Saturday, March 8, 2008

Market Demand for Connected Medical Monitoring Devices

by Harry Wang, Director of Research, Parks Associates

About 90 million people in the U.S. suffer from one or multiple chronic conditions, with diabetes, cardiovascular diseases, and respiratory conditions having the highest prevalence. These conditions are also the most suitable for medical monitoring devices. Glucose meters and test strips are a multi-billion dollar business in the U.S. (industry data pointing to annual revenue of more than $3 billion). Blood pressure monitors are another widely used monitoring tool for patients with cardiovascular risks. Digital weight scales can serve both conditions, and their popularity is on the rise. Over the last few years, manufacturers of these mass-market medical diagnostic tools have begun to add a USB interface and expand internal memory so that users can download measurement data to their home computers. Software accompanying the devices can help users to perform basic charting and trend analysis on the computer, completing a “Do-It-Yourself” kit.

Less understood and lower-volume home diagnostic devices include cholesterol test tools, pulse oximeters, body fat meters, electrocardiograph (ECG) monitors, and spirometers. An emerging category is focused on using motion and environmental sensors to detect accidental falls, night seizures, urinary incontinence, mindless wandering, and disruptive sleep patterns, conditions that are most detrimental to a senior’s life quality. However, these devices are built on the latest technologies, which means that they are less mature and reliable and usually come with a higher price tag.

The benefits of connecting these devices to a network and transferring health data for remote monitoring and diagnosis are multi-fold. First, the data will be put in the hands of a professional who can make a better judgment of the patient’s conditions. Second, patients with multiple chronic conditions will be examined based on a complete set of information coming from multiple device readings. For instance, an irregular reading of ECG data plus an abnormal weight gain can point to a greater need for clinical intervention versus ECG readings alone. Connectivity helps synchronize data collection so that caregivers can have the right information at hand to make a decision. Third, connectivity makes real-time data collection possible. Fourth, continuous data collection can reveal better patterns than episodic measurements, another means for caregivers to make an informed decision. For example, human blood pressure fluctuates throughout the day. Episodic measuring only gives isolated data and may miss the peak and trough points that deserve physicians’ attention for cardiovascular care. Based on continuous data, physicians can make better recommendations to their patients on the timing and dosage of anti-hypertension drugs and the amount of cardio exercises during the time of the day. Finally, connectivity improves patient compliance. Manually saving and forwarding data can be a hassle for the users of multiple measurement devices. Inconvenience can lead to low compliance, which undermines the benefits of home monitoring. Automating the process and making it portable anywhere the patient goes through connectivity solutions will make patients more willing to cooperate with the monitoring regimen.

Connected medical monitoring devices serve three types of patients well.

  • Seniors with chronic and aging conditions

  • People with one or more chronic conditions

  • People with a strong desire to stay fit and well

These three segments have considerable overlapping portions. The Medicare population, for instance, encompasses all three segments. On the other hand, not all people in these segments are qualified users of the technology. Those with a considerable disability are perhaps better off in the hands of home care aides, living in a nursing home, or being treated at the hospital. Patients with severe dementia symptoms are not a good fit due to their lack of cognitive ability to use the devices properly. Therefore, although the potential market is big, the total addressable market for connected medical monitoring devices is smaller. Parks Associates estimates that between 22 and 25 million people were the appropriate target population of this application in 2007. As demographic trends favor this application and consumer awareness is on the rise, we expect the total addressable market to continue expanding over the next five years, reaching between 44 and 48 million people in 2012.

Medical device makers are thus put in charge of arduous but potentially very rewarding tasks: incorporating the latest technology into traditional medical devices for diagnostic and monitoring purposes, designing the new devices with the ultimate simplicity and utility for consumers, identifying the target population, and effectively marketing the solution. This is a brand new market opportunity with no old trails to follow, and the path to a viable business model is even harder to find. Very likely, device makers will need collaborations from various partners and blessings from key influencers of the healthcare industry, including consumers, to work out the right business models.

Note: The term “connected medical devices” describes medical diagnostic and measurement devices with networking support.

This article was published for the 2008 CONNECTIONS™ Conference Industry Insights, the official publication of CONNECTIONS™.


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