Respondents report growing pains in sleep market

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Monday, November 21, 2016

NEW YORK – HME providers report significantly slower patient volume growth for sleep therapy devices in the fourth quarter “HME Sleep and Oxygen Survey” conducted by investment bank Needham & Co. and HME News.

Respondents saw sleep patient volume grow 0.8% in the last 12 months, compared to 3.6% in the previous survey period. They expect volume to grow 2.5% in the next 12 months, compared to 6% in the previous survey period.

Respondents also indicated that flow generator prices declined 3.8% over the long term, compared to 3.2% in the prior survey period, and mask prices declined 4.4% vs. 2.4%.

“We think this is the result of the latest Medicare reimbursement cuts, and we expect pricing to continue to worsen given the additional cuts that occurred in the second half of 2016,” wrote Mike Matson, an analyst at Needham, in a report.

Additionally, for the first time in seven surveys, respondents report higher ratings for Respironics flow generators than ResMed flow generators. They expect ResMed’s share of flow generator purchases to decrease by 6.1% and its share of mask purchases to decrease by 4.8%. They expect Respironics’ share of flow generator purchases to decrease by 1.1% and its share of mask purchases to increase by 0.7%. Other small companies are expected to increase their share of flow generator purchases by 7.5% and their share of mask purchases by 5.2%.

For vents, respondents expect a recent Office of Inspector General report detailing a spike in billing to slow growth in the product category. They reported Respironics has the most market share in vents (52%), followed by ResMed (40%) and other manufacturers (8%).

For oxygen therapy devices, respondents expect POCs to increase from 18.6% to 27% of the market over the next 12 months. Inogen’s G3 was the highest rated POC by respondents with a score of 6.3 out of 7.

The survey was based on 81 respondents.