A recent article pointed out that medical device companies are being challenged to prove that their technologies are worth the price to payers, as all third parties are looking for ways to reduce their expenditures wherever possible. Medicare was the latest to be accused of not keeping up with new technologies, while payers argue that many new developments are overused and overpriced. Medical device makers are an easy target when they deal in devices that diagnose or monitor patients’ problems, rather than cure them.

Examples such as “overselling” the value of CT scans for detecting lung cancer, the use of wire stents to keep heart arteries open, with drug coating that adds to their costs, new tests to find disease even before we know whether this helps improve treatment outcomes, create skepticism among payers. The President’s veto of the SCHIP expansion legislation also meant that $400 million in cuts for diagnostic imaging services payments will not become law.

One of the medical device firms involved is Sleep Solutions, Inc. which markets an at-home obstructive sleep apnea (OSA) diagnostic device that can facilitate and save money in identifying people who have this problem. It struck me that this should be the kind of problem that employers might be interested in solving, even more than the federal government, since it would surely impair worker productivity and performance. Its CEO Michael Thomas mentioned this specifically in discussing the payment challenges at a trade group meeting. [K. Dixon “Medical Device Companies on Defense” YahooNews.com Oct 3, 2007]

I visited Sleep Solutions to learn more about the diagnostic device, and see what kinds of studies would be cited to show the potential value to employers of having OSA diagnosed and treated effectively and efficiently. While I found hundreds of articles pointing out the benefits to patients, and the clinical improvements achieved through treating OSA, there were only a couple that even mentioned how payers might benefit. This is a challenge, of course, since the Sleep Solutions device only identifies and “frames” the problem, while physicians and various sleeping disorder programs actually do anything about solving it.

One study in the journal Sleep noted that OSA syndrome patients have higher healthcare utilization than matched controls. But this is not the same as showing that treating the problem reduces their utilization and costs. Sleep apnea was described in a Cleveland Clinic Journal of Medicine article as contributing to patient decline in congestive heart failure. A Study of air force personnel found that patients with moderate to severe OSA had a significantly lower aerobic fitness than the non-affected population, but no job performance measures were included.

The closest to specific effects on job performance that listed research mentioned was an article in Occupational Hazards noting that people with sleep apnea are six times more likely to be involved in a vehicle crash, while truck drivers in particular are at risk for sleep-deprivation fatigue and the safety hazard this presents. Both industrial and vehicle accidents are significantly more common in patients with sleep apnea, so employers should be concerned.

Yet I found no citations of research, nor examples where the use of Sleep Solutions’ diagnostic device, together with some form of sleep disorders treatment or self-management prompted or assisted by this device improved worker productivity, safety, quality, or any other dimension of performance. This seems like an opportunity missed. Since such devices cost money for employers, at least to the extent that they pay a large portion of employees’ health care costs, there should be a way to compare on a dollar-for-dollar basis what employers save for their investments in such devices.

Increasingly, employers and the employee health management (EHM) providers they contract with directly, or the EHM programs provided by their insurers, are recognizing that the job performance effects of conditions such as sleep apnea, along with stress, overweight, poor nutrition and fitness, etc. are far greater than their effects on sickness care costs. Often they are more prevalent than the traditional diseases that disease management (DM) programs focused on, and as a result have significantly greater negative economic impact on employers. Sleep Solutions’ website noted that OSA’s prevalence of 18 million people affected is pretty close to that for diabetes (20 million) and asthma (17 million).

It would seem logical to me for this example, and other medical devices that are only indirectly, but still significantly linked to savings in sickness care costs, and particularly to overall labor costs and worker performance for employers, would get together with sleeping disorders treatment sources and make the economic or business case, rather than rely on political lobbying. If employers can be shown that after treatments diagnosed by these manufacturers’ devices, workers produce and perform better, have measurably fewer vehicle and industrial accidents, and that this translates into more economic benefit than the costs of solving the problem, these firms would have a far stronger basis for deserving coverage and adequate payment.

At least those medical device companies whose products are used in solving health problems that produce impairment in productivity and performance of workers have a way of showing the financial benefits vs. financial costs of their products. As long as they deliver an acceptable or admirable ROI to businesses, they stand a good chance of overcoming the skepticism that affects many of them, and of going on the “offense” instead of being continuously on defense.