The negative effects of sleep apnea are becoming more apparent and better documented. Studies show a significant correlation between sleep apnea and both heart disease and stroke.¹ In addition, other studies suggest that stroke or heart attack rehabilitation patients have less chance for reoccurrence if the patients sleep while using continuos positive airway pressure (CPAP) or similar devices.² When you add these patients to those with the already generally accepted obstructive sleep apnea (OSA) diagnosis and a prescription for CPAP and variable positive airway pressure (VPAP) devices, it becomes apparent that the market for HME dealers is large and will continue to grow.

Already, many patients are underserved. Nearly as common as asthma, OSA affects an estimated 18 to 25 million US citizens. Data from the National Center on Sleep Disorders Research, National Institutes of Health in Bethesda, Md, indicate that about 4% of middle-aged men and 2% of middle-aged women meet the criteria for sleep apnea syndrome.

This means opportunity for dealers. According to the consulting and research firm Frost & Sullivan of San Jose, Calif, the sleep apnea diagnostic and therapeutic market generated revenues of $386 million in 2000 and is projected to pass the $1 billion mark by 2007. In addition, HME dealers report that often CPAP and VPAP patients also spend extra money out of pocket for various masks and other treatment-related items. These items have good profit margins and keep the customer coming back to the HME store.

Reimbursement for CPAP and VPAP has been centered on traditional insurance. In October of last year, the Centers for Medicare & Medicaid Services (CMS) announced that it planned to extend coverage for CPAP to those with milder apneas than the previous policy, which only covered those with moderate to severe apnea. An effective date has yet to be set.

As with all CMS directives, there is both good and bad news. The good news is expanded coverage. The bad news may be that getting around excessively restrictive protocols might prove difficult. Currently, CMS requires testing to take place at sleep study laboratories. Waiting lists for testing at these types of facilities are already very long, and the CMS requirements will only make the lists longer.

The stance of CMS contradicts studies that show home testing and other related testing at a location other than a sleep laboratory are very accurate. One study reviewed randomly selected patients’ test results and found a 96% accuracy rate in an at-home sleep study with a recognized home sleep monitoring system.³ Using at-home studies could reduce the backlog of patients needing sleep testing. In addition, in most cases the at-home study saved at least 50% of the cost when compared to the sleep laboratory. These two factors may force CMS to reevaluate its position in this matter.

There are many opportunities for HME companies to take advantage of the growth in the sleep apnea market. If your company has respiratory therapists on staff, expanding into the sleep market makes sense. Seeing patients with other problems, especially those that have suffered a stroke or heart attack, can identify new sleep apnea patients. Offering the services of your company to physicians with sleep apnea patients can form the base of an expanding niche market. Your standard sales force or a respiratory professional can sell sleep supplies.

Of course, some of your potential customers may be involved with their own sleep laboratory and may therefore be unwilling to allow you to provide equipment. However, most hospitals my clients have called on are willing to have local HME providers service patients with both equipment and supplies. Over time, the sleep apnea patients are likely to develop other needs for HME. If you are already providing a patient with apnea equipment and supplies, then it is likely that you can provide any new equipment as well.

Finally, HME companies have found that providing sleep apnea equipment can improve relations with referral sources. Since the therapist is often closely involved with the patient in treating sleep apnea, the therapist can report back to the referral source about the condition of the patient. Because many physicians appreciate a company that is a good source of timely patient information, it will likely be the first one the physicians think of for additional nonsleep referrals.

Getting into the sleep market requires a large investment in sales time and inventory because one of the keys to getting referrals is carrying a large variety of sleep masks from three or more companies. While each CPAP manufacturer can claim some device advantages, the differences may not be critical to the referral source or the patient. The mask is a very personal item, and patients appreciate being able to try on several masks. While manufacturers say their devices work best with their own masks, masks from many manufactures may fit with and work with a variety of machines, and the masks of one manufacturer may work better with a specific patient than masks from another company.

The need is recognized and the opportunity is evident. Many HME providers will keep their companies growing and their profits up by providing sleep apnea equipment, accessories, and disposables.

Steve Lutzker is principal consultant with The Lutzker Group Inc, of Escondido, Calif. He can be reached at (760) 480-9060 or at consultlutzker@sprynet.com

References
1. Good DC, Henkle JQ, Gelber D, Welsh J, Verhulst S. Sleep-disordered breathing and poor functional outcome after stroke. Stroke. 1996;27:252-259.
2. Peker Y, Hedner J, Johansson A, Bende M. Reduced hospitalization with cardiovascular and pulmonary disease in obstructive sleep apnea patients on nasal CPAP treatment. Sleep. 1997;20:645-53.
3. Claman D, Murr A, Trotter K. Clinical Validation of the Bedbugg™ in Detection of Obstructive Sleep Apnea. San Francisco: American Academy of Otolaryngology—Head and Neck Surgery Foundation Inc; 2001:227-230.