with communication devices that can be put in a patient’s home. These can monitor glucose, weight and oximetry, among other vital stats.

“The easiest and most accessible route for the industry is to become a node on an existing infrastructure like the Internet or cable TV,” Richard says. The point to all this is “intervening sooner to offset the long-term health care costs.”

“I think wireless is probably going to be the big daddy of them all,” agrees Tom Pontzius, president, Nationwide Respiratory, The VGM Group. “Because it’s something that is becoming less and less expensive, it offers the opportunity for HMEs to enter the sleep market in the diagnostic portion, and many of them will take advantage of that.”

Overall, this is “something the whole industry is looking at,” adds Ledek, of Invacare. “The challenge is finding the cost-effective technology that the referral sources want.” Ledek predicts that the fall Medtrade show will see more remote monitoring systems come to the marketplace.

Other Opportunities

HMEs may be overlooking additional opportunities in their sleep businesses. The replacement mask and accessories market should be carefully considered. Some suppliers, such as Respironics, proactively partner with providers in a resupply tracking program to help them build their resupply business. The company views this as a great opportunity if HME owners can find a way to capitalize on it, such as looking at how goods could be packaged together.

“It’s not just limited to the interface side,” Jezerc says. “After five years, they should be looking at getting a new device, and this is supported by reimbursement.”

Professionally, there are great opportunities for respiratory therapists. There is currently a shortage of polysomnograph technicians. Others predict more opportunities for nontraditional diagnostic testing and home-sleep studies. Still others believe that in three to five years, the sleep market could develop into more consumer-oriented opportunities, whereby sleep could become more retail like eyeglasses.

“You could walk in and get anything you needed, from a CPAP to a Tempurpedic pillow,” Richard says. “You’d have to have a prescription, just like eyeglasses. To me, it’s a parallel model.”

A Look at the Future

The awareness of sleep disorders in general in society helps remove the stigma of CPAP,” says Steve Birch, VIASYS. “Now, when we’re at tradeshows, it’s not uncommon for someone to approach us and say they are a CPAP patient. There are also a number of employees here on CPAP. In the past, no one knew about it. It certainly helps to spread the word.”

There is little doubt that the sleep market will continue its phenomenal upswing. Although it remains to be seen how competitive bidding will affect the sleep market, there are still abundant opportunities to jump in for those who have been sitting on the fence. The nature of the HME sleep business may certainly change as new devices come
to the market, new technology eases compliance and patient awareness continues to spread.

Sleep affects everybody, so unless an as yet unknown silver bullet appears, the need for quality service, effective therapy and ongoing patient care is not going to go away in the foreseeable — or unforeseeable — future.

This article originally appeared in the Respiratory Management March/April 2007 issue of HME Business.