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7/28/2019 Healthcare Videoconferencing Lifesize Wp

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A Frost & Sullivan White Paper

Prepared by Iwona PetruczynikIndustry Analyst

The Growing Use ofVideocon ferencing in the Healthcare Market

A Frost & Sullivan White Pape

Prepared by Iwona PetruczyniIndustry Analyst


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ContentsAbstract

...............................................................................................................................

3

ExecutiveSummary............................................................................................................. 4VisualCollaborationintheBroaderContextofTelemedicine................................... 4

TheAgingPopulation.......................................................................................................... 5KeyFactorsintheGlobalHealthcareMarket................................................................. 6

PopulationsLivinginRemoteAreas................................................................................... 7FactorAffectingRemotePopulations............................................................................. 7

InformationandCommunicationTechnologiesinHealthcare........................................... 8Top

Industry

Challenges

to

Visual

Collaboration

in

Healthcare

......................................

8

TelemedicineBenefitsOverview........................................................................................ 9KeyIndustryChallengesAddressedbyPricePerformanceLeadership............................ 11

AboutLifeSize................................................................................................................ 11Criterion1:PriceCompetitiveness............................................................................... 12Criterion2:Features..................................................................................................... 12Criterion3:EaseofUse................................................................................................. 13Criterion

4:

Service

Support

..........................................................................................

13

Criterion5:ProductMatchedtoClientsNeeds............................................................ 13ABOUTFROST&SULLIVAN............................................................................................... 14

Abst ract

Theincreasingdemandfortheservicesofbothpublicandprivatehealthcareorganizationsis

beingdriven

by

factors

including

the

aging

population

in

Western

countries

and

the

need

to

accessremotepopulationsfromcentralizedfacilities.

Communicationstechnologyisplayingan increasingly importantroleinallowinghealthcare

providers to extend the reach of scarce or expensive expertise, and videoconferencing

technology iscontributingdirectly inapplications suchaspatientmonitoring,consultation

andcounseling.


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Bothhealthcareorganizationsandvideoconferencingvendorsarerealizingthepotential in

using inexpensive standard offtheshelf videoconferencing products in these types of

applications, helping providers achieve immediate saving benefits, and helping vendors

developbothknowledgeandspecializedproductoffersinthegrowingmarketsegment.

Executive Summary

Thepractice

of

telemedicine

is

undergoing

significant

evolution

along

with

the

advances

taking place in the overall videoconferencing market. These changes are creating new

challengesforvideoconferencingserviceprovidersastheycontinuetoaddressamarketthat

remains highly under penetrated. For these reasons, healthcare practitioners are

increasingly adopting interactive video or videoconferencing applications to deliver

enhanced access to healthcare as well as to improve the quality of that care at reduced

pricesacrosstheglobe.

VisualCollaborationintheBroaderContextofTelemedicine

BroadScopeofTelemedicine

Telediagnosis Telecounselling

Transfertheresultsofthe

patientobtainedfrom

variousteststothephysician

orspecialists

Diagnosisiscarriedoutin

thephysiciansplacewith

theresultsreceived

Thediagnosisresultisthensentbacktothephysician

whorequestedforthe

diagnosis

Consultationregardingthehealth

issuesofapatientbetween

specialistsandphysicians

Counselling given to the

patient regarding their illness

byaphysicianoraspecialist

Teleconsultation/

RemoteCollaboration

Focusforuseofstandardvisualcollaborationproducts

Source:Frost&Sullivan


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The number of telemedicine programs around the country is growing, and they are

encompassing an increasing number of medical fields. A few years back the costs of

telemedicinevideoconferencingsystemsandtransmissionserviceswereamajorbarrierto

deployments. In the last twoyears,equipmentpriceshavecomedowndramatically while

endpointfunctionality,particularlyvideoquality,hasimprovedsubstantially.

Telemedicineis

unique

among

all

videoconferencing

end

user

applications

in

the

fact

that

it

involves the most critical and sensitive cases. There has been resistance from physicians,

healthcarestaffaswellaspatientsduetoalackofconfidenceinthetechnologyanddueto

cultural and behavioral factors. Doctors who have traditionally considered facetoface

contactwithpatientasaprimarymodeoftreatmenthaveyettoaccepttelemedicineasa

properstandardofmedicalcare.

While videoconferencing remains a primary telemedicine technology, several other

communicationelementssuchasInternetcommunications,teleradiologyandtelepathology

equipment,storeandforwardvideoorvideoondemand(VOD)areincreasinglybeingused

asprimaryinformationdeliverysourcesforthetelemedicineindustry.

Thereare still significantobstacles to fullacceptanceandwidespreaduseof telemedicine

technologies.However,oncetheobstaclesareovercome,thereexistsa largepotentialfor

growth.The successof videoconferencing in telemedicineenvironments in the futurewill

depend mostly on how well it can be aligned with the specific needs of the healthcare

institutions.

Some of the most significant benefits of telemedicine are demonstrated in its ability to

extend the geographic reach of medical care and provide access to medical specialists in

remote and rural areas. However, restrictive reimbursement and legislative policies are

limitingthereachofexistingtelemedicineprograms.

Since

telemedicine

technology

offers

training

and

educational

benefits

to

medical

professionals and organizations at reduced costs, there is great interest in the medical

community regarding telemedicine. However, there remains a resistance from traditional

healthcare facilities thatareunfamiliarwithnewtechnologies. Inaddition,manypotential

adoptersoftelemedicineareseeingresistancefromtheirmedicalstafffearingthattheywill

bereplacedbynewandmoreefficientpracticesbroughtbytelemedicineprograms.

The Aging Population

The rising median ages of the worlds population is caused mainly by a decline in the

fertilityrateandariseinaveragelifespan.

Increase

in

the

percent

of

individuals

who

remain

unmarried

or

do

not

have

children

is

one

ofthemainreasons inthedeclineof fertilityrate,andbythesametokenthedecline in

birthrate.Moreover,averagelifespanorthelifeexpectancyincreasedoverthelastdecades

thankstosignificant improvements inhealthcondition,mainlyduetoadvances inmedical

technology.

By2010,thefirstbabyboomgenerationwillreach65yearsofageandby2030,itwillbein

their 80s and the second baby boom generation will be in their 60s. Despite great

successesinextendingpeopleslives,theagingthepopulationcreatesmajorchallengesto


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countrieseconomicconditions,as it financing isputtinga strainon the sustainabilityof

publicfundsincountriesaroundtheworld.

KeyFactorsintheGlobalHealthcareMarket

Thedisparity innumbers between retirees andactive workers willmagnify spending on

public pensions, health and longterm care and will put great pressure on legislative

branches to keep a balance between increasing public spending and tax revenues. The

socialimplicationwouldincludelongtermelderlycaremainlyduetothechangingdisease

profilefromchronicandinfectiousdiseasestononcommunicablediseaseswhichprolongs

apatient'slife.

As a result of trends like falling birth rate and rising life expectancy, the total worlds

populationwilldeclineandthepercentofpeopleaged65yearsandabovewill increase.In

economicterm,

the

working

age

population

in

the

15

to

64

year

age

group

will

decrease.

Thedependency ratioofpeopleaged65yearsandabove relative to thoseaged15 to64

yearswillincreaseby2050.

Forexamples, inEuropethedemandfor laborwillgrow,as20.0millionworkerswill leave

theworkforcebetween2008and2050.Thisimpliesthattherewillbetwopersonsinsteadof

fourintheworkingageforeverycitizenaged65andabove.

Canada

Relativelyhighgovernment

spendingonhealthcare,small

numberoflocalmarket

players,sizeable

market

UnitedStates

Hugehealthcaremarketand

growing,largeopportunities,

nicheplayerswillbemore

successful

Venezuelaand

Colombia

ConstitutingpartoftheAndean

Region,thesearethefastest

growingcountriesinmany

healthcarecategoriesdueto

largepublic investment

BrazilandMexico

Twolargesthealthcare

marketsinLatin

Americaandgrowingat

asustainedpace

GermanyandSwitzerland

Highspendingonhealthcare,

largemarketwithnottoo

manymarketplayers,

increasingfocusoneHealth

and digitization

UKandtheScandinavian

Countries

Highgovernmentspendingon

healthcareIT,largemarket,

highnumber

of

healthcare

IT

players

SubSaharanAfrica

Limitedcurrentgovernment

spendingonhealthcareIT,

increasesplannedinthefuture.

Privatesectordeveloping

increasingfocusoneHealth.

Moderatenumberofplayers

mainlyoperatingfromSouth

Africa.

AustraliaandNew

Zealand

Highgovernments

pendingonhealthcareIT,

smallnumberoflocal

marketplayers,increasin

focusoneHealthand

digitization

India

Largemarket,lowoperating

costs,excellentlocalskills,

highlocal

competition,distribution

hubtotheMiddle and

SouthEastofAsia

HongKong

Highgovernment

spendingon

healthcare,small

domesticmarket,

gatewaytoChina

Source: Frost &


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In Japan thehealthcarecost is risingwith the increase inelderlypopulation.Around40.0

percentofthehealthcarecostgoestowardelderlyhealthcare.TheJapaneseGovernment's

spending on medical insurance and pension benefits is expected to grow significantly by

2030.

Currently, theU.S.Government'sexpenditureson thoseaged65 yearsandaboveare3.9

timeshigher

than

that

on

children

aged

under

18

years.

The

next

three

decades

will

pose

significantchallengesfortheSocialSecurityprogram,thefederalGovernment,andtheU.S.

economy,withtheretirementofthe77.0millionbabyboomerswhowillsoonbegintodraw

benefits.

Populations Living in Remote Areas

Oneofmajorissuestheworldhealthcaremarketisfacingisthehighnumberofpopulations

living in remoteareas. Forexample, in India,72.0percentof thepopulation lives in rural

areas.

Vast landareawithdifficult/ inaccessibleterrainmakes itconducive for technologytobe

acceptedasamethodofhealthcare. Seasonalisolationofsometractsoflandduetofloods,

snowandotherfactorsareseverelylimitingaccesstomedicalinpersoncare.

Healthcareprofessionals located inruralcommunitiesneedtomaintaintheirskillsthrough

continuingeducation.Theyalso facesignificantbarriers,since theyoftendonothave the

time to travel to cities where continuing education is offered and they often lack the

requiredcommunicationsinfrastructuretoaccesstrainingsessionsremotely.

Anotherchallengethatremoteareasaredealingwith isthatsmallruralhospitalsarebeing

closed,whileothersreducethe levelofserviceandthenumberofbeds.Additionallymany

ruralhealthcare facilitiesare facingconsiderable financial restraints.This ispartlybecause

these hospitals are small, offer a limited scope of specialty services, and are especially

vulnerableto

policy

and

market

changes.

The distances to main metropolitan centers oftenimplyrestrictions onaccess to essential services

Great Distances

In recent years many small rural hospitals have closed

Lack of Healthcare

Infrastructure

Only a small percent of the countrys physicians andspecialistspractice in ruralareas

Lack of Healthcare

Resources

Changes to the paymentsystemhave had a negativeimpacton the financialviabilityofruralhospitals

Medicare Reimbursement

Rural populationsaregenerallyolder Tendto experience higherpovertyrates Tendto be in poorerhealth Generallylesseducated Characterizedbylowerlevelsof insurancecoverage

Generallyexperiencehigherratesofchronicdisease

Rural Versus Urban

Populations

Source: Frost & Sullivan

FactorAffectingRemotePopulations


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Information and Communication Technologies in Healthcare

Information and communication technologies (ICT) are a major tool for information

intensivesectorsthathandle,store,shareandprocessmassiveamountsofdata,information

andknowledge.

Telehealth is a combination of telemedicine and telecare along with the management of

healthcareservices.

This

acts

as

an

umbrella

to

define

all

the

services

that

have

resulted

in

revolutionizing the healthcare sector which is being facilitated by the innovations in ICT.

Oncepatientsbecomeacquaintedwithanewtechnology,theconceptofvirtualdoctorwill

becomemoreacceptable.Issuesliketheneedtotaketimeofftogotoadoctororageneral

reluctancetowardshealthcareproviderswilllikelylessenamongpatients.

According to the World Health Organization, telemedicine is "the delivery of healthcare

services,wheredistanceisacriticalfactor,byallhealthcareprofessionalsusinginformation

and communication technologies for the exchange of valid information, for diagnosis,

treatment and prevention of disease and injuries, research and evaluation, and for the

continuingeducationofhealthcareproviders,allinthe interestsofadvancingthehealthof

individuals

and

their

communities.

Source: Frost & Sullivan

Human Patient/provider reluctance Medium Medium Low

Financial Research funding

Reimbursement

High

High

High

High

Medium

Medium

Medico-legal Security and confidentiality

Risk of malpractice

Medium

Medium

Medium

Medium

Medium

Medium

Technological Limitedaccesstoequipment

Needforinteroperability

High

High

High

High

Medium

Medium

1-3YEARS 4-5YEARS 6-7YEARSCHALLENGE

TopIndustryChallengestoVisualCollaborationinHealthcare


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Conclusions Evolving patients needs, limited number of medical specialists in remote areas, and the

technological advances are some of the most important factors driving interest in visual

collaboration in healthcare. Patients are becoming keener to get faster access to

professional advice and are striving to achieve the same convenience in healthcare they

benefitfrominotherserviceindustries.

Thereareseveralissuesthatthemarketofvisualcollaborationinhealthcaremustovercome

toachieveawideradoption.Thefinancialchallengesinvolvereimbursementoffunds,issues

of how to pay doctors for longerterm care, and how tojustify use of telemedicine in

hospitalswhentheendresultwillbeacutinhospitalstays.

Additionally,on the technology side, the telemedicinewillhave tobe integratedwith the

electronicmedicalrecords,aswellassysteminteroperabilityissueswillhavetoberesolved.

Moreover,medicalstaffwillhavetobetrainedtobeabletocoordinateremotecare,and

willhavetocopewithlegalliability,accreditationandlicensingissues.

Itisafactthatinformationandcommunicationtechnologieshavetremendouspotentialfor

improving

health

care,

but

it

should

be

borne

in

mind

that

to

take

advantage

of

that

potential, adequate infrastructure is necessary. In the rural areas of many developing

countries,thelackoftheinfrastructureismoreevident.Notonlyistherenotahighrateof

broadband access; even the more basic amenities and telecommunications modalities,

includingtelephonenetworks,computersandelectricity,canbescarce.

Anotherimportantfactoristheoftendeficientandinadequatetransportationinfrastructure.

The negative consequences of these deficiencies include poorly trained personnel,

inappropriate maintenance and control systems and limited ability to gain access to

expensivetelecommunicationinfrastructure.

Visual collaboration vendors are finding that there is an opportunity for off the shelf

videoconferencingproducts

as

an

entry

point

into

the

healthcare

market.

It

is

acheaper

optionforhealthcareprofessionals,astheyarenotpurchasingdedicatedcarts,butstandard

videoconferencingsystems,whicharemorepriceeffectiveandeasiertouse.Itisafootina

door for visual collaboration manufacturers because they are not only familiarizing the

healthcare professionals with videoconferencing, but also are introducing their dedicated

pieces of equipment. Effectively, as the market becomes more commoditized and more

competitive, thedirectionthatvisualcollaborationvendorsneedtotake inordertoavoid

thiscommoditizationistoaddvalueintocertainverticalmarkets.


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Key Industry Challenges Addressed by Price Performance LeadershipThe global healthcare market is undergoing a rapid evolution, with new technologies

introduced constantly. Now, conducting a surgery remotely across countries or even

continentsisnotadreamanymore,itisarealitythankstovisualcollaborationtechnologies.

Despite rising popularity, there are several issues that the

marketof

visual

collaboration

in

healthcare

must

overcome

to

achieve a wider adoption. The financial challenges involve

reimbursementoffunds,issuesofhowtopaydoctorsforlong

term care, and how to justify the use of telemedicine in

hospitals when the end result will bea reduction in hospital

stays.

Additionally,onthetechnologyside,thetelemedicinewillhave

tobe integratedwith theelectronicmedical records,and the

issuesofneededaccessibilityandbandwidthinfrastructure,as

well as system interoperability will have to be resolved.

Moreover,medical

staff

will

have

to

be

trained

to

be

able

to

coordinate remote care, and will have to cope with legal

liability,accreditationandlicensingissues.

The lack of interoperability between some video endpoints, poor infrastructure in certain

regions in the world and a general mistrust of the technology by those who have

experiencedpreviousgenerationsofvideoconferencingandfind it isdifficulttouse,pricey,

andnotmatchingtheirneeds,alsohindersthevisualcollaborationmarket.

Insuchsituations,effectivepricingstrategiesareofparamount importance,astheybetter

positionvisualcollaborationvendorstomeetthemarketneeds.Theabilitytoprovidevisual

collaboration technologies at a lower price will likely leverage their use in providing

healthcareservices,

as

more

facilities

will

be

able

to

afford

them,

and

thus

be

more

inclined

tousethem.

About LifeSize

LifeSize is the first company todevelopanddeliverhighdefinition video communications

products. Founded in 2003 by industry veterans and headquartered in Austin, Texas,

LifeSizesawardwinningsolutionscombinesuperiorqualityofexperience,uniqueflexibility

and unmatched price performance to make communicating at a distance as natural and

effectiveasbeinginthesameroom,foranyone,anywhere.

LifeSize became a division of Logitech in December 2009, sharing a vision of everywhere

there

is

voice

there

should

be

video.

The

company

has

subsidiaries

in

Europe

and

Asia

Pacific,

andanetworkofchannelpartnersreachingmorethan80countries.


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Measurementof110(1=lowest;10=highest) AwardCriteria

Price Features EaseofUse ServiceEffectivenessProduct

MatchedtoClientNeeds WeightedRating

RelativeWeight(%) 20% 20% 20% 20% 20% 100%LifeSize 9 9 8 7 6 7.8

Competitor1 6 8 8 7 7 7.2Competitor2 6 8 8 7 7 7.2

Criterion 1: Price Competitiveness

Rising interest inhighdefinitionand immersivevisualcollaboration,aswellas themarket

consolidation, are leading to increased competition among valueadded resellers and

equipmentvendors,fuellingpricingpressure.

Toaddressthistrend,LifeSizeoffersoneofthemostpriceeffectiveproducts,whileatthe

same time providing its clients with the best performanceprice ratio. These attractively

priced solutions offer not only lowest acquisition costs, but also a low total cost of

ownership.LifeSizeproductsstartat$2,499,whichplacesthematabout1/3ofthepriceof

theircompetitorsmostcloselymatchedsolutions.

Criterion 2: FeaturesRisingcompetitioninthevisualcollaborationmarketdrivescompaniestoconstantlyfightfor

new customers by offering innovative features that will better suit their clients needs.

LifeSizeisovercomingthischallengewithprovidingHighDefinitionequipmentthatrequires

lower bandwidth than its competitors products. It is especially important in regions that

face the issues of the needed accessibility and have poorly developed bandwidth

infrastructure.FromaHDcallat1.1MBtoacrystalclear,30framespersecondcallat384KB,

LifeSizedeliversperfectwidebandaudioqualityandfullmotionvideofrom128KBup.

Oneofseveralhindering factorsthatvisualcollaboration inhealthcare isalso facing isthe

adoptionstandardsrelatedto legal,cultural,administrative, financial,andtechnical issues.

Inthe

last

case

the

most

important

is

the

issue

of

interoperability

between

other

collaboration systems and medical devices like medical scopes, cameras, mobile medical

carts,anddigitalstethoscopes.LifeSizewasabletoovercomethischallengebyallowingfora

seamless interoperability with the Avaya Aura unified communications platform. The

platform is able to reduce costs through process integration and equipment tracking,

increaseefficiencyofclinicalstaff recoupupto4hoursofadministrativetimepernurse,

andincreaserevenuewithcommunicationsenabledadmittanceanddischarge.


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Criterion 3: Ease of Use

TheLifeSize intuitive,colorcodedremotecontrolandonscreenmenuallowsnontechnical

userstousethesystemwithouttheneedforITstafftobeonassistance.Thebenefitofsuch

simple operation of LifeSize tools and its impressive priceperformance is appealing to

healthcareprofessionals.Withaccess tovisualcollaboration thesehealthcareworkerscan

reach out to patients at home and in more remote areas indirectly reducing costs of

hospitalstays

and

continue

their

medical

education

without

the

disruption

of

physically

attendingseminars.

Criterion 4: Service Support

Aswithany technologicalsolution,servicesupport isan importantaspect foranyvendor.

ThecaseisnodifferentforLifeSizeitprovidesexcellentsupporttoitsclientsviahelpdesk,

Global Deployment Program (GPS), remote installation, and extended warranty and

advancedreplacement.Theservicesupportisespeciallycriticalinhealthcareservices,where

timelytroubleshootingcansometimesmeansomeoneslife.Worthfocusingonherearethe

HelpDeskAssuranceServiceprogramandtheGlobalDeploymentProgram.

TheLifeSize

Helpdesk

Assurance

Service

program

provides

core

services

intended

to

provide

organizationswithdirectphoneandvideoaccesstoLifeSizeserviceandsolutionengineers.

LifeSizehasdevelopedanexpertiseintroubleshootinganddiagnosingtheIPandISDNbased

technologies.HelpdeskAssuranceService incombinationwithLifeSizeWarrantyAssurance

serviceprovidesaccesstothelatestsoftware,knowledgebase,softwareemailnotifications

andtheLifeSizeserviceandsupportorganization.

TheLifeSizeGlobalDeploymentProgramisdesignedtoremovethebarriersrelatedtoglobal

implementations including scheduling delays, higher product and installation costs and

excessivecoordinationefforts.Withoutthesebarriers,LifeSize solutionsaredeployed ina

timelyandeffectivemanner,enablingthecustomersimmediatereturnontheirinvestment

andachieving

productivity

benefits.

Criterion 5: Product Matched to Clients Needs

With millions of baby boomers now retiring, technology innovators are designing and

buildinganewmarket for them thatwillallow thoseseniorcitizenstocommunicatewith

healthcareprovidersand their familymembers from theirhomes.Thatcreatesaneed for

remotehealthcare oratleasttheabilitytogotoamedicalcenterthatsupportsthevisual

collaborationbetweenthemandthedoctors.

Becauseofthechallengesfromregulatoryissues,someclientsneedsremainunmet.LifeSize,

like other companies is restricted by countrylevel issues, as each country has different

policies and regulations on implementing visual collaboration in healthcare and other

sectors,and,asmentionedabove,thetechnologicalbarriercontinuestobeamajorobstacle,

asmany regions in theworldhavepoorlydeveloped infrastructure,preventingthem from

takingfulladvantagesofvisualcollaboration.


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ABOUT FROST & SULLIVAN

Based in Mountain View, California, Frost & Sullivan is a global leader in strategic growth

consulting. This white paper is part of Frost & Sullivans ongoing strategic research into the

InformationTechnology industries.Frost&Sullivanregularlypublishesstrategicanalysesofthe

majormarketsforproductsthatencompassstorage,management,andsecurityofdata.Frost&

Sullivan also provides custom growth consulting to a variety of national and international

companies.

Theinformation

presented

in

this

publication

is

based

on

research

and

interviews

conducted

solely by Frost & Sullivan and, therefore, is subject to fluctuation. Frost & Sullivan takes no

responsibility for any incorrect information supplied to us by manufacturers or end users. All

copyrightandotherproprietarynoticesmustberetained.No licensetopublish,communicate,

modify,commercializeoralterthisdocumentisgranted..

Forinformationregardingpermission,write:

Frost&Sullivan

331E.EvelynAve.Suite100

MountainView,CA94041

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