By Abhinav Talwar, MD Candidate and Arunabh Talwar, MD
Sleep medicine and sleep research have been growing exponentially over the past few decades. It is obvious that the increased emphasis on sleep health as it relates to mind and body well-being requires a robust evaluation of sleep problems. Post-COVID-19-pandemic, there have been significant changes in the diagnostic practices within sleep medicine. Notably, many more patients are undergoing home sleep testing (HST) instead of in-lab sleep studies. This trend seems to persist even as the pandemic has begun to recede.1,2
Sleep tests are stratified according to how much and what type of data they collect. Type 1 and type 2 tests collect more detailed data, whereas home sleep diagnostic tests are generally type 3/type 4, which collect less data.3 The intention of this paper is to analyze the forces which govern the competitive healthcare field where HSTs are performed. These considerations are paramount for sleep healthcare providers (including MDs, sleep technologists and respiratory therapists) to contextualize this rapidly evolving field better.4
We feel the best way to analyze the current HST milieu is under the auspices of Porter’s Five Forces.5 Michael Porter‘s model of industry analysis provides insight into the economics of home sleep testing evaluation and care by showing how the forces of supplier power, buyer power, threat of substitution, barrier to entry, and internal rivalry affect the delivery of HST. Such an analysis provides us with a birds-eye-view of the market forces and economics of delivering high-quality, effective care for sleep disorders (Figure 1).
Supplier power – What impact do HST device manufacturers have on the industry?
In-lab polysomnography is time and cost-intensive for sleep health provider organizations, in addition, patients must spend an entire night at the sleep lab under observation which creates a potential cost and time burden. While this is necessary for diagnosing complex sleep pathology, some physiologic data available through in-lab testing (like nasal flow, pulse oximetry, and chest movement) can be reliably detected with HST devices. Thus, for the evaluation of simple sleep apnea in the moderate-to-severe range, HST is an attractive diagnostic alternative.
Moreover, federal and state policy changes during the COVID-19 pandemic have seen telemedicine adoption, whereby patients no longer need to present to the clinic for care.6 Thus, HST fits well within the paradigm of telemedicine.
Recently there has been an increase in the number of HST devices along with newer sensor technology and software improvements. Providers should be educated on the features and benefits of the various types of devices and their technological attributes to select the device most appropriate for their practice and patient population.
Buyer power – What impact do purchasers (providers) have on the industry?
Sleep apnea is a highly prevalent condition. Integration of a low-cost and effective means for diagnosis is critical. HST devices offer a step in the right direction as they create immense economic value.7 Theoretically widespread adoption of HST by sleep physicians can widen access to diagnosis of OSA, ultimately reducing the substantial economic burden related to OSA. HST devices are more affordable than in-lab testing equipment. Thus, sleep medicine physicians can easily use them widely and, in the process, decrease sleep testing wait times.
Threat of substitution – Are there other options for patients that can supplant HST?
At present, there is no biomarker for sleep apnea pathology. HST has become an essential component of any sleep practice, primarily because of its advantages over lab testing (described above). In fact, the expansion of the HST industry is evidence in and of itself that it is here to stay.
Barriers to entry – How easy is it for new technology to enter the HST marketplace?
Given the highly competitive existing HST device landscape, it is conceivable for new devices to enter and quickly become popular. If the newer devices promote patient comfort while providing quick data analysis and accurate results their adoption by the sleep medicine community will be easy. A testament to this fact is that novel devices have emerged rapidly to compete with traditional HST (which use pulse oximeters, effort belts and breathing sensors). Notable among them is the WatchPAT, a device worn around the wrist with a finger monitor that measures peripheral arterial tonometry. Using data on blood flow, the device extrapolates information about the user’s breathing patterns. While traditional HST requires users to return the device to the provider, WatchPAT offers a disposable model (WatchPAT One).8,9 Continuous entry may subsequently stimulate rapid product development within companies that already produce HST devices.
Another such technology is the Nox T3s HST device which employs artificial intelligence to evaluate respiratory indices such as the apnea-hypopnea index and an oxygen desaturation index. It also incorporates body sleep analysis to accurately estimate sleep time in a home environment using an artificial intelligence algorithm. It is anticipated that further development in this space will make devices more comfortable to wear at home and more intelligent.10,11
Internal rivalry – Is there competition between HST device companies?
The industry of HST devices, like other medical device industries, has a high degree of internal rivalry. Numerous devices offering similar technological characteristics as noted above and scoring capabilities to provide sleep/sleep respiratory data allow providers to choose the lowest cost options. As with any market, rivalry also stimulates innovation. While cost may be a factor in its more widespread adoption but just with any technology if it provides better and faster results providers will adopt these and use them. Within the HST industry in particular, upcoming devices will have improved remote monitoring platforms to expedite the review of sleep studies. In addition, the post-COVID era has heralded the use of disposable medical accessories. It is yet to be seen how this will play out in the HST space.
In the current healthcare market, HST is essential. With a low barrier to entry in the HST industry, many new HST devices have come to market. Providers have immense “buyer power” and can exercise it to control the price and quality of devices. So, practitioners must familiarize themselves with existing and upcoming sleep technology to make the best decision for their patients and practice.
Abhinav Talwar, MD Candidate, Northwestern University Feinberg School of Medicine. Arunabh Talwar, MD, Division of Pulmonary, Critical Care, and Sleep Medicine, Department of Medicine, Donald and Barbara Zucker School of Medicine at Hofstra/Northwell
- Johnson KG, Sullivan SS, Nti A, Rastegar V, Gurubhagavatula I. The impact of the COVID-19 pandemic on sleep medicine practices. J Clin Sleep Med 2021;17:79-87.
- Wilson KC, Kaminsky DA, Michaud G, et al. Restoring Pulmonary and Sleep Services as the COVID-19 Pandemic Lessens. From an Association of Pulmonary, Critical Care, and Sleep Division Directors and American Thoracic Society-coordinated Task Force. Ann Am Thorac Soc 2020;17:1343-51.
- Sleep Testing for Obstructive Sleep Apnea (OSA). Center for Medicare and Medicaid Services. 2022, at https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=227&ver.)
- Senior Care Industry Analysis 2020 – Cost & Trends. 2022, at https://www.franchisehelp.com/industry-reports/senior-care-industry-analysis-2020-cost-trends/.)
- Porter M. Competitive strategy techniques for analyzing companies and competitors. New York: The Free Press; 1980.
- Payan DD, Frehn JL, Garcia L, Tierney AA, Rodriguez HP. Telemedicine implementation and use in community health centers during COVID-19: Clinic personnel and patient perspectives. SSM Qual Res Health 2022;2:100054.
- Kim RD, Kapur VK, Redline-Bruch J, et al. An Economic Evaluation of Home Versus Laboratory-Based Diagnosis of Obstructive Sleep Apnea. Sleep 2015;38:1027-37.
- FDA clears disposable home sleep apnea test. 2020. March 23, 2022, at https://aasm.org/fda-clears-disposable-home-sleep-apnea-test/.)
- Ioachimescu OC, Dholakia SA, Venkateshiah SB, et al. Improving the performance of peripheral arterial tonometry-based testing for the diagnosis of obstructive sleep apnea. J Investig Med 2020;68:1370-8.
- Nox Medical Launches Nox T3s™ Featuring Innovative Nox BodySleep™ Analysis. Nox Medical. 2022, at https://noxmedical.com/about/news-press/article/nox-medical-launches-nox-t3s/.)
- Xu L, Han F, Keenan BT, et al. Validation of the Nox-T3 Portable Monitor for Diagnosis of Obstructive Sleep Apnea in Chinese Adults. J Clin Sleep Med 2017;13:675-83.