Medical Devices and Healthcare IT

Technology Trends and Market Projections for the Fast-Growing Digital Health Market

06 September 2013

Electronics360 Editorial Director Bruce Rayner talked with Shane Walker, Associate Director of Medical Devices & Healthcare IT with IHS Electronics & Media, about developments in the emerging field of digital health. Digital health is major driver of innovation for IHS’ forecast of $35 billion in revenue for the wearable electronics markets by 2016. Below is a transcript of the 11-minute video interview with Walker.

Electronics360 is hosting a free Digital Health webinar on October 29 that includes a presentation by Walker detailing the market outlook for digital health. The registration link will be posted on the Electronics360 home page in a few weeks so please check back to register.

Electronics 360: Digital health it’s a big topic, can you talk about some of the major trends, the big picture issues that we’re seeing in digital health today?

Shane Walker: I would say the biggest trend would be the development of body area networks. So the idea that you have sensors and wireless technology that you wear on a regular basis and they transmit your physiological data to a local area network and then ultimately to the cloud so that it can be accessed by potentially by a physician.

That gets us into the idea of big data: what do we do with all this data once it’s in the cloud? So you have to have intelligent platforms in place to manage the data and be able to pick out the interesting points; the abnormalities if you will, and have that information relayed to the clinician or the physician so that they can get in touch with you and make suggestions on how to improve your health.

Electronics 360: When will that be coming out?

Shane Walker: Well, it’s started today. Consumers going out and actually buying the monitors that they wear on a regular basis either to manage a chronic condition or just for something like sports and fitness monitoring to see how far they’re going, how fast they’re going, how many calories they’re burning. So everything from fitness monitors to blood pressure monitoring and continuous glucose monitoring, things like that are under development right now and in the market available today.

Electronics 360: Sports, the consumer market for performance measurement tools is a pretty active business.

Shane Walker: It definitely is. It’s definitely established and growing and there’s a lot of technological innovation going on still today even though heart rate monitoring has been around for thirty years for sports and fitness purposes. So there’s going to be demand growth from the consumer side for things like sports and fitness monitoring as well as on the health and medical side.

There’s wireless technology built into these sensors that can feed to your local network and like we said before ultimately to the cloud so that other people can make use of the data, not just yourself. So how long is this going to take? It’s beginning now and within just a few years we expect it to grow considerably. The market for wearables for instance, over the next three to four years we see that potentially reaching $35 billion.

Electronics 360: $35 billion in three to four years?

Shane Walker: Right, so that includes military, infotainment, things like Google Glass, smart watches, these will be the sports and fitness monitors, all these things together falling under the wearables category is potentially $35 billion in a few years.

Electronics 360: Does that include hardware, software and the big-data, cloud computing services?

Shane Walker: That includes some services. So things like telehealth. So you’re wearables that would feed into a telehealth hub or a residential gateway if you will.

Electronics 360: Who are some of the big players in the market right now?

Shane Walker: Oh well, there are several. You have Intel and General Electric involved with care innovations. Qualcomm’s involved with its 2net platform. There’s the Continua Health Alliance (CHA) that’s done a lot they’ve got over 200 member companies now involved in developing standards and creating interoperability to really push telehealth forward. I would say a lot of the growth is due to the CHA and also here in the U.S. to the Department of Veterans Affairs (VA). They’re one of the biggest proponents of telehealth right now.

Electronics 360: Are there any roadblocks or challenges limiting that growth; anything that could not derail it, but slow it down?

Shane Walker: Well, it’s actually been slowed by a couple of big challenges. Within the hospital setting you have to get a consensus amongst a large group of people. So from the board of directors all the way down to the clinicians who are actually going to be doing the daily work, the daily monitoring that can be time consuming. That’s one deterrent.

Another deterrent is proving the return on investment (ROI). It’s really difficult to prove what the ROI for a telehealth program is going to be over a 2, 3, 5, 10-year window.

Electronics 360: Also the issue of adopting brand new technology, potentially disruptive technology?

Shane Walker: And patients in different patient populations react differently. There hasn’t been a large-scale, all-inclusive study yet to prove the effectiveness of telehealth. There have been a lot of pilots, a lot of studies and each one has been positive.

The VA for instance has done one of the biggest and most widely publicized studies that found a reduction of hospital readmission by 20 percent by monitoring the patient in home and having that data transmitted through a gateway and interacting with that patient through something as simple as SMS (short message service or text messaging) or as interactive as a video link. So they use different methods for doing this but essentially for the telehealth population they found a 20 percent reduction in readmission and a 25 percent reduction in bed days.

Electronics 360: So the productivity of hospitals is improved as a result of these technologies?

Shane Walker: So keeping patients in their home, it lowers cost tremendously. As a comparison, their patient population outside of the telehealth program was seeing improvement through other things that they were doing but it was more along the lines of 5 percent reduction in readmission. So those are significant data points. But there’s been some argument that it’s hard to take that data and relate it to other hospital systems, other populations, other chronic conditions, things like that.

I think that we’re largely working through those issues now and I think that there’s a general acceptance that telehealth is a benefit. It’s a benefit to the hospital in terms of a cost savings over time. It’s also a benefit to the patient because it keeps them out of the hospital. It keeps them in their home and it improves outcomes over time.

Electronics 360: What about the security of that data transmission. CHA is doing quite a bit of work in that area too, right?

Shane Walker: Definitely, so the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the use of technology are big issues. As far as I know from all the telehealth gateways that are on the market right now there’s no issue with protecting the patient’s information. That’s not really an issue anymore.

Electronics 360: So Shane what are some of the technology drivers behind this whole concept of the full body network? Anything stand out at this point?

Shane Walker: I would say that we’ll see some development with light based heart rate monitoring.

Electronics 360: Light based?

Shane Walker: Light based, right. So we have different methods right now for tracking heart rates so that would be either through a chest strap or through a wrist based monitor but what we’re starting to see from 2 or 3 companies right now is the utilization of light-based heart rate monitoring. So this would be continuous heart rate monitoring from different places on the body, even the wrist. So you wouldn’t have to wear a chest strap anymore. This is very nascent right now but we’re starting to see these entering the market now.

Electronics 360: These products are on the market?

Shane Walker: They’re entering the market now so it works just like pulse oximetry where the light shines into the capillary and bounces back and gives you a read on the heart rate.

Electronics 360: Very accurate.

Shane Walker: Right, but when you’re doing sports and fitness for instance or you’re doing something with a lot of activity, you need an algorithm that’s sophisticated enough to take out the environmental noise so that you do get a good read and it’s not a corrupt read. We’re starting to see more of those enter the market now and I would say that’s something that we’ll see more of.

For instance for sports and fitness monitoring in general over the next five years my forecast is around 250 million units, that’s everything from heart rate monitors down to pedometers. So by 2017 just for sports and fitness monitoring, just for the devices, we’re looking at a two and a half billion dollar industry.

So growing significantly and this ties into the wearable forecast too. So it’s part of that potential $35 billion.

Electronics 360: Where’s the technology going?

Shane Walker: I would say in three years that we’re going to more development in wearables. We will be integrating flexible sensors into clothing. Making sensors more jewelry like and also building the sensor technology into devices that you’re already using today. That can be something like earbuds.

So you have the monitor already built into the earbuds. You’re already using them for music, you’re already using them for a lot of your activities right now.

Electronics 360: It could be a heart rate monitor in the earbuds?

Shane Walker: Exactly. So, I think we’re going to see more of that in the near future.

Electronics 360: So Shane, you’re talking about a $35 billion market size in revenue by 2016?

Shane Walker: Yes, that’s our upside forecast: $35 billion in revenue for the total wearable markets.

Electronics 360: Huge market.

Shane Walker: Yes, huge market with tremendous potential. That would represent a compounded annual growth rate (CAGR) of about 80 percent.

Shane Walker: Right, over the 5 year forecast period. So tremendous opportunity and that’s why you’re hearing a lot of excitement. It’s getting a lot of press right now and that’s for good reason. It’s for all the different things that we’ve addressed today.

So that includes health care and medical applications from a physician’s perspective, from the consumer tracking their own activity, tracking how far they’re running, how far they’re walking, how many calories they’re burning, things like that. There’s military development involved. And in the infotainment industry, Google Glass and smart watches are going to play a role. These all feed into the overall wearables market. There’s limitless opportunity for products to be developed really. This includes integration into clothing and making the devices jewelry like; basically making the sensors ubiquitous.

One key to this growth is that while the technology is there today and is going to grow over time, the key is to make this information meaningful. That’s why the app development and the algorithm developers are so key. You can have a tremendous amount of data but you’re not going to want to go through all these bits of data every day that you’ve been collecting yourself day in and day out. You’re going to want to see trends. You’re going to want a platform that will give you the trends you need and provide meaning behind that data and perhaps make suggestions to you on how you can go about improving your performance or improving your health.

Electronics 360: Another application of big-data analytics.

Shane Walker: Yes, big data falls under that too.

Electronics 360: Thank you for your time Shane.

Shane Walker: Thank you.

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