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In addition to well-documented health consequences, obstructive sleep apnea (OSA) is associated with substantial economic costs borne by patients, payers, employers, and society at large. For example, in a recent white paper commissioned by the American Academy of Sleep Medicine, the total societal-level costs of OSA were estimated to exceed $150 billion per year in the United States alone. In addition to direct costs associated with OSA diagnosis and treatment, indirect costs were estimated at $86.9 billion for lost workplace productivity; $30 billion for increased health-care utilization (HCU); $26.2 billion for motor vehicle crashes (MVC); and $6.5 billion for workplace accidents and injuries.1
More important, evidence suggests that OSA treatments provide positive economic impact, for example reducing health-care utilization and reducing days missed from work. Our group at the University of Maryland is currently heavily involved in related research examining the health economic impact of sleep disorders and their treatments.
Value-based sleep is a concept that I created several years ago to guide a greater emphasis on health economic outcomes in order to advance our field. In addition to working with payers, industry partners, employers, and forward-thinking startups, we are investing much effort into provider education regarding the health economic aspects of sleep. This article examines what value-based sleep is, how to increase the value of sleep in your practice setting, and steps to prepare for payment models of the future.
Value is in the eye of the beholder
Unlike sleep medicine providers (and some patients), the majority of society views sleep as means to an end and not as an end-in-itself. That is, people only value sleep insofar as sleep will help them achieve their primary objectives, whatever they might be. In health economic terms, these distinct viewpoints are referred to as perspectives. For example, from the patient perspective, sleep is valued to the extent that it helps to increase quality of life. From the payer perspective, sleep is valued to the extent that reduces health-care utilization. From the employer perspective, sleep is valued to the extent that it increases workplace productivity and reduces health-care expenses. Table 1 summarizes common stakeholders and perspectives in sleep medicine.
Speaking the language of value
In order to define, demonstrate, and maximize the perceived value of sleep medicine services, sleep physicians must understand and clearly articulate the values of these multiple constituents. Most important, this means that sleep physicians must move beyond discussing the apnea-hypopnea index (AHI). To be clear, no one other than sleep medicine insiders care about the AHI! Of course, the AHI is an important (albeit imperfect) measure of OSA disease severity and treatment outcomes. However, when was the last time that a patient told you they woke up one morning dreaming about a lower AHI? It simply does not happen. Instead, stakeholders care about outcomes that matters to them, from their own unique perspectives. To speak directly to these interests and frame the value of sleep, sleep medicine providers must methodically develop value propositions with each unique target constituency in mind. Speak the language of your audience, and use terms that matter to them.
Adopting value-based payments
Much has been spoken about a transition from fee-for-service to value-based care in medicine. New health-care business models will soon impact patients, providers, payers, and health systems. To guide and ensure sustainable change, multi-stakeholder organizations, such as the Health Care Payment & Learning Action Network, are heavily engaged in the development and implementation of alternate payment models (APMs) to facilitate the transition from fee-for-service to population health. As depicted in Figure 1, sequential steps toward value-based care include increased fees corresponding to improved outcomes. A reimbursement model that is fully value-based centers on shared financial risks. Although private practitioners may be ill-equipped to provide population-level services or negotiate fully value-based models, sleep medicine providers should do well to increase familiarity with APMs and their impact on primary and specialty care services. 
Five steps to a value-based approach
In the modern health-care climate of increasing costs on the one hand and limited resources on the other, sleep medicine providers must embrace a value-based perspective to survive, thrive, and grow in a new world of value-based care. This will require sleep medicine providers to learn, adapt, and adjust. The good news is that regardless of your practice or organizational setting, these strategies and tactics will help guide you:
1. Know thyself. What are your personal and organization objectives? Where are you, career-wise? Where do you want to be in 2, 3, and 5 years?
2. Know your customer. Whom do you serve? More broadly, whom does sleep serve? Listen carefully and identify the outcomes that matter to your constituents. Make these your endpoints.
3. Develop customer-centric language. Develop scripts. Rehearse them.
4. Understand trends in payments and technology. Is your region adopting bundled payments or paying more for improved outcomes? How might telemedicine or preauthorization for PAP impact your practice?
5. Know your numbers. To negotiate with confidence, you need to know your numbers. What are your costs per patient, per test, per outcome, and lifetime value of the patient?
Summary and next steps
To survive and thrive in a value-based future, you need to define, demonstrate, and maximize your perceived value. This will require greater attention to the language that you use, the results that you emphasize, and the data that you use to make decisions, all while attending to the perspectives of diverse stakeholders. The need for sleep medicine services has never been greater. Adopt a value-based sleep approach to ensure your bright future.
References
1. American Academy of Sleep M. Hidden health crisis costing America billions. Underdiagnosing and undertreating obstructive sleep apnea draining healthcare system. Mountain View, CA: Frost & Sullivan; 2016.
2. Wickwire EM, Verma T. Value and payment in sleep medicine. J Clin Sleep Med. 2018;14(5):881-884.
Dr. Wickwire is Associate Professor of Psychiatry and Medicine at the University of Maryland School of Medicine, where he directs the insomnia program. His current research interests include health and economic consequences of sleep disorders and their treatments and targeting sleep treatments for specific populations.
In addition to well-documented health consequences, obstructive sleep apnea (OSA) is associated with substantial economic costs borne by patients, payers, employers, and society at large. For example, in a recent white paper commissioned by the American Academy of Sleep Medicine, the total societal-level costs of OSA were estimated to exceed $150 billion per year in the United States alone. In addition to direct costs associated with OSA diagnosis and treatment, indirect costs were estimated at $86.9 billion for lost workplace productivity; $30 billion for increased health-care utilization (HCU); $26.2 billion for motor vehicle crashes (MVC); and $6.5 billion for workplace accidents and injuries.1
More important, evidence suggests that OSA treatments provide positive economic impact, for example reducing health-care utilization and reducing days missed from work. Our group at the University of Maryland is currently heavily involved in related research examining the health economic impact of sleep disorders and their treatments.
Value-based sleep is a concept that I created several years ago to guide a greater emphasis on health economic outcomes in order to advance our field. In addition to working with payers, industry partners, employers, and forward-thinking startups, we are investing much effort into provider education regarding the health economic aspects of sleep. This article examines what value-based sleep is, how to increase the value of sleep in your practice setting, and steps to prepare for payment models of the future.
Value is in the eye of the beholder
Unlike sleep medicine providers (and some patients), the majority of society views sleep as means to an end and not as an end-in-itself. That is, people only value sleep insofar as sleep will help them achieve their primary objectives, whatever they might be. In health economic terms, these distinct viewpoints are referred to as perspectives. For example, from the patient perspective, sleep is valued to the extent that it helps to increase quality of life. From the payer perspective, sleep is valued to the extent that reduces health-care utilization. From the employer perspective, sleep is valued to the extent that it increases workplace productivity and reduces health-care expenses. Table 1 summarizes common stakeholders and perspectives in sleep medicine.
Speaking the language of value
In order to define, demonstrate, and maximize the perceived value of sleep medicine services, sleep physicians must understand and clearly articulate the values of these multiple constituents. Most important, this means that sleep physicians must move beyond discussing the apnea-hypopnea index (AHI). To be clear, no one other than sleep medicine insiders care about the AHI! Of course, the AHI is an important (albeit imperfect) measure of OSA disease severity and treatment outcomes. However, when was the last time that a patient told you they woke up one morning dreaming about a lower AHI? It simply does not happen. Instead, stakeholders care about outcomes that matters to them, from their own unique perspectives. To speak directly to these interests and frame the value of sleep, sleep medicine providers must methodically develop value propositions with each unique target constituency in mind. Speak the language of your audience, and use terms that matter to them.
Adopting value-based payments
Much has been spoken about a transition from fee-for-service to value-based care in medicine. New health-care business models will soon impact patients, providers, payers, and health systems. To guide and ensure sustainable change, multi-stakeholder organizations, such as the Health Care Payment & Learning Action Network, are heavily engaged in the development and implementation of alternate payment models (APMs) to facilitate the transition from fee-for-service to population health. As depicted in Figure 1, sequential steps toward value-based care include increased fees corresponding to improved outcomes. A reimbursement model that is fully value-based centers on shared financial risks. Although private practitioners may be ill-equipped to provide population-level services or negotiate fully value-based models, sleep medicine providers should do well to increase familiarity with APMs and their impact on primary and specialty care services.
Five steps to a value-based approach
In the modern health-care climate of increasing costs on the one hand and limited resources on the other, sleep medicine providers must embrace a value-based perspective to survive, thrive, and grow in a new world of value-based care. This will require sleep medicine providers to learn, adapt, and adjust. The good news is that regardless of your practice or organizational setting, these strategies and tactics will help guide you:
1. Know thyself. What are your personal and organization objectives? Where are you, career-wise? Where do you want to be in 2, 3, and 5 years?
2. Know your customer. Whom do you serve? More broadly, whom does sleep serve? Listen carefully and identify the outcomes that matter to your constituents. Make these your endpoints.
3. Develop customer-centric language. Develop scripts. Rehearse them.
4. Understand trends in payments and technology. Is your region adopting bundled payments or paying more for improved outcomes? How might telemedicine or preauthorization for PAP impact your practice?
5. Know your numbers. To negotiate with confidence, you need to know your numbers. What are your costs per patient, per test, per outcome, and lifetime value of the patient?
Summary and next steps
To survive and thrive in a value-based future, you need to define, demonstrate, and maximize your perceived value. This will require greater attention to the language that you use, the results that you emphasize, and the data that you use to make decisions, all while attending to the perspectives of diverse stakeholders. The need for sleep medicine services has never been greater. Adopt a value-based sleep approach to ensure your bright future.
References
1. American Academy of Sleep M. Hidden health crisis costing America billions. Underdiagnosing and undertreating obstructive sleep apnea draining healthcare system. Mountain View, CA: Frost & Sullivan; 2016.
2. Wickwire EM, Verma T. Value and payment in sleep medicine. J Clin Sleep Med. 2018;14(5):881-884.
Dr. Wickwire is Associate Professor of Psychiatry and Medicine at the University of Maryland School of Medicine, where he directs the insomnia program. His current research interests include health and economic consequences of sleep disorders and their treatments and targeting sleep treatments for specific populations.
In addition to well-documented health consequences, obstructive sleep apnea (OSA) is associated with substantial economic costs borne by patients, payers, employers, and society at large. For example, in a recent white paper commissioned by the American Academy of Sleep Medicine, the total societal-level costs of OSA were estimated to exceed $150 billion per year in the United States alone. In addition to direct costs associated with OSA diagnosis and treatment, indirect costs were estimated at $86.9 billion for lost workplace productivity; $30 billion for increased health-care utilization (HCU); $26.2 billion for motor vehicle crashes (MVC); and $6.5 billion for workplace accidents and injuries.1
More important, evidence suggests that OSA treatments provide positive economic impact, for example reducing health-care utilization and reducing days missed from work. Our group at the University of Maryland is currently heavily involved in related research examining the health economic impact of sleep disorders and their treatments.
Value-based sleep is a concept that I created several years ago to guide a greater emphasis on health economic outcomes in order to advance our field. In addition to working with payers, industry partners, employers, and forward-thinking startups, we are investing much effort into provider education regarding the health economic aspects of sleep. This article examines what value-based sleep is, how to increase the value of sleep in your practice setting, and steps to prepare for payment models of the future.
Value is in the eye of the beholder
Unlike sleep medicine providers (and some patients), the majority of society views sleep as means to an end and not as an end-in-itself. That is, people only value sleep insofar as sleep will help them achieve their primary objectives, whatever they might be. In health economic terms, these distinct viewpoints are referred to as perspectives. For example, from the patient perspective, sleep is valued to the extent that it helps to increase quality of life. From the payer perspective, sleep is valued to the extent that reduces health-care utilization. From the employer perspective, sleep is valued to the extent that it increases workplace productivity and reduces health-care expenses. Table 1 summarizes common stakeholders and perspectives in sleep medicine.
Speaking the language of value
In order to define, demonstrate, and maximize the perceived value of sleep medicine services, sleep physicians must understand and clearly articulate the values of these multiple constituents. Most important, this means that sleep physicians must move beyond discussing the apnea-hypopnea index (AHI). To be clear, no one other than sleep medicine insiders care about the AHI! Of course, the AHI is an important (albeit imperfect) measure of OSA disease severity and treatment outcomes. However, when was the last time that a patient told you they woke up one morning dreaming about a lower AHI? It simply does not happen. Instead, stakeholders care about outcomes that matters to them, from their own unique perspectives. To speak directly to these interests and frame the value of sleep, sleep medicine providers must methodically develop value propositions with each unique target constituency in mind. Speak the language of your audience, and use terms that matter to them.
Adopting value-based payments
Much has been spoken about a transition from fee-for-service to value-based care in medicine. New health-care business models will soon impact patients, providers, payers, and health systems. To guide and ensure sustainable change, multi-stakeholder organizations, such as the Health Care Payment & Learning Action Network, are heavily engaged in the development and implementation of alternate payment models (APMs) to facilitate the transition from fee-for-service to population health. As depicted in Figure 1, sequential steps toward value-based care include increased fees corresponding to improved outcomes. A reimbursement model that is fully value-based centers on shared financial risks. Although private practitioners may be ill-equipped to provide population-level services or negotiate fully value-based models, sleep medicine providers should do well to increase familiarity with APMs and their impact on primary and specialty care services.
Five steps to a value-based approach
In the modern health-care climate of increasing costs on the one hand and limited resources on the other, sleep medicine providers must embrace a value-based perspective to survive, thrive, and grow in a new world of value-based care. This will require sleep medicine providers to learn, adapt, and adjust. The good news is that regardless of your practice or organizational setting, these strategies and tactics will help guide you:
1. Know thyself. What are your personal and organization objectives? Where are you, career-wise? Where do you want to be in 2, 3, and 5 years?
2. Know your customer. Whom do you serve? More broadly, whom does sleep serve? Listen carefully and identify the outcomes that matter to your constituents. Make these your endpoints.
3. Develop customer-centric language. Develop scripts. Rehearse them.
4. Understand trends in payments and technology. Is your region adopting bundled payments or paying more for improved outcomes? How might telemedicine or preauthorization for PAP impact your practice?
5. Know your numbers. To negotiate with confidence, you need to know your numbers. What are your costs per patient, per test, per outcome, and lifetime value of the patient?
Summary and next steps
To survive and thrive in a value-based future, you need to define, demonstrate, and maximize your perceived value. This will require greater attention to the language that you use, the results that you emphasize, and the data that you use to make decisions, all while attending to the perspectives of diverse stakeholders. The need for sleep medicine services has never been greater. Adopt a value-based sleep approach to ensure your bright future.
References
1. American Academy of Sleep M. Hidden health crisis costing America billions. Underdiagnosing and undertreating obstructive sleep apnea draining healthcare system. Mountain View, CA: Frost & Sullivan; 2016.
2. Wickwire EM, Verma T. Value and payment in sleep medicine. J Clin Sleep Med. 2018;14(5):881-884.
Dr. Wickwire is Associate Professor of Psychiatry and Medicine at the University of Maryland School of Medicine, where he directs the insomnia program. His current research interests include health and economic consequences of sleep disorders and their treatments and targeting sleep treatments for specific populations.