How a Holistic, Coordinated Approach to Sleep Health Led to Major Cost Savings, Outcome Improvements

Updated on August 22, 2021

By Melissa Lim, MD

San Mateo County Health Plan, a California Medicaid provider, serves a diverse population of >130,000 members ( encumbered with socio-economic challenges and a higher-than-average rate of chronic comorbidities. 

Sleep disorders such as sleep apnea, which is correlated with a higher risk of fatal car accidents, heart disease, stroke, neurocognitive decline, and diabetes, affect a sizable portion of the health plan’s demographic, exacerbated by lifestyle factors such as diabetes, obesity, and tobacco use. 

While as many as 70 million Americans across the country suffer from sleep disorders, 80% to 90% of sleep apnea cases remain diagnosed — putting safety net populations disproportionately at risk. If left untreated, patients with sleep apnea are more likely to over-utilize healthcare system resources, including hospitalization. 

Unfortunately, most effective sleep-health interventions — which incorporate diagnosis, fitting for continuous positive airway pressure (CPAP) apparatus, and ongoing services from primary-care and specialist providers — are expensive. Most payers limit coverage, and, as a result, see little difference in outcomes year to year. 

In July 2014, San Mateo County Health Plan partnered with Redwood Pulmonary Medical Associates, which specializes in pulmonary care and sleep medicine, in the hopes of strengthening interventions and doing more —treating patients with sleep apnea and curbing their risk of adverse health events — with less. 

Over five years, this partnership exceeded many of its initial goals and ultimately plan save $1.3 million in over five years in the process. The secret? A holistic approach to sleep health, which emphasized care coordination and engaging patients in evidence-based medical interventions.  

Assessing Challenges of Traditional, Fee-based Models

From the start of San Mateo County Health Plan’s partnership with Redwood Pulmonary Medical Associates, the health plan, like most others, covered sleep-health interventions on a fee-for-service basis, aligning financial reimbursement with specific procedures.  

But given the financial burden of chronic conditions on the entire health system, these types of fee-for-service arrangements are not sustainable in the long term. Treating patients for acute issues – for example, by prescribing sleep medication with no behavioral health interventions – is like putting a drugstore bandage on a Stage 3 Decubitus Ulcer: It slows the bleeding, temporarily, but the underlying problem persists, and is poised to worsen. The purchase of the bandage itself, while less expensive than a wound-vac treatment, is practically a waste. 

Our practice addresses sleep with the mindset that to improve outcomes, the complex physical and behavioral health issues contributing to sleep apnea must also be addressed. With that perspective, we worked with the health plan to design a sleep health program, supported by a bundled payment model. The program would incorporate multiple ongoing best practices: 

  • Ongoing sleep consultations: Questionnaire and lifestyle assessment at intake, and at multiple touchpoints (e.g., post-sleep diagnostic testing). 
  • Sleep-diagnostic testing: testing via the use of wearable devices for home-based sleep monitoring over a one-week (7-day period), and (when needed), a follow-up in-person polysomnography (sleep study) at designated sleep center. 
  • Cardiopulmonary sleep-apnea testing 
  • CPAP management: device fitting clinics and classes to improve patients’ comfort levels with the devices. Because evening classes weren’t well-attended, they were eventually phased out in favor of education at intake, a revised approach that capitalized on patient momentum and “teaching in the moment.”
  • Annual Follow-up: Within 12 months of their first visit, patients were offered a sleep consultation with an advanced care practitioner, supervised by sleep specialist; the plan covered up to two sleep follow-up consultations, additional cardiopulmonary testing, and up to two CPAP mask fittings and compliance checks. 

In addition to helping the Health Plan of San Mateo save $1.1 million, or 51%, in sleep diagnostic and treatment costs, participants surveyed in 2019 rated the program favorably: 97% would recommend the program to a friend or relative, and all respondents using CPAP felt it had benefitted their overall health. 

Leveling Up with Technology

The Redwood Pulmonary-San Mateo program’s success underscored not only the difficultly of traditional approaches to sleep health, but also the value of a coordinated approach. Moving forward, our practice and others are building on these lessons learned and finding new ways to incorporate technology into sleep programs and improve access to care.

Access is an important point to emphasize because many of the more advanced diagnostic tools for sleep health still aren’t accessible to most patients who suffer from sleep disorders. For example, wearable sleep tracking applications embedded in smartwatches and smart rings helps track duration and quality of sleep, but these devices are expensive – the cost isn’t offset by most health plans. Plus, these wearables can’t, on their own, diagnose major clinical issues like sleep apnea, or dispatch alerts physicians to follow up even if irregularities are identified.  

Therefore, it doesn’t make financial sense for a health plan to send its members these devices.

A better solution is leveraging wearable devices for measuring sleep quality, in conjunction with other technologies (such analytics labs that can remotely collect and process data generated by the wearer) and coordinated, ongoing care.

The use of telehealth platforms to connect patients remotely to behavioral health providers and other specialists is another way for health plans to help their members address health issues on a continual basis. While telehealth isn’t free, leveraging telehealth can improve access to the professionals who are most effective in facilitating positive outcomes. 

Relying on siloed approaches and blanket coverage for sleep disorders is no longer sufficient or sustainable. As we collectively work to improve access to sleep disorders among vulnerable, high risk populations, comprehensive, coordinated approaches are our best option, for both short-term and long-term treatment.  

Dr. Lim the is the Co-Founder and Chief Medical Officer of Somnology, Inc. She is also the Medical Director of Redwood Pulmonary Medical Associates and Redwood Sleep Center, Inc., in Redwood City, Calif. 

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