Value and Payment in Sleep Medicine

Abstract

Value, like beauty, exists in the eye of the beholder. This article places the value of clinical sleep medicine services in historical context and presents a vision for the value-based sleep of the future. First, the history of value and payment in sleep medicine is reviewed from the early days of the field, to innovative disruption, to the widespread adoption of home sleep apnea testing. Next, the importance of economic perspective is discussed, with emphasis on cost containment and cost-shifting between payers, employers, providers, and patients. Specific recommendations are made for sleep medicine providers and the field at large to maximize the perceived value of sleep. Finally, alternate payment models and value-based care are presented, with an eye toward the future for clinical service providers as well as integrated health delivery networks.

Keywords: alternative payment models; health economics; home sleep apnea tests; population health; value-based medicine.

Figure 1. Cost shifting and transfer of risk among stakeholders.

Health plans are differentiated primarily by financial risk to the employer or plan sponsor, and the insurance company. In effort to reduce costs, employers and payers seek to “cost shift” expenses to patients and health providers.

Figure 2. The transition from volume to value.

Alternate payment models seek to increase value by moving from volume-based fee-for-service (FFS) payments to value-based care. Beginning with the status quo, sequential steps first link FFS payments to indicators of quality and value, then share financial risk, and finally provide fixed payments for managing population health.