Respiratory Management

Cover Feature

New Paths: Home Sleep Testing

Sleep Apnea Solutions contracts with employers to provide home sleep diagnostics, building a non-Medicare business.

• By Janis Rizzuto
• Jul 01, 2010

Sleep Apnea Solutions Inc. was founded based on a desire to do business in an entirely different way. “The founder had been in the DME industry a long time as the owner of Oxygen One in Waukesha, Wis., so he had watched all the changes with Medicare,” says Rebecca Olson, RCP, RRT, director of clinical and diagnostic services for Sleep Apnea Solutions. “He had in the back of his mind that there had to be a better ‘mousetrap’ of a business that wasn’t dependant on private insurance and Medicare, because they dictate anything and everything we can do.”

But what could that business be? It turns out that home sleep testing marketed in a business-to-business manner wasthe answer. So in February 2007, Sleep Apnea Solutions (www.hometestingnow.com) was created to provide sleep diagnostics under contract with employers in diverse industries, such as trucking, manufacturing, construction, food service, law enforcement and more. Ferreting out those with sleep apnea results in a healthier, more productive workforce, Olson says. What employer wouldn’t like that?

Targeting employers as payers was unique, and so was the technology Sleep Apnea Solutions was asking those payers to support. Back in 2007, data about home sleep testing was not widely available, and Medicare had yet to give the diagnostic method its approval. Still, all the research was there to support the approach, Olson says, including statistics about the unmet need: approximately 18 million Americans have sleep apnea, and 85 percent are undiagnosed.

“In Waukesha County, we studied how many people between 18 and 65 years old might be undiagnosed, how many sleep labs served the area, how many beds those labs had and how often the beds were used,” Olson says. “We calculated that in order to get every patient diagnosed, it would have taken almost three years through the traditional sleep lab method.”

Such backlogs are difficult on those suspected to have apnea, and research shows that a third of those patients never make it to the lab, even when their doctors recommend it. That means that scads of patients aren’t getting diagnosed as they should, Olson says. “Obviously, we see the benefits of a facility-based study vs. a home sleep test. We are not looking to take that away from anybody. We also recognize that there is a patient population out there that cannot or will not ever go to a lab, but they still have a problem. They are creating a burden on our health care system because they are not being diagnosed or treated.”

Reaching these folks through their employers and administering home sleep tests means they have another avenue to diagnosis — and that avenue is far less expensive, Olson says. In general, home tests cost less than a third of facility-based tests. Recently, for a presentation to an audience of home medical equipment providers, Olson calculated the difference between the least and most expensive sleep lab study and the least and most expensive home sleep test. (See charts below.)

Then, to show the broader savings, Olson multiplied the undiagnosed population of 18 million nationwide by those average costs. Comparing the least expensive lab tests to the least expensive home tests, home tests would save $37 billion. On the expensive side, the difference saved with home tests is $62 billion. “Tens of billions could be saved by diagnosing people with obstructive sleep apnea in the home,” she says. “And that does not account for the money saved by preventing complications of undiagnosed apnea, such as extra doctor appointments, hospitalizations for stroke or diabetes, and psychiatric care.”

Cost Analysis for Facility-Based Sleep Study
	Range
	Low	High
Cost for full polysomnography in a sleep lab	$2,000	$4,500
Cost for physician interpretation of full PSG	$450	$450
Cost for PAP treatment (no supplies)	$800	$1,850
Total cost to diagnose and treat	$3,250	$6,800
20% patient co-pay (PSG)	$400	$900
20% patient co-pay (interpretation)	$90	$90
20% patient co-pay (PAP)	$160	$370
Total patient co-pay for diagnosis and treatment	$650	$1,360

Cost Analysis for Home Sleep Test
	Range
	Low	High
Cost for home sleep test (HST)	$147	$800
Cost for physician interpretation of HST	$75	$150
Cost for PAP treatment (no supplies)	$800	$1,850
Total cost to diagnose and treat	$1,022	$2,800
20% patient co-pay (HST)	$29	$160
20% patient co-pay (interpretation)	$15	$30
20% patient co-pay (PAP)	$160	$370
Total patient co-pay for diagnosis and treatment	$204	$560

Price range represents the average cost at the low end and the high end, as estimated by Sleep Apnea Solutions, Waukesha, Wis.

Components of the Program

Even though the financial message is a compelling one, blazing a new trail takes effort, Olson says, and early days were rough. “Initially, the response to Sleep Apnea Solutions was not pleasant,” she remembers. “The labs were afraid it would take business away from them; physicians said there was not enough data to show home tests were valid. Still, we looked at it as a way to come alongside the labs and to capture those 30 percent of patients who weren’t going to labs at all. If the home sleep test came back as valid but inconclusive, that was proof that the patient needed to go to the lab.”

Interest from potential customers built slowly. “It was all about pounding the pavement, calling companies, making appointments, making presentations, following up and following up,” Olson says. “But it was different in the aspect that there was the freedom to do it how we wanted to do it outside of the constraints of insurance. There was no Medicare at all. None.”

The freedom enabled Sleep Apnea Solutions to develop a unique program focused on messages that appeal to companies. “When you are dealing with corporations, it’s business to business, as opposed to physician to health care provider,” Olson says. “We can negotiate programs and products. We are dealing with people who understand the value of providing health care to their employees. They want to retain employees who are productive and come to work. If employees are unhappy in their personal lives, they may blame it on their work lives and quit — all because they are not getting a good night’s sleep.”

According to occupational health research, half of the American workforce reports sleepiness on the job interferes with the amount of work they get done. Olson notes that when employees have sleep disorders, it can result in a substantial increase in corporate health care costs, a reduction in employee productivity and a decrease in company profitability. Sleep Apnea Solutions’ Sleep Apnea Health & Safety Program combats those problems. The program includes three components:

• Sleep Apnea Home Testing: This self-administered, Type IV two-night test records respiration, oximetry and pulse. Equipment used includes ResMed’s ApneaLink with Oximetry.
• Sleep Apnea Home Study: This self-administered, Type III one-night sleep study records airfl ow and snoring, patient position, abdomen or chest movement, oximetry, pulse, and/or EKG. Equipment used includes ResMed’s ApneaLink Plus and Philips Respironics’ Stardust II.
• Auto-Titrating Study: Performed after one of the above, this study measures the effect an autoPAP device has on reducing sleep apnea events over a minimum of one month of therapy. Equipment used includes ResMed’s S8 with ResTraxx.

Prior to their sleep studies, patients come in to pick up the diagnostic equipment, and they are shown how to use it by a therapist, Olson says. They also receive an instructional DVD. The coaching works. Sleep Apnea Solutions has a test failure rate of just 3 percent, Olson says. The number of home sleep tests performed each month is moving higher based on a growing number of existing customers renewing their contracts as well as new businesses signing on, she says.

Once patients are diagnosed and complete their titration studies, Sleep Apnea Solutions has a range of treatment options based on contracts with employers and the patients’ individual situations and financial resources. After consulting with the patient and his physician, the company may sell or rent CPAP or autoPAP equipment.

Olson emphasizes the liberty in cultivating business customers. “When you work with Medicare and private insurbest of the best in products and services. We don’t have to skimp because the cost of doing business is in the contract, and that is negotiated. With the occupational health system, the employer is paying for it, and you don’t get into the whole issue that the provider can’t qualify the patient, because it’s privatized.”

Sleep Apnea Solutions works strenuously to protect its contracting partners. “We will not do a home sleep test on somebody just because they want it,” Olson says. “If their Berlin and Epworth scores come back low, if they say they don’t snore and have energy, and if they don’t fit any type of profile, we won’t do it. When the employer is paying for something, the employees think they’ll just get it done because it’s paid for. We will intervene in those instances. That’s helped us to develop business-to-business relationships. We will not compromise the employer’s pocketbook just for the sake of satisfying the employee’s desire to get something for the heck of it.”

One interesting aspect of continuing to grow Sleep Apnea Solutions has been expanding the potential companies that may be customers. “The majority of our business is occupational health programs, but encompassing any type of industry you can imagine well beyond trucking. If people don’t have trucking companies in their area, they certainly have shipping, airlines and schools. It’s a matter of thinking out of the box. Plus, there are some employers that don’t have an occupational health program, but they truly care about their employees. All it takes is looking at the most dangerous jobs out there. Even a chef standing in front of a hot grill and using sharp knives may be affected by sleep apnea. The industry has a tendency not to think in simple terms. It doesn’t have to be a huge corporation.”

Indicators of Quality, Satisfaction

Sleep Apnea Solutions is attracting business customers based on its quality and expertise. The company is accredited by The Joint Commission under the Ambulatory Health Care standards for a Diagnostic Sleep Center. Although that form of accreditation is usually awarded to traditional sleep labs, Sleep Apnea Solutions was able to show compliance even though its patient test environment is the home, Olson says.

Further, Sleep Apnea Solutions’ medical consultant is John Stevenson, MD, a triple-boarded physician certified in pulmonary, sleep and internal medicine. Stevenson isn’t just a figurehead; he takes an active role in the company. He developed the questionnaire that determines whether a patient is a good candidate for home sleep testing. “When we take a new patient, we are about 95 percent sure that HST is appropriate and that the patient does not need to go to the lab right away,” Olson says. “There are certain red flags that make you pause about whether to do a test in the home, such as night terrors,thrashing in sleep or sleep paralysis.” Notably, Stevenson’s expert eyes score most sleep tests, based on 40 years of medical experience.

In addition to satisfying its employer partners with a highquality program, Sleep Apnea Solutions reports that employees are pleased about the increased comfort of testing at home. “Patient response has been really good,” Olson says. “Obviously, they’d rather do a test in their home. No one is watching them; it’s private. And there’s value in it because this is how they really, truly sleep.”

The only reluctant participants the company has encountered are commercial drivers worried about their livelihood, Olson says. Proposed Federal Motor Carrier Safety Administration rules require physicians to screen drivers for sleep apnea if they have certain physical characteristics or health issues. If those drivers don’t get sleep studies, they can lose their licenses because of an incomplete medical report. “Their motivation is not for health reasons, but for financial,” she explains. “They are probably the toughest to work with.” Convenience and privacy can win them over, Olson says.

“A CDL driver can walk out of his physician’s office needing a sleep study, and then his employer refers him to Sleep Apnea Solutions,” she says. “He walks in here with the order from the doc. We set him up, and by the next day, we have the study. There is no waiting to get into the lab and no waiting for a bed — hopefully, he has one.”

Olson concludes that the discreet nature of home tests is working in the company’s favor as well. “We have tested physicians and policeman, and they do not want anyone to know. There’s a prideful thing about not wanting to admit to sleep apnea that we as a society just need to get over. But the response to home sleep testing is better now. We definitely took our hits and licks along the way, whether it was from physicians, sleep labs or prospective partnering companies, but that happens to trailblazers, you know.”

This article originally appeared in the July / August 2010 issue of Respiratory & Sleep Management.