As sleep market grows, referral sources change

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Monday, May 31, 2004

No market segment within the home medical equipment industry is more vibrant than sleep - particularly obstructive sleep apnea therapy. Demand for devices such as continuous positive airway pressure systems has surged consistently in recent years, and as a result, more providers and manufacturers are entering the field.

This escalation in activity has caused some reshuffling in sleep industry dynamics, creating new referral sources for providers to seek and restructuring relationships within the medical community. This state of flux may continue for the foreseeable future as industry analysts believe the sleep market is just now beginning to blossom.

For instance, Waltham, Mass.-based Decision Resources projects that the sleep apnea market will reach $8 billion by 2008. Pharmaceutical sales for sleep disorders such as apnea, insomnia, and narcolepsy are expected to reach $3.2 billion over the next four years.

Likewise, Palo Alto, Calif.-based Frost & Sullivan is bullish on this specialty that is interconnected with other serious health conditions, such as stroke, congestive heart failure and hypertension.

“With more than 20 million people suffering from apnea in the United States alone, the worldwide market potential for CPAP therapy is enormous,” Frost & Sullivan researchers contend. “Currently, only a small percentage of patients have been diagnosed and treated. Growing awareness of the gravity of this disorder and the need for CPAP therapy is expected to drive uptake in the coming years. The study of relationships between cardiac disorders, obesity, and sleep apnea is also expected to encourage patients to seek medical help and subsequently get treated using CPAPs.”

This potential market groundswell poses new opportunities for sleep providers, manufacturers say – starting with referral sources. While pulmonologists have been a staple for referrals, Nancy Nicoll, marketing programs manager for Murrysville, Pa.-based Respironics says primary care physicians and cardiologists are playing an increasingly important role in sleep apnea treatment.

“Primary care physicians are critical. They are the gatekeepers,” she said. “Cardiologists have also taken a much more active role in referrals because of the relationship between sleep apnea and congestive heart failure.”

Sleep laboratories have always been part of the referral base, but the challenge is in keeping up with all the new ones sprouting up, said Ken Godish of Boca Raton, Fla.-based InnoMed Technologies.

“Every market has flagship labs, but the numbers in sleep apnea are getting so big that there is a lot of activity, even at the community hospital level,” he said. “Awareness is definitely going in the right direction.”

tinue to be on the referral source list, Godish said, as well as clinicians at cardiac cath labs.

“Cardiologists are increasingly seeing patients with sleep disordered breathing,” he said. “I’ve witnessed a couple situations where providers have made alliances with cardiac cath labs – which makes sense because some cath labs have sleep labs within them.”

Sleep industry growth appears to be favoring the provider’s role in the continuum of care for this market, as trends indicate they are becoming more prominent in product specification.

“The pendulum has indeed been swinging the provider’s way,” said John Ledek, vice president of respiratory products for Elyria, Ohio-based Invacare. “Provider influence has grown dramatically because they can influence the physician, sleep specialist and sleep lab.”

As a result, Invacare is refining its marketing efforts based on this trend. Sales calls to sleep labs focus on the provider being the “go-to” source for product information and supply.

“Our providers need to win the confidence of the sleep lab,” Ledek said. “We play a role in presenting the products to sleep labs in conjunction with the products the provider carries.”

Conversely, sleep labs can also be viewed as potential competitors to HME providers serving the sleep market, said Ron Richard, vice president of marketing for the Americas for Poway, Calif.-based ResMed.

“More sleep labs are interested in become [HME] providers – there are a number of labs wanting to vertically integrate the model for diagnosis, therapy and follow-up,” he said. “They want to get into the therapy end and provide care for a wide range of sleep conditions.”

Still, even if labs are morphing into other therapies and points of care, sleep providers shouldn’t lose sight of the fact that “it’s the specialists who play the critical role in getting patients diagnosed and treated,” Nicoll said.

HME providers also need to think about how they serve patients with co-morbidities, such as obesity, and promote that to referral sources, Richard said.

“Dealers specializing in bariatric equipment and services have a marketing advantage because the link between obesity and apnea is strong,” he said. “By furnishing bigger beds and chairs in tandem with sleep therapy for bariatric patients, the provider is offering the entire package to physicians.”

Patient compliance with CPAP programs has been and continues to be paramount in treating sleep apnea. Much of the new technology – such as comfortable, form-fitting masks – is geared toward patient acceptance. Providers who offer this new breed of CPAP mask are more likely to impress referral sources, said Christian Kiely, homecare product manager for Laguna Hills, Calif.-based Fisher & Paykel Healthcare.

“With the onset of these new technologies, it is important for the provider to choose products they can promote to the referral source that will improve compliance and provide ease of use for their patients,” he said. “It is also important for the provider to not lose sight of the fundamentals in providing products that balance clinical benefit, cost of technology and reimbursement opportunities.”

Nicoll agrees that providers should emphasize the importance of CPAP mask comfort as a catalyst for compliance. Moreover, maintaining close communications with the prescribing clinicians during the course of CPAP therapy ensures repeat referrals, Nicoll added.

“Communication is the basis for quality patient care,” she said. “The provider needs to keep in close contact with the referral source each step of the way and they need to make sure that the care plan gets expedited efficiently.”

Sleep providers shouldn’t forget the payers in the referral source equation, either, Godish said.

“Payers – specifically case managers and plan administrators – should be a key part of any referral source strategy,” he said. “Without access to that payer, you’re at a competitive disadvantage.”
Category: Obstructive Sleep Apnea
Key Referral Sources:

Pulmonologists; cardiologists, ear, nose and throat (ENT) specialists; primary care physicians; internal medicine practitioners; managed care companies (case managers and plan administrators) and sleep laboratories.

Effective Marketing Techniques:

- The tremendous growth in the sleep market has expanded the range of potential referral sources. For instance, cardiologists have gotten more interested in sleep therapies because of the link between sleep apnea, hypertension, stroke and congestive heart failure. Seek them out.

- Sleep lab profiles are changing - learn to recognize them. For instance, they may be located within community hospitals or as part of a cardiac cath lab.

- Consider how other HME products can dovetail with sleep apnea. Bariatric products, for example, are well suited for obese apnea patients.

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