If You Snooze on Sleep Centers, You'll Lose $$

Karen Minich-Pourshadi, August 29, 2011

If you are looking for a new service line to add—one that could be a dream to get off the ground—then don’t rest until you determine if your community needs a sleep center. In the past decade, the number of people reporting sleep problems has increased nearly 13%, according to the National Sleep Foundation. The growing number of potential patients, combined with a low start-up cost, minimal operating expense, and high level of reimbursement, makes this service line something you shouldn’t sleep on.

On average, hospital-based sleep labs bring in $1,100 to $1,200 revenue per patient from third-party payers, against an expense per patient of approximately $600, earning a net profit of $500 to $600 per patient visit. If the volume is sufficient, the center can break even or even make a profit within the first year.

Since their inception in the 1970s, nearly 3,500 sleep labs or centers have been opened across the country. Approximately 1,400 of these centers are accredited by the American Academy of Sleep Medicine. Research supports the need for these facilities; new studies link sleep disorders with increased risk of stroke, cardiac disease, diabetes, rheumatoid arthritis, metabolic disorders, and other ailments.

Making sleep centers even more attractive to healthcare financial leaders is that these facilities can operate as an ancillary service, either in-house or as satellites off-campus. Yet for billing purposes, hospitals and health systems are still able to use the same provider number without sacrificing the most expensive real estate—a hospital bed

Paul Brown, manager of non-invasive cardiology and sleep labs at Genesys Regional Medical Center in Grand Blanc, MI, says that over the past 25 years, he has seen steady growth in sleep lab service lines, from one bed in 1985 to two off-campus locations today, 10-bed and 4-bed facilities.

Karen Minich-Pourshadi Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media. Twitter
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