HMEs Expect Sleep Revenue to Grow by 9 Percent
Q2 2009 HME Business, Wachovia study shows growth expectations for next 12 months slightly down from Q4 2008 survey.
HME providers expect sleep revenue to grow by 9 percent over the next 12 months, according to the Q2 2009 Sleep and Wound Care Survey conducted by HME Business and Wachovia Capital Markets.
The sixth edition of the biannual study surveyed 183 HME providers between April 29 and May 13, and found providers’ growth hopes slightly down from the 10 percent growth expectations of our Q4 2008 study. Because this fell below the prior 2009 U.S. sleep market estimate of 10 percent to 12 percent growth, Wachovia tapered its estimates to 8 percent to 10 percent growth.
The full results of the survey can be downloaded as a PDF from the White Papers section
of the HME Business web site.
Other key findings from the study:
- The sour economy is creating a headwind for the sleep market’s growth. On average, providers expect the sour economy to slow their sleep business growth by 1.4 percent. More specifically, 53 percent of providers have seen a decline in ''out of pocket'' CPAP purchases, 42 percent have seen patients replacing masks less frequently, and 32 percent have seen a decline in sleep center referrals.
- Providers appear to be reducing their working capital but have generally not seen major difficulties raising capital. The lion’s share of providers (57 percent) have reduced their inventories to conserve cash, renegotiated payment terms with suppliers (41 percent) and delayed payments to suppliers (39 percent) to preserve cash. That said, only a minority (26 percent) have had to pay higher interest rates on loans, and only 20 percent reported that borrowing had become more difficult.
- Few providers offer home sleep apnea testing, but plan to increase home testing over the next 12 months. Only 9 percent of respondents to the survey currently offer home testing for sleep apnea. Another 16 percent of providers says they plan to begin offering home testing over the next 12 months (consistent with our prior survey) with the bulk starting in six months or more.