Home sleep therapy market starts to grow up

Thursday, May 24, 2012

At some point a young, growing business market will reach maturity—it is inevitable. Whether this is the case with home sleep therapy remains to be seen, but signs are pointing in that direction.

The double-digit percentage growth of 10 years ago has slowed down to single digits—between 6% and 8% by ResMed President Mick Farrell’s estimates. 

Still, compared to other sectors of the economy, that growth rate is fairly strong.

Farrell does not believe the market has reached maturity yet—in fact, he thinks it is still in the beginning stages.

“We are at mile one of the marathon with 25.2 to go,” he said. “There are between 40 million and 60 million North Americans with sleep-disordered breathing. We are at most 10% to 15% penetrated into this population.”

Bruce Sher, president of Coconut Creek, Fla.-based InnoMed Technologies agrees that sleep therapy continues to be “a greatly growing market,” though he says there has been “some slowdown due to the economy.” 

Lack of insurance, he says, has prevented some people from getting the therapy they need.

Primary market drivers—sustained demand and heightened apnea awareness—are continuing unabated and should keep propelling the market forward for years to come, he said.

“The demographics are on our side with obesity and the aging population,” Sher said. “And people are paying more attention to sleep apnea now. Many more know what it is now compared to a few years ago.”

In looking at how sleep therapy market growth has progressed, Maura Toole Weis, director of sleep marketing for North America for Murrysville, Pa.-based Philips Respironics, says it has gone beyond merely identifying apnea patients and into keeping existing sleep apnea patients on their therapies.

“Identifying sleep apnea patients remains steady and consistent and there are still unidentified apnea sufferers out there,” she said. “But what’s important is that the patients already on therapy need to continue using it. Good therapy requires good equipment and regular replacement over time. So the re-supply business is actually showing the highest level of growth in this segment.”

Changing demographics

Once categorized as an affliction of overweight middle-aged males, sleep apnea is being diagnosed for all demographic groups now, vendors say.

“Women are being diagnosed twice as fast as men now,” Sher said.

In fact, the “old guy with a big gut” is now pretty much a stereotype, Farrell said.

“We estimate that 40% of those entering PAP or mandibular repositioning device  therapy are female and many have a low body mass index,” he said. “It is not solely the obese male anymore, which speaks to the great screening going on.”

Data can show physicians and referral sources how the demographic base is widening to include those from all age groups and both genders, Farrell said.

“We can show them there are some asymptomatic patients with cardio issues or a post-menopausal female with headaches and depression,” he said.

The key to broader identification, Weis said, is getting physicians to ask the right questions.

“There are questionnaires available for them to ask during physical exams which should raise some red flag issues,” she said.

Eking out dollars

Various Medicare regulations such as competitive bidding and compliance measures are serving as revenue inhibitors for sleep therapy providers. To make up for the payment reductions and delays, providers need to focus more on product replenishment and retail sales, vendors say.

“Replacement is an important source of revenue,” Weis said. “Masks need to be replaced every three to six months and even the CPAP should be replaced every couple of years. Providers are getting pressed from both sides and they need to look at other areas for profit. Re-supply is an option.”

In just the past few months, Carlstadt, N.J.-based Mada Medical has entered the sleep arena and offers a new disinfectant providers can sell retail: the Mada CPAP Wipe, made especially for sleep therapy systems.

Made of 100% pure cotton and all natural cleaning ingredients, the wipes contain no chemicals and produce no odor. It has attracted the interest of both major HME buying groups, MED and VGM, said Bob Sorbello, vice president of sales and marketing.

“We sensed a demand for this product and it is increasing at the retail level,” he said. “We always like to provide products to our dealers that give them a decent return on their investment. This is a great complementary product they can sell for cash.”

CPAP skins have become a popular accessory for ResMed customers, Farrell said. 

The appliqués are designed to fit over the CPAP base unit and come in various styles: sports team logos, cartoon characters, décor patterns and create-your-own photo designs.

“Disney characters such as Sleeping Beauty are big with kids,” he said. “These are a great sales item for providers.”