The opportunity for connected medical devices is vast and growing. With global populations aging, and with increased pressure for healthcare providers to reduce cost and improve outcomes, the Internet of things (IoT) will play a pivotal role. The promise of digital health has long been “better quality care at lower cost,” and expectations for the market have been high. However, slow uptake and lack of significant scale has led to some skepticism about the impact of consumer-oriented technologies on healthcare delivery.
There were approximately 500 million digital health devices shipped globally in 2015. About 130 million had the capability to be installed in a smart-home environment. In comparison, the North American and Western European personal emergency response system (PERS) market had about 5 million monitored accounts, with about 80 million independent living accounts in North America.
Among the many opportunities for connected medical devices is increased accessibility and coverage, including cost optimizing, customized medical services, real-time diagnostics, predictive care through monitoring and algorithms, streamlined access to records and transparency of services. With opportunities come barriers, however, including cost management, country- and healthcare-system-specific regulations, disruption of services and problems with infrastructure availability.
Despite the market growth and potential of the digital-health market – including clinical care, consumer medical, sports and fitness, and remote and virtual care — smart home providers will not likely widely deploy these types of health-related devices. Instead they will leverage the existing strengths and core competencies of security and PERS. More specifically, independent living and wellness offerings will bring the most market growth for service providers in the near future.
On the other hand, FDA and HIPAA regulations, which are involved in deploying medical-grade devices, inhibit growth, since most service providers are not in a position to provide these offerings. More specifically, most multiple-service operators (MSOs) and security providers are not permitted to provide medical recommendations. As a result, databases, sales staff and monitoring centers for biometric-related data remain separate from security.
The number of monitored independent living accounts will represent only about 2 percent of smart home subscriptions through 2019. High attrition rates mean the market will remain small, as these systems are normally installed near the end of the time seniors can live independently. Achieving market growth can be difficult, as service providers must fight against low contract lengths and high attrition. In spite of this situation, the independent living and wellness services market will begin to grow, as more MSOs and service providers promote their offerings.
Likewise, the cycle of deploying wellness and independent living is a slow process. Some providers have had solutions in place and in pilot phases for years and are only now starting to provide their offerings to dealers. As a result, the market is small and competition is low.
Existing service providers looking to successfully enter the healthcare market must target people with aging parents and allow them to manage both their own system, and their aging parent's system, on a single platform. While in the past, security service providers targeted homeowners, the sales dynamic will change, because independent-living solutions will target the children of seniors, rather than the seniors themselves.
The overall healthcare industry is now moving toward outcome-based services. For example, after leaving a hospital with a diagnosis of hypertension in the past, patients might only receive brochures and basic information to refer to, while today they may leave their doctors' offices with blood pressure devices that allow notifications to be sent directly to their physicians. The natural extension for service providers has progressed from security to health. Independent-living platforms can promote better outcomes for aging senior citizens, by informing physicians how their patients are living, expediting additional care when needed and potentially predicting future needs.
With the majority of smart-home media coverage and marketing focused on security and utilities, connected entry door locks and thermostats continue to lead the adoption and value perception for smart home solutions. Elderly monitoring and health devices are perceived to have less value and owned devices. Even so, the shift toward independent living and wellness will bring new opportunities, targeting a large and aging segment of the market that would likely benefit more from passive care than security.