Sleep referrals mount up

YARMOUTH, Maine - Look for the sleep market to approach a tipping point in the next few years, with more providers noticing their sleep referrals surpassing oxygen referrals, say industry sources. "If you look at the number of people who are diagnosed with a chronic lung disease and then you look at the number of people who potentially have sleep apnea and all the different co-morbidities it has been linked to--hypertension, diabetes, stroke and cardiovascular disease--you have a ratio of 4:1 of sleep to oxygen," said Ron Richard, vice president of marketing for the Poway, Calif.-based ResMed. A myriad of different factors will come to a head in 2006 and 2007 that will drive the sleep market toward unprecedented growth, industry sources say. Chief among them: increased awareness. More mainstream newspapers and magazines are publishing stories about sleep disorders, and in 2007 the American Medical Association plans to recognize sleep as a specialty, Richard said. "In previous years, the American Academy of Sleep Medicine has been primarily responsible for training and educating physicians to become board certified in sleep," he said. "Now that the AMA is taking this over, it falls under the governance of the internal board of medicine, so you're going to see a lot more physicians attracted to this field." Another factor driving growth in the sleep market (thanks to the domino effect of increasing awareness and physicians specializing in the field): more patients diagnosed with sleep disorders, industry sources say. Currently, 95% of patients with sleep disorders remain undiagnosed, according to the National Commission on Sleep Disorders Research. But the media and physicians aren't the only one whose heads the sleep market will turn. There are "rumblings" that insurance companies will increasingly take notice, as well, which will drive even further growth in the sleep market, said Michael Thomas, president and CEO of the Pasadena, Md.-based Sleep Solutions. "Insurance companies are trying to figure out, 'Yeah, sleep is not a massive part of our cost structure, but on a per unit basis, the growth is dramatic,'" he said. Yet, "they're telling us it's harder to beat up on hospitals and sleep labs to lower their costs. As a result, "a lot of insurance companies have been changing their medical policy, in spite of what Medicare has done," he continued. (Thomas estimated Medicare comprises 15% to 20% of the sleep market and private insurance makes up at least 80%.) A factor that may seal the sleep market's spot at the top of the HME industry: proof of its economies, Richard said. "At the end of the day, if we can get people treated for sleep disordered breathing, we know it will save money to the economy in terms of healthcare dollars," said Richard, who pointed out that AAHomecare will publish an "extensive" paper in 2006 that examines treated and untreated patients and the cost savings between the two groups.