Sleep disordered breathing

Wednesday, December 31, 2003

Challenges abound in finicky sleep business
WASHINGTON - Although a swelling market, with annual growth rates of more than 20% over the past few years, providers who offer sleep disorder breathing services still face challenges when calculating their bottom line.

To help providers understand the risks associated with the market, AAHomecare included a special section on sleep in its 2003 Financial Performance Survey aimed at providing an “average” service model for sleep disorder providers.

“The survey is not saying you have to do this or you have to do that. It’s just saying understand and make conscious decisions on which way you want to go with it,” said Dr. William Cron, an economics professor who has been involved in compiling the financial report since 1983.

Analyzing the responses of 94 providers, the report found that only half of initial set-ups are preformed in the patient’s home, with one-third of respondents saying they did setups outside of the home 90% of the time.

“The thing is that home visits are extremely costly,” said Cron. “If you make one or two home visits, you are in all likelihood losing money off that particular patient. I think that was probably the biggest message out of the report.”

Cron also warned that a sleep disorder breathing program’s cost is primarily driven by compliance monitoring. Although most payors and Medicare require no more than 90 days of monitoring, the report found that the industry average was four months.

Despite the challenges, Cron said there is an increased awareness and prevalence of sleep breathing disorders due to people’s changing lifestyles and behaviors.

“It’s a big market, and it’s growing fast,” said Cron. “It’s becoming an important niche in the market. Ignore it at your own risk.”