Our company, Midwest Dental Sleep Center, is based in Chicago. We were founded in 2006 by my father, Dr. Richard Craig. He's a diplomat of the American Board of Dental Sleep Medicine, and we have five diplomats of the American Board of Dental Sleep Medicine on staff with our practice. Many of our doctors participate in various of the committees that the AADSM has, so we're highly involved in the academy, and I'm very thankful to be up here today too speaking to you. So we have a multidisciplinary approach to patient care at Midwest Dental Sleep Center. We work with our team of physicians to come up with a treatment plan that makes sense for our patients. We're exclusively focused on dental sleep medicine. We are a Medicare provider supplier in Chicago. We're also in network with nearly every major medical insurance company in our state. We've treated over 10,000 patients with oral appliance therapy over the years since 2006, and we are nearly 100% referral-based, mainly from physicians, but we also receive a lot of referrals from general dentists as well. So we work with about five major health systems throughout the Chicagoland area, 35 different IPA, PHO organizations, 50 hospitals, 125 group practices, 327 independent medical and dental providers, so many, many different folks in the medical community we're working with on a day-to-day basis, 125 different diagnostic testing facilities, sleep labs in other words. So just to give you a perspective of the medical community that we're working with on a day-to-day basis in our practice, we do no sleep testing whatsoever within our practice. We do no screening. So I just kind of want to set this apart from, you know, what you may be doing in your practice to give you a little sense of what it is that we do within our practice. We are an evidence-based dental sleep medicine practice, and I say that over and over again, evidence-based. I believe in standardization, transparency, and accountability, and I believe in that because we had none of it when we first started. It took a lot of time to develop standardized practices. It took a lot of time to create systems that were very transparent to everyone involved within our organization, and it took a lot of time to develop those so that folks would be accountable to those systems and accountable to those standards. If there's a decision along the way that made our practice scalable, it was the inclusion of an EMR that made sense for our specific practice, and the ability to dig into the data that we were putting into that EMR to understand what was working and what was not working. We had to come up with a standard, evaluate that standard to see what was going well and what wasn't, and then make changes accordingly, and we had a great team to analyze each and every system that we put in place. Our mission as a practice was to break down barriers to treatment, and to break down those barriers to treatment regardless of where they existed, whether they were at the referring physician's practice, whether they were within our own practice, whether they were barriers on the patient's side or the payer side. We looked at barriers wherever they existed, and we found solutions to those problems, and that's sort of the journey that took us from where we started to where we are today. I wanted to sort of lay out a little bit about how we're structured as a company. I think it helps understand what it looks like and how we sort of divided up some of the responsibilities. So we have a patient care coordination department. That department is really set up with our patient care coordinators who are in charge of scheduling, and they're also responsible for any sort of inbound physician referral responsibilities, putting in the referral into the system, into our EMR, and then any communication subsequent to those referrals coming in. So there's a lot of talk about communication, the importance of communication with referring physicians. So this department specifically are the folks that are in charge of all the letters that everybody mentioned. We do the same thing if you, you know, we have all these thank you letters for sending over a referral, and if patients don't proceed, and it's a financial reason, we send them a letter for that, so on and so forth. We have clinical care coordinators. So we've sort of divided it up internally what makes sense for us. We have some people who are great on the phone and great at walking the patient through the intake process and getting them to schedule and overcome any sort of barrier that might exist on the telephone, and then we have folks who have a lot of clinical experience that are really good at answering any Q&A that patients might have as they're going through the treatment process. So we've sort of divided up the patient care coordination into those two responsibilities, and we have coordinators on both sides of that equation. We've got an insurance department. They handle all the major functions of our revenue cycle. So we have an insurance supervisor. They're in charge of claims. They're in charge of patient statements, patient accounts receivable, insurance receivables, etc. We have a benefits coordinator. She checks all the benefits and eligibility of all patients coming into the practice. She also handles any HMO authorization responsibilities, and then we have a, I call them a medical necessity coordinator. So they're in charge of all the documentation that's necessary to collect for establishing medical necessity with a payer. With our clinical department, it's segmented into three different groups of team members. So our dental directors, which I went through, they're obviously in charge of oversight for all of our clinical functions. We have our clinical supervisor. The clinical supervisor is in charge of all the clinical staff. They're in charge of training, education, and then any sort of managerial responsibilities over the clinical assistants, and the clinical assistants provide all the regular clinical functions, assisting the dentist, checking the patients in and out, any sort of patient paperwork, patient payments, etc. All the documentation, chair side, they handle all that for the doctor. It just makes the whole system a little more efficient with a team. On our management side, we have our CEO, and he's responsible for golf, fishing, long walks on the beach. Our chief operating officer is my right hand man. This is a guy who was my mentor coming up in the business world. It just so happened that years later after I left the company that I started with, he was looking for a position. He called me. I said, hey, I need you. Come over here. So we hired him. He's responsible for all the day-to-day operations, all the human resources, much of the day-to-day sort of financials of the company and so forth run through his hands and then come up to me. We have a chief compliance officer. That's my sister. She was in that original picture, my older sister. She handles all of our accreditation, so we are an accredited center with the American Academy of Dental Sleep Medicine for a little while longer here. She handles that. We're also joint commission accredited for durable medical equipment, and she handles that responsibility as well. We do provide CPAP to patients who have a less than efficacious outcome with the oral appliance, and we'll do combination therapy, so we're accredited in that sense, and she handles all of that as well. She does our quality assurance program, patient satisfaction, so she's looking at some high-level responsibilities over making sure that we're in compliance with any and every outside entity that we're responsible to, and then we have a clinical director that interfaces between our clinics, and this is a chore because we've got five remote locations, so he handles sort of the communication between the corporate location, our corporate office, and our remote clinical locations. He oversees all those clinical team members, and he's responsible for all policy and procedure that go down to the clinic. So the goal, so that's just an overview of sort of where we are today, but the goal of my talk today is to discuss with you sort of the evolution of how we got to that place. I wanted to provide an overview of the current market as it exists in my eyes, introduce a theory of disruptive innovation. I had the pleasure of seeing a professor from Northwestern speak on this topic of disruptive innovation, and I think it really pertains to dental sleep medicine. I want to give you a little insight on that. I want to provide you with three simple tools that you can take home to answer some of the key questions that I've been asked over the years with respect to whether or not dental sleep medicine can be profitable, whether or not contracting with insurance makes sense for your practice, and what sort of things you need to do to get your practice to grow. So I'll provide those simple tools, and then I'll give you just some quick insight into opportunities to improve efficiency and profitability within your own practice, things that have worked for us over the years that I think make a lot of sense. So we'll sort of dig into that. So to get started, the evolution of our practice is a standalone dental sleep medicine center, and when I say standalone, what I'm really referring to, we don't have a general dental practice that refers patients to us. So, you know, it's not like when we first started, my dad had his general dental practice. He was screening patients, and he was sending those patients to Midwest Dental Sleep Center. That's not where we're at today. That practice was sold. Those folks really don't refer very many people to us. This is a standalone clinic. We are solely responsible for coming up with our own patient flow. We don't have ownership over a variety of dental practices that send patients to us. We are not entrenched in a sleep center that sends patients to us. So we exist as a standalone facility, a standalone brick-and-mortar location. We own those locations. It's a little different than some of the other models that are out there. So that medical community that we work with, that is the lifeblood of our company. My dad got started in dental sleep medicine. He was at a local watering hole having a nice glass of wine, and this sleep physician, this local ENT, came in, pardon me, and they started getting talking about sleep and about patients struggling with positive airway pressure. And this is back in, you know, 2004. My dad knew nothing about sleep, and he knew nothing about dental sleep medicine at this time. But he was speaking with this physician, and he kept running into this guy over and over again. And I remember him telling me that he had met this gentleman, and he was encouraging him to get involved. I believe his response to him was like, hey, you know, I'm 58 years old. I have no interest whatsoever in getting involved in dental sleep medicine. I'm ready to sell my practice. I don't need something new to bring into my practice. But this guy was persistent. So my dad, at his encouragement, goes to one of the national conventions with the American Academy of Dental Sleep Medicine, and he comes back, and he takes one look at me, and he goes, you've got sleep apnea. What are you talking about? I don't know what you're talking about. He goes, I want you to go get a sleep study. So at his behest, I go over to a local sleep center, a cardinal sleep center in Joliet, Illinois. We're on the southwest side of Chicago. And sure enough, I get tested. I have severe sleep apnea. And knowing what I know now about sleep apnea, it's very clear to me that I've had sleep apnea since I was a little kid. You know, I had tonsils and adenoids removed. I had ear tubes. I had learning disabilities. I still suffer with ADD. It affected absolutely every area of my life. Some of those in a very negative, negative way. I had tremendous difficulty focusing and concentrating. I had failure to thrive. You name it, I had it. And when I got treated, you know, they put me on CPAP. I really struggled with it. Every morning, I woke up, I was on the floor, and pumping air into no man's land. So my dad tries to make an oral appliance for me, and it was successful day one. And the treatment truly transformed my life. It really took a picture that was sort of black and white and turned it into color. I could focus. I could concentrate. I had energy. I could start achieving at a level that I could never do before. You know, when I went through college, I went to night school. I couldn't wake up, you know, early in the morning and make it to class. It was impossible. So I had to do night school. These are some of the things, some of the areas that it affected me. I mean, it was pervasive. I remember right before I got diagnosed, I was driving in my car, fell asleep, and rear-ended the lady in front of me. And this was right before my dad went to that meeting, now at the AADSM. So when he came back, you could imagine, you know, it was a strong referral, a very strong referral over to sleep. So the treatment really transformed my life. And my dad, seeing that transformation in my life, started to screen friends and family members. You know, he did exactly what many people were talking about. You know, when you're just getting started, and you don't know much about sleep, it's easy to start with those people who are close to you, that trust you, that know your intent is good. And so he started doing that within his own practice, and he started seeing it everywhere. He started seeing sleep patients, and how pervasive it was throughout his practice. So he starts doing that, and he runs into every major obstacle you could possibly imagine. He's screening people. He's referring them over to the local sleep center. Those sleep physicians are taking the patients, putting them on CPAP. He's, of the patients he gets back, he tries delivering oral appliances. He can't get paid. When he does get paid, the rate is absurdly low. You know, it's every problem imaginable. He doesn't understand medical billing. He's gotten no support from his team members. No one in the practice is educated on sleep at all. They don't know what he's doing. No one's on the same page. And not to mention that, these patients are suffering from really serious comorbid conditions that come along with obstructive sleep apnea, and he's recognizing that. These folks have had strokes. They have diabetes type 2. They're in heart failure. They have COPD. And he starts to realize, I need a really good support team, or I'm done. I'm going to hurt somebody. Something's going to happen. It's not going to be good. So he gets this idea, maybe I need to start a standalone clinic dedicated to dental sleep medicine with a support staff around me that's highly educated in sleep, with folks who understand medical billing, people who understand documentation and coding. They understand the medical necessity criteria that payers need to know or need to have in order to pay for these devices. So this is a thought in his head, and he decides to execute on it in 2006. So he starts this practice, and we had a few people that were working with us at the time. There was about three diagnostic testing facilities in the Joliet area where our first practice was at. There were four sleep physicians in the community, maybe one group practice. We didn't work with any hospitals, no medical insurance contracts whatsoever. We had one appliance that he worked with. So he came to me. I had a business background. I understood how to market. That was my area. So we started marketing. We put ads in the paper. We did some radio with David. We shared some radio advertisement. We did some TV, some internet, direct sales. I was out there calling on physicians. I was doing everything that everybody else said. We were doing meet-and-greets. We were doing lunch-and-learns, you know, breakfast-and-learns, dinner-and-learns. I'd go anywhere if anybody wanted to learn. And they didn't all want to learn about dental sleep medicine, but I was talking to them regardless. But I would say the overarching theme for anything that we were doing, we were tracking the return on investment of anything that we were doing in marketing from a marketing standpoint. And when I mean tracking, you know, we had dedicated phone numbers that were on each type of advertisement, you know, dedicated websites. We knew where the calls that were coming into the practice were coming from, and we knew whether or not we closed those patients. So I could tell you whether that patient care coordination department, I could tell you who in that department could close the most, and I could tell you which type of advertising was the most effective in terms of our return on investment to the penny. And when you're spending the kind of money that we were spending, you need to know that. Marketing is extremely expensive. It certainly was back in those days, and we were putting somewhere between fifty and sixty thousand dollars a month into our marketing. So this was no joke. We needed to know where those dollars were going and whether or not they were having a return for us. So I want to transition a little bit away from our practice and evolution of that practice to the current market and give you a little overview of how I see the market. So in terms of the prevalence of obstructive sleep apnea, we know that somewhere between 12 and 25 percent of patients have obstructive sleep apnea. I found it really interesting when I dug into some of those numbers as to why there's such a wide range in percentage. And in many studies, it's directly related to obesity, and I'll show you a little bit more of that. But 80 percent of those patients are undiagnosed, and there are more than 23 and a half million patients that have obstructive sleep apnea, and that's on the conservative side. So 23.5 million, sorry, that are untreated, and that's on the conservative side of that number, the 12 percent according to Frost and Sullivan. You know, you can double it if you want to go to the higher percentage, and the percentages that include the obesity rates that we're at right now. So here's a study from Pippard et al., and these are some of the folks that were involved in the original Wisconsin Sleep Cohort, and they've modeled, they modeled the the prevalence of obstructive sleep apnea based on 1988 obesity rates, and then they modeled it for the 2007-2010 obesity rates, and the model breaks it down by age, sex, etc., and severity, or sorry, and anyone over an HI of 5. So if you looked to the left here, I don't know if you can see this, but the age range of 30 to 49 rates of 20 percent prevalence of OSA, and with the obesity epidemic, it moved to 26.6 between 88-94 in 2007. And so there are huge jumps across, across these ages. If you look from 50 to 70 year olds, 38 and a half percent to 43.2 percent per the current obesity. So age and weight play a major factor in sleep apnea. So I think when you're looking at your patient base, and you're thinking that between 12 and 25 percent of the patients have obstructive sleep apnea, you have to realize that the older the patients are, the higher percentage, you're going to have a higher percentage of patients with obstructive sleep apnea. And when you have patients who are severely obese, you're going to have a higher percentage of obstructive sleep apnea. What are the current market drivers that are helping the industry grow? Well, as I mentioned, it's the obesity epidemic, it's an aging population, this is a chronic condition, and I think you need to note that. It's going to get worse, it's going to get worse with weight, and it's going to get worse with age. And I think that's something that you really need to keep in mind, and I think it'll become a little bit more clear here as we go along. But the increasing diagnosis of OSA, the increasing awareness, the funding and research that's going into the field, the large number of undiagnosed patients, the changes in the technology, and the companies that are investing into this space, that's what's helping grow the market. You know, the rising tide does sometimes float all boats. We know that OSA increases health care costs to the fold of two times the rate. So there's a study where they look back as far as 10 years from the time that the patient was diagnosed, and they used health care resources at twice the rate of controls. We've looked, Dr. Wickwire did a study as well where they looked at some Medicare patients, and they looked at them prior to diagnosis, and they used $19,566 per year more than controls. So these are big, big dollars. The economic cost of untreated obstructive sleep apnea in the United States is huge. It's estimated to be somewhere around $149 billion. This is a report from Frost and Sullivan. There's another one from Harvard where they estimate it to be $165 billion. And when you look at sort of how that's compromised, $30 billion in comorbid conditions, 26 in motor vehicle accidents, 6 in workplace accidents, $86 billion in lost productivity. It's huge on the untreated or undiagnosed side. On the diagnosed side, to treat, to diagnose, the cost annually is $12.4 billion. And they break that down into the per patient, so they just divide it by the total number of people who are actually diagnosed in the United States, and that comes out to about $2,000 per person. And they break down the total economic cost by the number of undiagnosed patients, and that comes out to about $6,366 per person. So I think the take-home message here on this slide is the idea that diagnosing and treating has a positive return on investment. You know, if we were to take the cost of treating all the undiagnosed patients, you're somewhere around $49 billion, which is certainly a savings over the $149 billion that we're currently spending in terms of all these losses and all these economic costs of untreated sleep apnea. So does treatment reduce cost? And the answer is yes. So there are some great models out there, and they may be sort of unrealistic to, you know, everyday practice, but in the commercial driving model, they've done some studies, and the cost savings with 100 patients who were diagnosed and treated was $153,000, and that sort of equates to $441 a month in savings. So if you're an employer or if you're a payer, this is a big deal. When we look at the mortality risk of untreated obstructive sleep apnea, you can see specifically in the severe patient that there's very, very significant mortality, and it gets worse as you become more and more severe. So the x-axis here, sorry, is the number of years, and this is the percentage of patients that passed away. If you look at the rates of CPAP acceptance and adherence, we know that, I'm going to have to read this one, 30% of the patients prescribed PAP therapy refuse the treatment from onset. Of the patients who agree to a PAP trial, approximately 25% of them are going to discontinue therapy within the first year. Among those who initiate the therapy, it's estimated that only 50% will remain adherent long-term, and one of the earliest studies, and again, this was Dr. Wickwire, who we heard from on the first day, one of the earliest studies to document PAP adherence found that 46% of the patients wore a PAP device four hours a night, 70% of nights, and that number came solely the fact that that's just what they wore it for. This was recently published in the Journal of Otolaryngology, and it was a look back for 20 years of adherence data in the research on CPAP, and they pulled 82 papers, and they found that there was no significant improvement in adherence with all the changes in technology, heated humidification, APAP, so autopositive airway pressure, different mass styles, monitoring, remote monitoring, there hasn't been a single technological advancement in positive airway pressure over 20 years that has improved adherence. The only thing that improved adherence in this study was some of the behavioral coaching that was done, and it improved it by one hour per night. I love this report. This report, and for the folks that do billing on a day-to-day basis, they come up against these guys, and they give them hell. This is from AIM. So AIM is a utilization management company. They have access to a tremendous amount of health care data in terms of patients who are being authorized for testing and so forth. They work with the payers, and they make sure that medical necessity criteria are followed. They had 51,000 patients over the course of this study that were diagnosed or authorized for diagnostic testing services. Of the 51,000 who were authorized for services, only 39,000 essentially completed the test. Of those who completed the test, the 39,000, 19,000 of those patients were authorized for PAT. Of the patients authorized, 17,000 accepted positive airway pressure. When they looked at adherence on positive airway pressure, at three months, only 15,000 of those patients were actually treated. At six months, 11,000. At nine months, 9,000. So from the beginning of this entire process, only 18% of the total number of patients were actually effectively treated with CPAP at the end of the day. Now if you're an employer or you're a payer, how invested are you in making sure patients are diagnosed and treated with numbers like this? ResMed did another study, and they looked at some of their newer technology. This is specifically on uSleep. It's a platform like AirView. I'm not sure how many of you are familiar with CPAP, but there's there's telemonitoring now that's it's included essentially with all CPAP machines, and they have the ability to do remote monitoring. They can look at adherence data. They can change pressures on machines. They can look at air leakage. There's all sorts of excellent tools, but they looked at this on 140 patients. They randomized those patients into uSleep, which is this remote monitoring tool, or the standard of care without the remote monitoring, and they sort of managed those patients by exception doing automated messaging using text messages, emails, and voicemails that automatically would go out to the patients if the patients weren't adherent or if they had a high air leak so that they could intervene and coach those patients on improving their adherence and improving leak and etc. But with all that technology, the adherence didn't change at all. The only thing that changed with remote monitoring was the cost to the DME company to monitor those patients, and there was a tremendous cost savings to coach patients to monitor them and to try to improve adherence or try to improve leak, etc. So that's the value of remote monitoring. It isn't in improving adherence. It's an improvement in cost for the DME company, and as we move towards larger and larger national DMEs that provide supplies to patients, you can imagine that the cost piece is a big deal, and the ability to remotely monitor and remotely coach patients becomes a tremendous incentive for those DMEs. So the big picture here is that OSA is highly prevalent. The market is growing. OSA is associated with really significant comorbid conditions. OSA patients utilized two times the rate of health care resources and controls. The untreated economic cost of obstructive sleep apnea is very significant, and treatment cost is less than no treatment, and there's a significant patient fallout in this treatment funnel. So what's the problem with this? We, the sleep community, have a significant utilization problem, and I looked up what does utilization mean. Utilization, by definition, is defined as whether people know that they need the care, and we know that we have a huge population of undiagnosed patients that obviously do not know that they need the care, and whether people want to obtain the care, and I just showed you that fallout in the funnel. So we obviously have many, many patients who do not want to obtain the care that's being provided at the moment, and then whether the care can be accessed, and I'm going to break into that one. I think that's very pertinent to dental sleep medicine, so we'll dig into that a little bit more, and the big idea here is that we need alternative treatment strategies, and I don't just mean an oral appliance. I talk about this a lot. We need oral appliance, oral appliance and CPAP, combination therapy, hybrid therapy. We need oral appliance and positional therapy, and anything else that will improve oral appliance outcomes. Surgery, I'm not talking just about oral appliance. We need a host of treatments that we can rely on. So here's some data, just to give you some statistics in terms of the number of patients that have obstructive sleep apnea. There's 245 million Americans that suffer from obstructive sleep apnea, and again that's on that conservative side. That's 12% of the population. You can essentially double that if you want to go with some of the other epidemiological studies. The prevalence of obstructive sleep apnea, there's 29.4 million Americans that have obstructive sleep apnea out of that total adult patient population. 80% of them are undiagnosed. That's 23 and a half million, and we saw that in the economic cost. This is from Frost and Sullivan again. 5.9 million who are diagnosed. 85% of those patients are going to be moved over to CPAP and prescribed CPAP. 10% are going to move to an oral appliance. That's 600,000 patients out of the 5.9 million. 300,000 to surgery, and everybody gets lifestyle suggestions for treatment. Weight loss, avoiding alcohol, etc. So what are the oral appliance therapy market drivers? We have a growing body of evidence-based research. We have patient preference with our therapy, the cost-effectiveness of oral appliance therapy because patients actually wear it. We have new diagnostic and compliance monitoring technologies. We've seen that with some of the adherence monitors and so forth that are out there. Increasing number of multidisciplinary sleep clinics and referral networks. We have some ENT folks who also have dentists on staff in the Chicagoland area, and I think those types of networks are growing in popularity around the country. We have an aging and obese population, which I mentioned before, and the increased awareness and diagnosis of obstructive sleep apnea. So we're definitely making headway into this area as more and more people are interested in sleep. We know that oral appliances are effective. This was a huge study for us back in 2006. I took the study into every physician's office that I went into. It was a practice parameters from the American Academy of Sleep Medicine for oral appliances, and they recommended oral appliances as a first line treatment option for mild and moderate patients who preferred an oral appliance over CPAP, who didn't respond to CPAP, were intolerant or failed CPAP, or failed behavioral measures. And then as a second line treatment strategy for severe patients who were intolerant or non-compliant with CPAP. And then those recommendations have sort of shifted with the update to the practice parameters for 2015, and I would highlight sort of this last bullet point here. We recommend that sleep physicians consider prescription of oral appliances rather than no treatment for adult patients with obstructive sleep apnea who are intolerant of CPAP therapy or prefer alternate treatment. And that patient preference piece across the severe category, whether it's mild, moderate, or severe, is a major update. The idea that we can utilize patient preference, that they don't just have to go into CPAP. Now the payers haven't necessarily come along with that change, but hopefully they will. This was 2015, it's recent, it takes time for things to change, but I do think it's going to come down the pipe. And as I've shown you some of those statistics earlier of this treatment fallout with CPAP, you know, I think we have a solid value proposition to bring to the payer. We know that oral appliances are effective in severe patients. So this is an older study from Dr. Hawley. They had 497 patients that they put into both oral appliance therapy and CPAP. And you can see in the severe patient population, in terms of total resolution of obstructive sleep apnea here, almost 42% were totally effectively treated, 60% below 5. So we know, again, oral appliances are effective. They're not as effective as CPAP, but they are effective. We know from the joint guidelines from the American Academy of Sleep Medicine and the American Academy of Dental Sleep Medicine that oral appliances reduce the arousal index, they lower ODI, they reduce daytime sleepiness, improve quality of life, they reduce blood pressure. I'll say that one again. They reduce blood pressure. They improve it, they have improved adherence over CPAP, and they have reduced side effects over CPAP. So the big question is why are oral appliances underutilized? Over 50% of the CPAP patients are going to be intolerant to the therapy. We know that there are 5 million patients, at least, that are put onto CPAP. Where are those 2.5 million patients who are untreated? I can tell you I know exactly where they are. If you know Airview or you know YouSleep, they're sitting in there.

Midwest Dental Sleep Center

dental sleep medicine

Chicago

Dr. Richard Craig

American Board of Dental Sleep Medicine

multidisciplinary approach

oral appliance therapy

Medicare providers