So this theory, I heard this professor speak on disruption in healthcare and I think it offers some insight into what's going on in our space and specifically what's going on in dental sleep medicine. Whenever I think of disruptive innovation, for whatever reason, Kia comes to mind immediately. For me, Kia didn't exist when I was coming up. I had no idea who they were and then all of a sudden you have this major car manufacturer coming to the market in the United States and start competing against some of the bigger players like Toyota. And they were very effective at doing that. They started out, no one knew who they were, they had this tremendous warranty, I believe they warranty their cars up to 100,000 miles and they were a very low cost entry point for cars. So they were able to compete against some of the major car manufacturers and do it successfully. And not only did they compete at the low entry point, but over time they started to compete directly against even some of the higher models of vehicles for some of these major car manufacturers. So how does that happen? How does a small company with limited resources come into the market and compete against some of the big boys? Well, Dr. Christensen, and not the same Dr. Christensen maybe all of you are familiar with, but one out of Harvard from the business school over at Harvard, has come up with a theory that explains this process of disruptive innovation. And it's a process whereby a smaller company with fewer resources can successfully challenge an incumbent business, the incumbent business being the dominant business in the market. And I won't go through all of these components, but it's a process whereby the incumbent is focused on their most profitable customers, their most demanding customers. And the entrant that comes into the business sees an area that the incumbent business is ignoring. And they start offering products and services to that ignored market segment. And slowly but surely, they start getting really good at meeting the needs of that ignored market segment. So good in fact, that they start moving upstream and they start competing directly against the incumbent or market share leader. And when the market share leader customers start purchasing from the entrant company, disruption has occurred. And I think it's an interesting theory. And when you look at it in our space, there are many different areas where we've seen some of this disruption occur. You know, we have CAD CAM devices now instead of these manual appliances that we used to make in the past. That's a massive change in our space. And I can tell you that it's a huge change to the bottom line of any practice doing dental sleep medicine. These precision appliances, the fitting, the first-time fitting of the devices is a major deal to your bottom line. How small they can make these appliances, how sleek, how durable they can make the devices is a big deal. CBCT machines are transforming the imaging side of the business. HSTs are allowing more and more patients to get diagnosed. If you look into the sleep market, just in the Chicagoland area, we saw some of the biggest players go down over the last few years. The brick-and-mortar locations doing solo PSGs day in and day out, they're gone. The payers have restricted their ability to provide PSGs unless patients have really significant comorbid conditions. And even sometimes they deny those patients and make them do HSTs instead of PSGs. So that has been a total transformation, a total disruption into the marketplace. But there are many other examples of this. The EMR as a whole has been very disruptive. Competitive bidding in CPAP. I have tons of friends in the Chicagoland area that were running very successful, durable medical equipment companies that provided CPAP. And within a year from competitive bidding launching, those companies went bankrupt. And it was a solid 50%, I would say, of the market in Chicago disappeared overnight. If you're not familiar with competitive bidding, basically CMS put out a bid for CPAP and related supplies and the DME companies that provided CPAP to Medicare patients competed on that bid. And they went with some of the lowest prices. And it just kicked many of the players out of the market. Electronic signatures have been a big deal. I'll talk about that a little bit more as we go along. Wearables are transforming the market. Value-based payments. As we move from fee-for-service to a value-based payment model, these shared risk models that payers are getting into, that is going to transform the market. The incentive is on improving outcomes rather than fee-for-service. So it's transforming healthcare. Remote monitoring, telemedicine. We talked about remote monitoring with respect to CPAP. That's transforming the cost of providing CPAP to patients. And telemedicine is changing dental sleep medicine as well with the ability to do remote consults with board-certified sleep physicians, sometimes in other states. But disruption in healthcare is unique. It's a value proposition. And that value proposition is sort of an equilibrium. It's a balancing act between cost, quality, and access. And if you think about an example of that, maybe in your own practice, you know, maybe you can charge a high, high price for a service that you do exceptionally well. But maybe only a few people can access that kind of service from a financial standpoint. And vice versa. If you don't do something very well, you're probably not going to be able to charge a premium. And as a result, maybe there's more and more people that can afford it. So there's this equilibrium, this balancing act that creates value in the marketplace. And if you take each one of these attributes of cost, quality, and access, let's sort of break them down. Cost can be affected by the types of insurance that you're part of. Whether you're in or out of network with those insurance carriers. Your particular supply costs, your facility costs, your staff costs, your cost, you, yourself, your services. And maybe payer costs as well. What it costs to work with a particular payer. All those things factor into cost. Access can be affected by your geographic footprint. Whether patients can get to you or not. The income level of your patients. Maybe even things as simple as language and age and sex can influence whether or not patients access it. You know, men tend to have sleep apnea more than women. Women tend not to get treated as much as men. So that can impact access. Patient insurance coverage definitely impacts access. The rendering provider. So your capacity to be able to treat sleep patients. How much room do you have within your practice? How much chair time do you have to dedicate to dental sleep medicine? Whether or not physicians are even aware of particular treatments impacts access. And provider insurance network status. So whether you're in or out of network again. And then there are all these quality measures. You know, quality measures like your ability to use a practice management system or EMR. Your experience with documentation and coding. The patient's preference, adherence, side effects, et cetera, education, the experience of your team, the communication. We talked about all these things. And many of the folks who got up here talked about some of these measures of quality. And the types of things that you need to do to grow your practice. To be able to support your patients. You know, this whole idea of value. Value is like beauty. And beauty is in the eye of the beholder. So whether you're how you look at quality as the patient or how you look at quality as the payer or how you look at quality as the referring provider, that's all going to change based on your specific perspective. So who are the stakeholders? Who's looking at these different metrics that I'm talking about in terms of cost, in terms of access, in terms of quality? The stakeholders are the patient. And their point of view is their out-of-pocket expense, maybe lost wages, the quality of their life, the ease of the experience that they're going through with you. The payer is the direct medical costs. The employer wants to save cost as well. They want to reduce workplace accidents. We looked at the economic cost of lost productivity. The employer is very concerned about that. The health system wants revenue. You know, that's their perspective. The provider is looking for revenue. That's their perspective. And society wants to see these economic costs decrease. So we have all these different perspectives, but they're all looking at the same thing. They're all looking at access. They're all looking at cost. And they're all looking at quality. And there's a fight that goes on between these. Not everyone is going to win in this paradigm of cost, access, and quality. You know, with HSTs, that was a good example of this process. You know, HSTs were a huge win from a cost standpoint for the payer. And they may have been a huge win for the employer. They certainly were not a win for the sleep physician in the marketplace. Obviously from a revenue standpoint, PSGs bring in a heck of a lot more revenue than an HST does. So this paradigm shift transforms sleep. Not only from an access to care standpoint, obviously patients can access the care more. So it was a win for patients getting diagnosed, but it was not a win for sleep physicians from an economic standpoint. So how does this disruption occur? When you provide value to patients, when you provide this unique value proposition, how does the disruption occur? How is it adopted? Well, it has to maximize profit and minimize expense for key stakeholders. And in the example of the HST, it maximized profit and minimized expense for payers and for employers. So those were some of the key stakeholders that won in that cost, access, and quality standpoint in that particular example. Or it needs to become the evidence-based state of the art. When you look at this from an oral appliance standpoint, has the oral appliance become the evidence-based state of the art in our industry? And the answer is no, it has not become the evidence-based state of the art yet. We have a lot of data that's showing that oral appliances are highly effective. I showed that. We have a lot of data that shows that with oral appliances, the outcomes are similar to CPAP. We showed that. But in order to be adopted, in order to transform, the key stakeholders must accept it. And you have to consider who's going to oppose it. And at the end of the day, when you look at the sleep physician community, you know, many of them are entrenched in providing positive airway pressure. So there's certainly going to be folks who lose in this equation of cost, access, and quality when there's disruption. So let's look at what they have to say. And they talk to physicians. They say, you know, why is it that you're not referring for oral appliance therapy? And it was they want to continue to try to get the patient adherent to CPAP. The patients won't be able to afford the oral appliance. So there's that cost piece. They're not going to be able to afford the appliance. The oral appliance may not be efficacious. There's a quality piece. The oral appliance won't record the patient's adherence with therapy. Another quality piece. The patient may develop side effects from using the oral appliance quality. I worry dentists are acting outside the scope of practice. That's a quality piece again. Patients disappear when I refer the patient to them. Another, I would say, actually a cost piece in terms of the physician revenue that's generated from that patient coming back. And I don't know a local dentist who I trust. And again, I think that's a quality measure. So you know, we tend to think about the problem with our industry being on the physician. Usually when I talk to dentists who are getting into dental sleep medicine, there's tremendous frustration knowing the data points. When you know that 50% of these patients are not going to be adherent with CPAP and you're getting no referrals, it can be a very, very, very frustrating process. But what I'm trying to do here is explain to you our responsibility in this issue. They don't know who the oral appliance is going to be effective for. You know, who will respond? They don't know where the, we don't know where the patient is going to respond. We're going to take a guess where to set that appliance, where to start the patient. We don't know who is going to have side effects, but many patients are going to have them. Many, many, many patients are going to have them. This therapy from the great majority of people who go get oral appliance therapy at this point in time is going to cost them somewhere around $2,000 to $3,000, most likely out of their own pocket. And most of the patients who get an oral appliance are not going to return to the lab. There's a study I didn't throw in here, but it showed that only 18% of the patients who are fit with an oral appliance actually return to the sleep lab. And we have no long-term efficacy data, unlike CPAP where you have this remote monitor on there that can show you whether or not the patient's struggling with leak, what their is, with the algorithms that's put into CPAP. We don't have that yet with an oral appliance. So we're going to charge patients $2,000 to $3,000. We have no idea whether it's going to work for them. We don't know where to start them. They're most likely going to get side effects. And when we put them into the therapy, we're not going to return them to the lab. And then we have no idea long-term whether or not they're going to remain effective with the treatment. But you should refer everybody over to us. Oral appliances are underutilized. There's no question about that. Disruption in healthcare is a value proposition. That value proposition is based on metrics of cost, quality, and access. And adoption of any treatment in healthcare or any service in healthcare requires the acceptance of key stakeholders by maximizing profit and minimizing expense. And it has to become either the state of the art or it has to maximize that profit. And the stakeholders are the patients, the stakeholders are the payers, the employers paying for the insurance, and the providers. Somebody wins and somebody loses. And at the end of the day, when you look at that equation of cost, access, and quality, those with the highest quality and the lowest possible cost are going to get the most access.

disruptive innovation

healthcare industry

CAD CAM devices

value-based payments

market access