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

Karen Minich-Pourshadi, for HealthLeaders Media, August 29, 2011

As operations grew, Genesys moved its labs off-campus to help keep costs low and provide a better site for patients. “It’s also quieter, which is better for the patient,” Brown notes.

Brown says an off-campus sleep center can be built for approximately $500,000, with the majority of the cost going to creating a hotel-like site for the patients to relax and sleep, as well as some basic equipment such as digital diagnostic equipment and a digital video recorder.

Virtua, a four-hospital health system based in New Jersey, launched its sleep lab with one hospital bed back in 1994. Virtua has since moved its sleep labs out of the hospital and now operates four centers, totaling 20 beds. The start-up cost for the centers has been minimal, explains Dean Mazzoni, vice president of operations for Virtua’s SleepCare Centers, in part because Virtua rents the property for these centers and contracts with SleepCare in Mount Laurel, NJ, to oversee the operations.

Mazzoni says partnering with an established sleep lab company like SleepCare has helped keep costs low and brings technical and clinical expertise. “We expected our volumes to get us to the break-even point the first year, and it has. We’ve been at break-even or above now for years,” he says. The same is true for Genesys, which earns a net profit of $600,000 to $700,000 and revenues of $1.7 million annually from its two sleep centers.

My column last week encouraged you to stop trying to cut your way to prosperity, instead looking for unique approaches to growth. If your community has a need for a sleep center, don’t snooze or you may lose on this money-making service line.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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1 comments on "If You Snooze on Sleep Centers, You'll Lose $$"


DonS (9/2/2011 at 11:08 AM)
I dont disagree with the points made in the article, but would caution that we may be on the downside of Sleep. Payers (including employers) are questioning the high costs and reimbursement rates (at least in my area) are coming down. In addition, there are home sleep tests which are taking some volume. CLinically there are arguments against them, but there are a certain number of patients who will opt for these as a preliminary screening and avoid the overnight $2500 sleep study. So like any project, research your market to be sure it is right move for you.