Stephanie Spehar, Service Line Strategy Advisor
The outpatient space is experiencing heightened competition and sleep medicine has been especially impacted by this trend. With new payment models on the horizon and more providers entering the market, sleep programs must prepare for these changes or risk closing their doors.
Value-based care is placing pressure on sleep programs in two ways. First, providers must focus on managing patients’ comorbidities—in effect, demand for sleep services will surge, as sleep is a common comorbidity for many medical conditions. Second, new payment models will push physicians to provide sleep care in a more cost-efficient manner.
While sleep has always been an outpatient service, hospitals have started experiencing heightened competition. Sensing the demand for sleep care, an influx of non-hospital providers, including privately owned sleep labs and independent physician offices, are entering the sleep market.
Portable monitoring plays increasingly important role
Adoption of portable sleep monitoring (PSM) presents a progressive and competitive strategy for sleep centers. While in-lab polysomnography testing remains the standard of care for diagnosing complex patients, PSM has proven to be as effective in diagnosing obstructive sleep apnea (OSA). For high-risk OSA patients without comorbidities, PSM is intended to replace in-lab testing as the main diagnostic tool.
PSM is seen mostly among early adopters at this point. Despite concerns that PSM will detract from sleep center volumes, hospitals should look to integrate sooner rather than later-- the technology presents a host of opportunities to grow market share and gain a competitive edge in an increasingly saturated market.
Adoption presents opportunities to gain competitive edge
1. Tap into undiagnosed populations
Over 18 million Americans are affected by OSA, though an inadequate rate of diagnosis has led to a large latent demand for sleep services. Sleep programs can capitalize on this untapped market potential and grow volumes by increasing PSM capacity.
2. Introduce cost efficiencies and increase capacity
Sleep laboratories are cost intensive with high overheads. Portable sleep monitors can bring cost efficiencies by allowing sleep centers to conduct additional sleep diagnostics without having to invest in additional space or equipment. PSM will be especially useful for labs at capacity with long waiting lists to screen patients for sleep disorders.
3. Prepare program for imminent reimbursement changes
Many providers are reluctant to adopt PSM, but increased scrutiny and mounting payer pressure may make adoption inevitable. Payers increasingly require physicians to document medical necessity for expensive in-lab polysomnography testing—a trend that is likely to continue in the era of value-based care. Hospitals will have to leverage PSM to screen and diagnose patients without contraindications, or risk losing these cases altogether.
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