the future of connected health devices

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Health device makers, to date, have primarily targeted consumers who are either fitness focused or chronically ill. But between these two extremes sits a large, fragmented and often overlooked population who seek better information to effectively manage their health. Our research suggests that successful solution providers will approach this market opportunity as an ecosystem of partners with an integrated solution that extends beyond the device itself. By plugging the information gap for these consumers, solution providers can help fuel healthcare innovation.

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  • 1. 2014 IBM Corporation The future of connected health devices: Liberating the Information Seeker IBM Institute for Business Value: Healthcare, Life Sciences and Electronics

2. 2014 IBM Corporation2 Key Themes and Findings The global healthcare system currently consumes significant resources (measured as a percentage of GDP) by delivering care in a highly inefficient manner. Many of these systemic inefficiencies are caused by the inability to effectively collect and use health care data to provide diagnosis and treatment decision support. Addressing the underlying information problems will help improve the diagnosis- treatment cycle. Medical device, life sciences, consumer technology organizations and others with device offerings that target patient and consumer needs will unlock significant opportunities. Current health device consumers tend to be those who are fitness focused, actively monitoring a chronic condition, or recovering from an illness. We expect device demand to increase from currently underserved markets in the near future, especially as wealth increases in the developing world and the median age increases. Recent advances in mobile internet, social networking, and sensor technologies could be leveraged to address these needs. The adoption rate of these technologies has reached high levels because they have been deployed as part of well-planned, evolving ecosystems. However, the healthcare device industry is dominated today by products that provide tightly bounded, point solutions to address specific conditions, treatments, or fitness needs. Improving ease of use and other factors that encourage use of devices that are connected, would likely lead to improved adoption rates. Executive Summary 3. 2014 IBM Corporation3 Evidence is mounting that the global healthcare system is increasingly challenged by entrenched inefficiencies Healthcare is the largest contributor to system of systems inefficiency, wasting over 2 trillion USD per year1 Economists estimate that the current level of healthcare inefficiency could be reduced by nearly 35% The integration between the various systems extends and amplifies the impact of idiosyncratic inefficiencies These inefficiencies were attributed to several factors, including the ineffective gathering, sharing, and use of information "The problem lies not in technology, but in a lack of common objectives and an incomplete understanding of the importance of efficiencies in the planets system, a united long-term view and a system for global optimization. Economist, Asia Pacific Sources: IBM Institute for Business Value The worlds 4 trillion dollar challenge, January 2010 1) IBM Institute for Business Value analysis based on 2009 survey of 518 economists. Efficiency Analysis of the System-of-systems Size of the bubble indicates absolute value of the system (USD Billion) 15% 20% 25% 30% 35% 15% 20% 25% 30% 35% 40% 45% System inefficiency as % of total economic value by system Improvementpotentialas%ofsysteminefficiency Education Government & Safety Financial Transportation (Goods & passengers) Building & Transport Infrastructure Electricity Food & Water Communication Leisure/Recreation/Clothing Healthcare $4,270B Background 4. 2014 IBM Corporation4 But with healthcare shifting to consumer-directed models, consumers may be encouraged to better manage their health and help contain rising costs Patients turn to doctors to educate them about their condition Patients educate themselves about health maintenance practices Patients rely on doctors referrals about hospitals and products Patients educate themselves about past performance, ratings and costs of doctors, hospitals, products Patients seek medical care to fix their health problems Patients change their behavior to better manage their health Patients do not see their own medical records, as they are stored at each providers office Patients access medical records and information, available online across all providers Providers are paid fee for service under employer-provided insurance 1 Patients pay a higher share of the total cost of care with higher deductibles and other consumer directed elements Expected Benefits From To 1. Payment models differ by country but there are four basic models. http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/countries/models.html Patient health improves through prevention and care Reduces costs and premiums by becoming more efficient Providers improve quality and safety of clinical practice and improve efficiencies Reduces the financial burden on employers providing health insurance to employees Background 5. 2014 IBM Corporation5 Technological advances are also enabling smart new connected personal healthcare systems that can supply some of the crucial information needs Sources: IBM Institute for Business Value Analysis; IBM Smarter Planet Healthcare, Electronics, Life Sciences Background Smarter health systems automatically capture information to proactively manage and deliver preventive and therapeutic care Sensors that recognize physical changes such as pressure, motion, or temperature are embedded in portable devices and health / fitness equipment Smarter health systems remove information barriers and seamlessly integrate data and analytical insights into healthcare processes to enable smarter decisions and comprehensive, coordinated healthcare Mobile and home-based devices monitor vital signs and activities in real time and communicate with personal health record services, PCs and smartphones, caregivers and healthcare professionals Smarter health systems continually analyze information from multiple devices and other sources to derive insights and recommendations for the individuals health regimes Analytics programs monitor device data and use rules and logic to compare against targets, track progress against goals, and send alerts when needed 6. 2014 IBM Corporation6 For health devices to be more widely successful, they must address the needs of consumers outside their typical focus Sources: IBM Institute for Business Value Analysis The current state of health devices Fitness focused, highly health conscious Aware of the benefits from monitoring certain diseases or disorders that are not terminally life threateningz Terminally/chronically ill need constant monitoring 7. 2014 IBM Corporation7 Information seekers are a significant population that require device offerings targeted at gaps in information for both patient and doctor The current state of health devices Note: Bubble size is illustrative and not to scale. The conditions included in this figure as examples represent only a subset of the overall size of the segment. Enable real-time monitoring, augmenting less frequent visits to the doctor Be a low cost device that is simple to use Seamlessly connect enabled devices to the internet to up/download monitoring data to make monitoring data available to care providers Measure conditions that both doctors and patients are hungry for information about A health device for Information seekers should : 8. 2014 IBM Corporation8 While many currently available devices lack connectivity and other important features, certain health devices are bellwethers of progress Apple and Nike Combines running and music for the fitness market. Smartphone applications collect data from sensors in fitness equipment, enabling users to monitor their performance Source: Business model innovation for medical device Manufacturers, Bruce Anderson, General Manager, IBM Sales and Distribution, Feb. 2009 Motivated Healthy Information seekers Chronically Monitored Fitbit Monitors activity with motion and provides online data storage and analytical tools. Does not provide ability share data outside of its walled garden CareLink by Medtronic Allows for glucose level monitoring and analysis. Data can be exported and easily shared between patients and their medical practitioners The current state of health devices 9. 2014 IBM Corporation9 Components of this emerging ecosystem have already appeared, but need to be better integrated An emerging ecosystem for connected health devices Web Resources Websites that deliver content such as medical condition descriptions and nutritional details. Includes the variety of interactive tools and data sharing services now available. May be free or subscription based Mobile Devices Applications that provide monitoring capability when the user is away from home. Should include the ability to store and share collected data with PCs and other elements of the ecosystem Electronic and personal health records Electronic health records that are shared among different healthcare organizations. May include a patients entire medical history, test results, and current prescriptions. Web-based personal health records that consumers maintain and selectively shareHome-based Devices Solutions that monitor condition status at home, outside of a clinical setting. May include the features required for data sharing with PCs and other elements of the ecosystem 10. 2014 IBM Corporation10 A wide spectrum of mobile health care devices and applications continue to enter the market Jitterbug Bigger buttons and fonts than standard mobile phones. One-touch function that connects immediately to a clinician Bayer DIDGET Plug-in for Nintendo DS gaming system for children with diabetes. Makes health monitoring fun OsiriX Interactive visualization program for display and analysis of medical images (e.g., ultrasound, CT scanner, MRI, PET) Smartphone Applications Health and fitness applications specifically designed to cater to individual health needs of wide range of users. Applications range in price and features Healthcare, medical and lifestyle related applications contributed to 10% (1.09 Billion) of 10 billion apps downloaded from iTunes Electr onic Health Recor ds Mobile Devices Home- based Devices Web Resour ces Patient S