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$5 Billion Industry: A Former Sleep Doctor Proposes a New Approach to Insomnia

Daniel Erichsen is a sleep doctor who has spent over 10 years helping patients with sleep apnea and insomnia.

December 23, 2022
25 minutes
minute read

Daniel Erichsen is a sleep doctor who has spent over 10 years helping patients with sleep apnea and insomnia. He is passionate about helping people get the rest they need and has helped countless patients get the treatment they need to get a good night's sleep.

Erichsen's career took a dramatic turn early last year when he was fired from his hospital job in Oregon. Erichsen, 42, had stopped prescribing sleeping pills to patients and for the most part refused to refer them for expensive and time-consuming tests that he deemed pointless.

Erichsen didn't have a sudden change of heart when it came to his views on medicine. He grew up in Sweden, the son of a doctor and a nurse, and knew from a very early age what he wanted to do. He studied at the Karolinska Institute, a medical school in Stockholm, moved to New York for his residency in 2007, and then did a fellowship in sleep medicine at the University of Chicago.

Erichsen came to the conclusion that the patients were not the problem after years of listening to them describe their struggles with sleeplessness. The problem was the ways they were being treated and their desperate efforts to find a supplement, essential oil, herbal tea, yoga practice, or prescription pill that would fix their issue.

Erichsen said in an interview from his home in Eugene, Oregon that the current system was not working for him. He explained that he was not a fit anymore and that the system was not a fit for him.

The insomnia market is growing rapidly, with research firm Imarc predicting that it will reach $5.1 billion this year and $6.1 billion by 2028. This includes spending on prescription drugs, over-the-counter sleep aids, medical devices and various types of therapy.

Imarc's report found that the Covid-19 pandemic had a major impact on sleep patterns in the United States, with millions of people experiencing increased stress levels and changes in their daily routines. The pandemic also acted as a major catalyst for market growth.

The tech industry has long been capitalizing on sleep and humans' desire to optimize it. Sleep trackers are embedded in devices like the Apple Watch and Fitbit, and there's the smart ring from Oura, which recently sold its 1 millionth ring. In April, Oura raised a funding round at a $2.55 billion valuation.

There are many meditation apps available that can help people sleep, such as Calm, Headspace, and Breethe. These apps typically offer content that is designed to promote relaxation and help people get a good night's sleep.

Other apps promote cognitive behavioral therapy for insomnia, or CBT-I. This therapy is designed to change the way people think about sleep and incorporates behavior changes like sleep restriction and stimulus control. Participants are urged to get out of bed after being awake for a certain amount of time.

There are a number of CBT-I apps available, including Sleep Reset from Simple Habit and Dawn Health. This month, Dawn Health announced that it had secured "strategic funding" from early stage firm Kindred Ventures.

Dawn, a provider of cognitive behavioral therapy for insomnia (CBT-I), announced that its program will now be available at a reduced cost of $225 for the first three months. This is a significant reduction from the previous price of $249.Dawn noted that insomnia affects 49 million Americans and results in $84 billion in health-care costs and $100 billion in "safety incidents and lost productivity." CBT-I programs usually last two to three months.

The company stated that the reduced cost of its program will make it more accessible to those who need it and help to improve the quality of life for Insomniacs.

Erichsen said that, during his years as a physician, he had tried CBT-I with patients, and that it would sometimes work. He added that, other times, a patient would start the program but that he would never hear from the person again. He noted that, for some people, strict sleep restriction imposed an important element of structure in their lives, but that, for others, it created added anxiety and worry — another failed effort to find a cure.

Erichsen listened to hundreds of stories from people with sleep struggles and came to believe that the medical industry was misclassifying insomnia as a sleep disorder. He believes that insomnia should be grouped with depression, anxiety and psychotic disorders.

Erichsen saw it from a different perspective. The people who came to his clinic were scared. They had a few nights of bad sleep from an illness or stressful event. When normal sleep didn't come back, they panicked. They thought something was wrong and that they'd forgotten how to sleep. The internet had stories about the long-term health problems they could have if normal sleep didn't come back.

Erichsen prefers to describe insomnia as a phobia instead of a disorder, reframing how it should be addressed. The common denominator is fear, so addressing it as a phobia may be more effective.

Erichsen pointed out the implications of saying that people with phobias need to take medication to sleep or exercise. He said that this actually worsens the phobia.

Erichsen was removed from his medical practice last year and has since become a full-time sleep coach and evangelist for changing the way people think about sleep. He posts educational content to his YouTube channel, The Sleep Coach School, several days a week and releases the same discussions in podcast form. He also has an app called BedTyme, which combines educational lessons with personalized coaching.

Erichsen's "Insomnia Immunity" program costs $259 a month. A 45-minute call with Erichsen runs for $289 (or $169 for a call with another coach) and BedTyme costs $330 a month.

Erichsen said that the business is hard to run profitably because it doesn’t scale like a tech company. There’s a lot of one-on-one coaching for each client.

Erichsen said that the work is very involved.

Erichsen said that the objective is to help people find their way without needing costly assistance for months on end. He said that most clients are ready to go it alone within two to four months.

Erichsen said that while they celebrate when someone graduates and becomes their own coach, from a business perspective, it's not a problem. The graduate becomes an ambassador and they find somebody else to work with.

Erichsen admits that his approach is still in its early stages. His YouTube channel has a modest following of 7,000, up from 4,000 at the start of the year, and his coaching practice is small enough that he doesn’t think the sleep medicine world is aware he exists.

Erichsen said that while her friends who are doctors think what she does is nice, they don't fully understand it because it is so far off the radar of the medical establishment.

CNBC spoke with another sleep expert to get an industry perspective on Erichsen’s approach. Michael Breus is a clinical psychologist and fellow of the American Academy of Sleep Medicine. He runs The Sleep Doctor website, which was launched in 2008 and is a leading authority in the field of sleep health.

I took a look at Erichsen's website and offered my thoughts via email.

He wrote that this sounds like a disaster and added that Erichsen's methods will give many people false hope. Breus said he gives little to no merit to the idea that insomnia can be best understood as a phobia. After reviewing the site, Breus said Erichsen offers no data on the effectiveness of his approach, yet he seems to feel just fine about now marketing himself with a new method and new theory.

Erichsen responded by saying that while he doesn’t provide data, his YouTube channel has an “abundance of interviews with people who have found benefits with the way we approach insomnia.” He said he avoids most of the industry metrics, because they “lead to the idea that sleep can be controlled and that we should achieve a certain sleep score or number after putting in a certain amount of work.”

Some controversy has emerged in public discourse.

Saniya Warwaruk, a dietician-in-training at the University of Alberta in Canada, gave a TEDx talk at her school in May. The event's theme was "Finding light in the darkness."

Warwaruk, 33, was coming off a year of debilitating insomnia, which she chronicled recently in a first-person story for the CBC (Canadian Broadcasting Corp.) website. In May 2021, Warwaruk had a few bad nights, waking up at 3 a.m., and was unable to get back to sleep. As the struggle persisted, she started using supplements. Warwaruk's insomnia began to improve after a few weeks of using the supplements, and she is now able to sleep through the night.

"Then came the appointments - the blood work checking for tumors and hormones, the electrocardiogram, the sleep study," she wrote. "Aggravatingly, the results showed that I was perfectly healthy. Yet, the more I chased after sleep, the less I slept."

In her TEDx talk, she described how her anxiety and fear would increase when she would try something new and it would fail. She also tried CBT-I, which resulted in her feeling even more anxious and stressed. In an interview with CNBC, she said that these were the darkest days of her life.

After several months of struggling with anxiety and brain fog, Warwaruk briefly went to live with her parents in Calgary. Soon after her return home, her husband stumbled upon Erichsen’s ideas online.

After watching Erichsen's videos, Warwaruk realized that this approach was different from CBT-I. CBT-I requires sleep restriction, staying awake for 15 minutes if awake in the middle of the night, and avoiding daytime naps. Erichsen's methods are designed to reduce the intensity level and help the person recover more gradually.

She established a sleep window for herself, providing a finite period for sleep each night. This sleep window allows her to get the rest she needs without having to limit it to six or fewer hours at the start.

Warwaruk quickly learned that if she could train her brain to not fear, the cycle could reverse. Instead of constantly seeking solutions, she woke up every day and lived as if she didn’t have insomnia. She exercised, hung out with friends and concentrated on her studies even if her sleep wasn’t great. She stopped trying to make sleep happen.

At a TEDx event, she said, "No pills, no treatments, no therapies, no teas, no sleep hygiene, nothing. I was no longer to chase after sleep." She would even watch TV shows during her middle-of-the-night wakefulness, "breaking the cardinal rule of no blue screens." Her preference was "Seinfeld."

She started to sleep better gradually, with some setbacks along the way. Eventually, she was able to sleep without feeling anxious about it. She told her story to a small crowd in Alberta.

Unless you have the YouTube link for Warwaruk's talk, you won't be able to find it. TED has marked it as "unlisted," so it doesn't appear in search results. Here's TED's explanation, which appears below the video:

Please note that this talk is not intended to be a substitute for professional mental health advice. The speaker's personal experiences and understanding of anxiety and insomnia are reflected in this talk, but further scientific investigation is needed to confirm the efficacy of the therapies discussed. We have flagged this talk because it does not meet TED's content guidelines for TEDx organizers.

TED did not respond to a request for comment. Erichsen said that TED's action is "the first sign of friction" that he has seen in public involving his approach. He would prefer to have the material readily available for anyone to see, but he understands why there would be resistance. The medical establishment has defined insomnia in particular ways, and organizations like TED don't want to risk promoting viewpoints that could be seen as anti-science.

One of the regular segments on his podcast is called "Talking Insomnia," featuring people who have overcome the struggle with insomnia, whether using his program or another one. Earlier this year, he published a book titled "Tales of Courage: Twenty-six first-hand accounts of how insomnia ends."

Warwaruk is one of the case studies in the book. Another is Beth Kendall, a 54-year-old Minneapolis native, who says she struggled with insomnia for 42 years, starting when she was 8 and her parents moved her bedroom upstairs to the attic.

Kendall says that the move to the attic made her feel like she was being isolated from her family, and that the insomnia made her feel even more alone.

Kendall's insomnia has been sporadic for decades. She has gone through periods of good sleep and bad sleep, often leaving her exhausted, confused, and desperate for answers. She has tried many different medications and teas, but has yet to find a solution that works for her.

Kendall also tried CBT-I, but found that it didn't work for her. In a blog post about why sleep restriction doesn't work for everybody, she said the feelings of guilt and failure that followed her initial efforts made sleep even more elusive and turned her into a "walking zombie."

"It was tough," she said in an interview.

Before finding Erichsen a few years ago on social media, Kendall's condition had started to improve. She was working in the mind and body space and was certified in tapping, a practice that draws on acupuncture. She started to see insomnia as a mental program, and that the coding just had to be changed.

Kendall started writing about sleep and found that her ideas resonated with a lot of people. They began contacting her for advice, which led to her becoming a casual coach, and then a professional one. She's even worked with some of the newer sleep apps. (I was lucky enough to have her as my coach on one of them earlier this year.)

Kendall's eight-week program, Mind. Body. Sleep, helps clients understand why insomnia happens, how to respond to it, and how to be OK with wakefulness. The program includes short videos with lessons, individual coaching sessions, and regular emails.

Kendall said that the beginning of the journey is very educational, laying down the accurate knowledge. At the end of the program, she also talks about what leaving insomnia looks like and some of the patterns.

Kendall's message is that sleep is simple, but insomnia makes it seem complex. We try to fix it by doing more and then follow failure by doing even more. But what we should do is less. This mirrors much of Erichsen's teachings.

If you want to beat insomnia, you need to pay attention to it. Starve it of your attention, and you'll start to see changes.

Sleep is a passive process that happens without any effort on your part. You don't need to do anything for it to occur.

There is some debate over whether or not melatonin actually helps you sleep. Some people swear by it, while others say it doesn't make a difference. The jury is still out on this one, but it's definitely worth a try if you're struggling to get a good night's rest.

Valentyna Semerenko
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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