The electronics industry thinks it has the right prescription for the world's ailing health care systems: digital technology and broadband communications.
Health care costs continue to rise every year. The lion's share of those costs — 75 to 85 percent — are from the management of chronic diseases, according to World Health Organization estimates. Worldwide, nearly one billion adults are overweight and 860 million people suffer from chronic diseases. Diabetes alone affects more than 20 million people in the U.S., costing some $132 billion annually, according to the American Diabetes Assoc.
What's more, mistakes due to handwritten orders and paper records lead to medical errors that cause further illness or even death. A 2000 study by the U.S. Institute of Medicine at the National Academies found that medical errors kill between 44,000 and 98,000 people a year. Many suspect the figures are much higher.
“We cannot sustain as a society the traditional model of delivering health care,” says Marc Holland, research director at Health Industry Insights, a division of International Data Corp. With an aging population, many of whom will develop chronic diseases as they grow old, and a predicted shortage of doctors and nurses over the next two decades, health care is going to have to move into the home, says Dr. Joseph C. Kvedar, director of Partners Telemedicine, a division of Partners Healthcare.
Today many patients with chronic conditions must visit their doctors only so blood sugar, blood pressure, breathing capacity and weight can be monitored. Although electronic glucometers and blood pressure cuffs are on the market, the information from such devices needs to be collected and sent to an expert who can watch for signs of trouble. Such regular monitoring would not only cut out those expensive office visits but could also head off health crises that result in lengthy and costly hospital stays.
This need, along with the increased availability of broadband in the home, points to a promising market for home health products and services.
Although it was only a $461 million market worldwide in 2005, it is expected to more than quadruple in the next six years, reaching $2.1 billion in 2010, according to Parks Assoc., a consulting company.
And the development of home medical devices would dovetail nicely with a years-long push to transform mountain ranges of paper health care records into efficient and more current and portable electronic records. Accessing patient records at the touch of a button promises to improve efficiency, cut costs, reduce errors and improve healthcare, say proponents. Although the push for electronic health records has been impeded by a lack of standards, privacy concerns and resistance from physicians, the movement was boosted by President Bush last year when he proposed a national Health Information Technology Plan in his State of the Union address.
These trends have not gone unnoticed by the electronics industry. Last year, Intel formed a new business unit to focus on the market. And in June the company helped launch the Continua Health Alliance, a consortium of more than 20 electronics, medical device and healthcare companies. The consortium's goal is twofold: to devise interoperability standards for digital medical devices and to promote ways government programs and insurance companies might pay for the care enabled by this technology.
Continua focuses on three market segments, says David Whitlinger, chairman of Continua and director of healthcare device standards in Intel's Digital Health Group. First is the proactive health and physical fitness market. These are the “worried well,” says Wes Rishel, managing vice president of Gartner Healthcare— healthy individuals who spend a lot of time and money on treadmills, weight machines and personal trainers to stay fit. The second market is chronic disease management. This includes devices such as glucometers that would wirelessly send readings to a doctor or nurse-practitioner. And the third market is monitoring systems for the elderly. These include sensor-based systems that can track whether, for example, grandma gets out of bed in the morning. (For more information, see “Sensors look out for the elderly” on page 78.)
But, as the formation of Continua shows, there are some significant barriers in this market.
The biggest barrier is that most health insurers don't reimburse physicians for these devices and services. Why? Although there is anecdotal evidence and statistics from small trials, there have been no large-scale clinical studies showing that these devices reduce costs and improve healthcare. It's a classic chicken-and-egg problem. Large health insurers want proof before they start paying, but they aren't willing to fund a large-scale study that might produce such proof.
But as costs continue to skyrocket and evidence mounts that technology really helps, proponents are betting that large insurers and government organizations will loosen their purse strings. For instance, Medicare is conducting a long-term project that could prove the efficacy of digital home devices and services. The healthcare providers participating in the study have been challenged to reduce the costs of caring for 200,000 of Medicare's most expensive patients by at least 5 percent. Although the study doesn't specify how the providers are to do this, Kvedar says that many of them are likely to use digital products and services.
Meanwhile, some vertically integrated healthcare systems have an incentive to try the technology sooner rather than later. Kaiser Permanente, the largest health-maintenance organization in the U.S., has 8.4 million members, employs 12,000 physicians and runs 30 major medical centers. Because it both pays for and provides healthcare, it has a strong incentive to use technology that can lower costs, improve efficiency and improve outcomes.
“If it's effective, we're willing to pay for it now,” says Michael Robkin, a principal enterprise architect at Kaiser Permanente. For the same reason, countries with socialized medicine might be willing to adopt these technologies before countries with private health systems, he notes. “Therefore, the market might blossom internationally before it blossoms in the U.S.”
But even if they are willing to use the technology, an interoperable infrastructure has to be built before it will produce full cost savings and efficiency. Most devices today are proprietary and don't interoperate with other products. “These proprietary solutions are expensive, and they limit how we can use the information,” says Robkin.
Kaiser Permanente is spending $1.8 billion to have Epic Systems, a software company in Madison, WI, implement an electronic medical records system throughout the healthcare organization. Ideally, home medical devices would use standard data formats that could go directly into a patient's electronic records. “We want to be able to integrate this with our systems so we can use all the data we collect,” says Robkin.
That's the primary goal of Continua, which aims to publish interoperability guidelines based on common standards such as Bluetooth, USB, WiFi and ZigBee. Whitlinger says the guidelines will be available by the fourth quarter of 2007. The group will also run a certification program to guarantee that products will work together. Products bearing certification logos could be on the market by early 2008, he says.
Another barrier is the difficulty of using the technology. Continua's membership includes big-name consumer electronics companies, such as Sharp and Samsung, that know how to build products that are easy for consumers to use, says Whitlinger. And indeed, making them “iPod-simple” is imperative, says Kvedar. “Today, we have to send an engineer to a patient's home in about one in 10 installations.”
But a home health device will handle information that is much more important than that on an iPod. “Some of these companies will have to adjust to a very different kind of business environment,” says Robkin. “Healthcare is different from the consumer market. It's different in how things are paid for, in the performance levels required and in the expectations regarding privacy and security.”
And there are certain to be regulatory hurdles as well. Some of these devices, for example, may require approval by the U.S. Federal Drug Administration, says Robkin.
That's why Continua is aiming at the “worried well” market first, notes Rishel. Consumers can buy these devices without the approval of a health insurer, interoperability isn't crucial and device failure shouldn't result in critical illness or death. Rishel thinks it will take at least three to five years for the other two market segments to bear fruit.
With luck, the barriers to the broader healthcare market may begin to fall just as Continua-certified products come on the market. The large Medicare study ends in 2009, notes Kvedar, and if the results prove the efficacy of digital medicine, then Medicare could start reimbursing for it. If that happens, large insurance companies would likely follow. “The thing about Medicare is that when it moves, it moves the market.”
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