The Cost of Doing Business in the Sleep Apnea Space: A Respiratory Therapist's Perspective on HME Challenges

Published in Respiratory & Sleep on June 17, 2025

By Boone Lockard, CRT, VP, Clinical Services, VGM & Associates

In the evolving landscape of sleep apnea management, HME providers face increasing pressure to deliver high-quality care while managing rising operational costs. As a respiratory therapist working closely with both patients and providers, I’ve seen firsthand the intricate and often underestimated cost structure involved in keeping a sleep apnea patient healthy, compliant, and equipped.

What may seem like a straightforward business— supplying PAP machines, finding the correct masks, and follow-ups—is a complex operation with both visible and hidden costs. Let’s break down what it truly costs to support a single patient in the sleep apnea space and how finding the right partner that has a comprehensive program can help mitigate these challenges.

1. The Real Cost of Proper Mask Fitting

Mask fitting is both an art and a science. Getting it right the first time can mean the difference between a compliant patient and a lost one, but it’s rarely perfect out of the gate. Fittings involve:

• Clinical time: A respiratory therapist or trained fitter may spend 15-25 minutes per patient.
• Inventory exposure: HMEs often need to open multiple masks during the fitting process. Those opened masks are now non-billable inventory, costing upwards of $50 each.
• Patient dissatisfaction: A poor fit leads to leaks, discomfort, and ultimately, non-compliance—which carries its own long-term costs. Poor mask fit leading to non-compliance can result in increased returns and lost revenue, potentially costing providers thousands of dollars annually.

Mask fit issues are one of the top drivers of poor adherence and increased returns, meaning one misstep can result in a cascade of lost revenue and higher patient churn. AI mask fitting technologies can, on average, save 15 minutes of clinician time per patient. With one company boasting a 97% accuracy on mask fitting, it mitigates open box inventory. AI mask fitting technologies and personalized fitting protocols are a great way to reduce the likelihood of poor fit and enhance patient comfort and compliance.

2. PAP Machine Shipping and Inventory Overhead

Shipping PAP devices isn’t just about placing a label on a box. Consider:

• High-value inventory: PAP devices tie up thousands of dollars in capital expenses.
• Shipping logistics: Based on recent data, the average annual shipping costs for Home Medical Equipment (HME) providers, including returns due to delivery issues or non-start patients, can vary significantly. However, a recent estimate for these costs is approximately $50,000 to $70,000 annually.^{1, 2}

By using a comprehensive sleep services program, HMEs can take advantage of machines sold on consignment and advanced tracking systems that minimize delivery issues and optimize inventory turnover. VGM Total Sleep Services offers machine setting by a licensed professional prior to drop shipping the patient’s device. A good partner can also help streamline shipping logistics and inventory management by offering a centralized distribution center preventing long wait times and high freight costs from shipping across country.

3. The Hidden Cost of Compliance Management

Ensuring compliance isn’t just a matter of handing out a device and hoping for the best.

• It is costly to have clinicians manage follow-up calls. Clinicians should be in revenue-generating roles or focusing on higher acuity patients. 
• Typically, when teams get busy, follow-up communication is one of the first things they push off until the next day.
• Ineffective communication can lead to patients developing bad habits when it comes to using their PAP therapy.
• Inefficient practices after a patient is set up can lead to strain on the team.

These are non-reimbursable services, but they are essential. Without them, patients fall off the radar— and the provider loses not just the patient, but the opportunity for long-term resupply revenue. Total Sleep Services can enhance compliance management with a 14% average increase from baseline. They do this by providing integrated remote monitoring solutions and automated patient engagement tools that keep patients on track with their therapy as well as one-on-one coaching.

4. The Complicated World of Resupply

Resupply programs are touted as passive revenue generators, but the reality is far from effortless:

Complex scheduling: Aligning resupply shipments with payer timelines and patient usage patterns requires robust systems, costing HMEs between $5,000 and $20,000 annually.³

Inventory management: Stocking a wide array of cushions, headgear, and filters means increased warehousing and forecasting challenges, leading to warehousing costs of $10,000 to $50,000 annually.⁴

Patient engagement: Automated calls and texts help, but patients often still require live interaction to clarify eligibility or preferences. Automated calls and texts for patient engagement can cost between $1 and $5 per interaction, with live interactions costing significantly more.⁴

Each of these steps requires staffing, software platforms, and ongoing patient education—all before a single box ships out the door. VGM’s Total Sleep Services can simplify resupply management by offering automated scheduling systems and comprehensive inventory solutions that ensure timely and accurate resupply shipments. With a best-in-class resupply rate, this can increase resupply rate per patient making a huge impact to the bottom line.

5. What’s the Cost of a Non-Compliant Patient?

The highest cost of all might be the patient who doesn’t stay on therapy. Non-compliance means:

• No resupply revenue: Non-compliance can result in lost resupply revenue, potentially costing HMEs thousands of dollars per patient annually.
• Device returns or write-offs: Non-compliant patients may return devices or require write-offs, costing providers hundreds of dollars per patient.
• Lost trust and fewer referrals: Non-compliance can damage the brand’s reputation, leading to fewer referrals and lost revenue opportunities.

Worse still, non-compliance means the patient’s health outcomes suffer—leading to more hospitalizations, comorbidities, and even mortality. That’s a human cost that no spreadsheet can measure. VGM’s Total Sleep Services can improve patient compliance by offering comprehensive education programs and personalized support that keep patients engaged and committed to their therapy.

Final Thoughts

As respiratory therapists, we advocate for our patients. But as industry professionals, we also understand the pressures HME businesses face in keeping sleep therapy programs viable. The cost of doing business in this space is rising, and many of the expenses— time, expertise, and engagement—aren’t captured in reimbursement schedules.

Thought leadership in this space means being transparent about these challenges while innovating around them. It means better mask fitting protocols, smarter inventory management, improved patient engagement platforms, and stronger payer partnerships that recognize the value of long-term compliance. Because in sleep apnea care, it’s not just about supplying equipment. It’s about sustaining lives.

References

1. Bureau of Transportation Statistics. Freight Facts and Figures. Available from: https://www.bts.gov/product/freight-facts-and-figures

2. Bureau of Transportation Statistics. Latest Supply Chain and Freight Indicators. Available from: https://www.bts.gov/freight-indicators

3. Peters B. Sleep Apnea Treatment Costs: Inspire, CPAP, and More. Verywell Health; 2025. Available from: https://www.verywellhealth.com/how-much-do-different-sleep-apnea-treatments-cost-4177858

4. VirtuOx. The Cost of Sleep Apnea Treatments. VirtuOx; 2025. Available from: https://blog.virtuox.net/post/the-cost-of-sleep-apnea-treatments

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This article was originally featured in the VGM Playbook: Cost Management Trends, Strategies, and Solutions. To read the full article and more like this, download your copy of the playbook today! 

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3. sleep
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