Highmark Health is diversifying its for-profit operations with a first-of-its-kind retail store focused on sleep apnea and other sleep problems.
Highmark, the state’s largest health insurer, which operates a national chain of vision stores, said it will open a REMWorks Sleep Store in the Waterfront shopping center in Homestead in December.
While the $17 billion health system is planning only a single store as a pilot project, the company could expand the concept outside of Pittsburgh, giving it a foothold in the fast-growing market for treatments for sleep disorders, said Amy Phillips, director of REMWorks.
“As we’re successful, we would like to make this accessible to more and more people,” she said.
Highmark owns the state’s largest health insurance company with subsidiaries in Delaware and West Virginia, Pittsburgh’s second-largest hospital network and a trio of for-profit businesses in dental, vision and re-insurance. Its vision subsidiary owns the Vision Works chain, which has more than 570 stores.
The market for sleep apnea equipment is predicted to be worth $2.5 billion by 2017, up from $1.5 billion in 2010. Part of that growth is being driven by a recognition that an estimated 80 percent of people with the condition — in which people stop breathing temporarily during sleep — have not been diagnosed.
“There’s a large population in the U.S. that does not recognize that they have sleep issues,” Phillips said.
Highmark is hoping that an upscale store in a fashionable shopping center will attract people who have trouble sleeping but have not been diagnosed with the condition. REMWorks will sell the prescription devices used to treat sleep apnea — continuous positive airway pressure, or CPAP, masks and pumps — but it also will offer a variety of nonprescription sleep aids and devices.
“REMWorks Sleep Store is not a mattress store, and it is not a sleep lab,” Phillips said. “REMWorks will offer products to address various sleep problems and provide education about treatment options to help people get the sleep they need.”
The store will compete against durable medical equipment suppliers, the primary way in which patients buy CPAP equipment. Highmark has obtained a license as a durable medical equipment supplier, Phillips said.
While some suppliers have retail stores, none are solely focused on sleep, said Jim Seles, vice president of sales and marketing for Circadiance, an Export-based maker of CPAP masks. The company is in discussions with Highmark about selling its products at REMWorks, he said.
“There have been some other sleep stores out there, but none with CPAP,” Seles said. “I think having Highmark doing this is really unique.”
Officials with Philips Respironics, a Murrysville company that invented CPAP as a treatment for sleep apnea, were not available for comment.
Highmark, which insures about 4 million Pennsylvanians, has said it pays claims for sleep apnea equipment for 72,890 members at a cost of $60 million a year. That could give the company a built-in customer base, but Phillips said there are regulations that may prevent the insurer from steering its insurance subscribers to a company-owned store.
“We’re still working through incentives,” she said. “I think there are opportunities for us to collaborate more.”
Date: October 30, 2014