Originally Published MD&DI September 2009
TECHNOLOGY
Professional and Consumer Healthcare Technologies Converge
It is important to know how to design for and market products that move from the doctor’s office into the consumer realm.
Charlie Whelan
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The Motiva, a communication plat-
form for patients and care providers, helps patients manage their lifestyle habits, nutrition, and self-care. |
In many cases, the catalyst for this change has been new technologies that have taken advances made in the realm of professional medical products—i.e., those used by doctors, nurses, and other clinicians—and modified them for use by patients in a consumer environment. Consumers have always had access to medical devices to meet their basic needs, such as first aid kits or thermometers. But in recent years, highly advanced technologies have been increasingly rolled out to consumers themselves.
Some of the best examples of this convergence between professional and consumer devices are automated external defibrillators (AEDs), blood glucose monitors, insulin pumps, home diagnostic kits, and remote patient monitoring systems. Medical technology will follow a path similar to that of computers. Large, complex scientific instruments will ultimately become small, powerful consumer appliances for communication and entertainment. This convergence zone represents one of the greatest opportunities to manufacturers in the medical technology and consumer health markets today.
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Figure 1. (click to enlarge) The medical technology spectrum. Convergence is causing more high-tech professional devices to be available in forms accessible to consumers.
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A major theme driving convergence of professional and consumer medical technology is the rise in healthcare consumerism in the United States. The term refers to a recent market phenomenon that describes how the healthcare system has begun to mimic and converge with the markets for other traditional consumer products. The term is somewhat broad but is largely driven by a shift of decision-making and purchasing power from entities in the healthcare system itself and more toward the patient. This shift has a number of underlying components, all of which are giving consumers more control and responsibility over their healthcare than in the past:
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Table I. (click to enlarge) Differences between the professional and consumer medical technology markets.
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• Shift in demographics. Population composition, attitudes, affluence, education, disease states, etc.
• Shift in technology. Small, wireless, Internet-enabled, information-gathering technologies creating new opportunities to extend the reach of care.
• Shift in care settings. Hospital based to nonhospital to home; inpatient to outpatient.
• Shift in caregivers. Using technology to move care to less-skilled caregivers and the consumers themselves; healthcare practitioners to patients, family, or nonprofessionals; patients more informed on disease states and treatment options thanks to the Internet.
• Shift in care practices. More scientific, data-driven, preventive, technology-intense form of medicine than in the past; physicians more collaborative with patients; greater fragmentation across healthcare system, and more defensive medicine.
• Shift in payment for care. More available technologies, but less willingness for insurers to pay leaves patients to pick up more costs associated with their own care, if they see value.
Major Opportunity Areas of Convergence
Diagnostics. Manufacturers and clinicians recognize diagnostic technologies as a field with some of the greatest opportunity for the consumer market. Blood glucose monitoring evolved into a $4 billion market in the United States in the span of a few decades by only tracking a single diagnostic indicator for a single patient population.
Innovative companies see significant opportunity in developing similar markets around new diagnostic paradigms, especially for patients with chronic conditions. Compared with therapeutic devices, diagnostic technology is often simpler to develop and easier to get approved by FDA. In addition, many manufacturers believe that it is easier to educate consumers in the use of diagnostic devices compared with therapeutic devices.
In 2008, Welch Allyn, a leading company in medical technology used in front line care provided by primary care providers. It was launched a subsidiary company named Blue Highway that is focused exclusively on innovation. Most of the development in the organization is focused on healthcare, and within that, the company has decided to focus on technologies related to screening, diagnostics, and prevention during its first year in existence. As such, consumer-level medical technology is clearly an area of interest by Blue Highway, according to Al Di Rienzo, president and CEO.
Like others in the medical technology market, Di Rienzo sees a major trend toward convergence between professional and consumer products. A major focus of Blue Highway is on preventive medicine. The organization is pursuing technologies—whether used in an acute care, physician’s office, home, or other setting—that can anticipate a catastrophic event, such as an abdominal aortic aneurysm, heart attack, or respiratory failure, before it occurs.
Di Rienzo reports that Welch Allyn has a chip technology that can identify the type of respiratory infection in less than 10 minutes. Using a patient’s saliva, the physician could determine right in the physician’s office whether a patient has influenza A, influenza B, mononucleosis, or a strep infection. All four conditions present themselves in similar ways, and the test would give physicians and patients important information about which course of treatment to take. Similar technology is likely to become more common in the future in both physician’s offices and the home.
Billions of dollars worth of home diagnostic kits are already sold every year for infertility, hepatitis, HIV, drugs of abuse, fecal occult testing, high cholesterol, and other applications. While most kits currently require that patients mail their sample to a testing facility, future technologies will likely provide more immediate results. The market potential for such products is profound, especially when combined with genetic profiling and personalized medicine. But it raises a host of ethical, regulatory, clinical, technical, and reimbursement questions.
Remote Patient Monitoring (RPM). RPM is a branch of telemedicine that focuses on providing home healthcare to patients with chronic diseases. With the use of technology, patients can play a more central role in managing their conditions. RPM provides a remote interface that collects and transmits regular patient monitoring data between a home-based patient and the remotely located care provider.
RPM technology offers a strong value proposition for patients, providers, and physicians. It holds the potential to deliver improved quality of care to patients, to reduce costs associated with avoidable emergency room (ER) visits, and to help manage a host of chronic diseases by providing timely intervention and care.
The market for RPM is in its infancy. Currently, there are 8–12 established players in the market. However, there are at least 35–40 new entrants with innovative technologies under development. By 2010, total revenues for the remote patient monitoring devices market are forecasted to reach $260 million at the compound annual growth rate (CAGR) of 25% from 2004 to 2010.1,2
In 2006, Philips launched the Motiva system, a TV-based platform for remote patient management. The system does vital signs monitoring and also serves as a communication platform between patients and care providers to help patients manage their lifestyle habits, nutrition, and self-care. Paul Bromberg is senior vice president and general manager of the Senior Living Solutions group at Philips Healthcare, which is focused on improving the health and wellness of residents of senior living communities and assisted living facilities. Motiva is currently being tested in a number of focused pilot programs. The major challenge facing the Motiva, and remote monitoring in general, is finding payors willing to reimburse for the technology and related services. The same challenge could be expected for other types of revolutionary medical technologies that can enable patients to care for themselves.
Tests and Treatments for Chronic Conditions. Patients with chronic diseases and conditions are the top targets for most companies moving into the convergence zone between professional and consumer medical devices, and for good reason. According to the organization Partnership for Solutions, in 2000, more than 125 million Americans had chronic health conditions, such as cardiovascular disease, diabetes, asthma, and Parkinson’s disease, and the care of these patients generated direct costs of $510 billion. This number is expected to grow to 157 million people by 2020 with $1.07 trillion in direct costs.3 Approximately 80% of all healthcare spending will be on this population.
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“Caring for individuals with chronic health conditions will be the public health challenge of the 21st Century,” according to Gerard Anderson, PhD, at the Johns Hopkins Bloomberg School of Public Health. Much of the increase in these costs is due to advances in medical practices and technology which often turn an acute condition into a chronic one. For example, since 1980 there has been a greater than 40% drop in mortality from coronary heart disease since, but more people are living with deleterious effects of these acute events. The same is true for patients surviving cancer, stroke, premature birth, renal failure, trauma, and other conditions.
A chronic disease is defined by the fact that a patient lives with it for a long time; therefore, the management of the disease requires more involvement by patients and their families, including the evaluation and use of medical products related to their care. Because patients with chronic conditions are likely to rely on their medical devices for a long time and entrust them with their health, patients hold the potential to develop a strong relationship with the manufacturers of the devices they use. For example, users of insulin pumps are noted for their strong brand loyalty to particular pump manufacturers because these companies are renown for their attentive and personalized service that includes patient education, insurance processing, and product delivery. Medical device companies that already serve patient populations suffering from chronic conditions should recognize that the number of these patients is on the rise and that their long-term needs for medical technology will provide an ideal opportunity for building consumer relationships.
Products Focused on Wellness, Nutrition, and Weight Loss. With almost two-thirds of American adults now overweight and obesity classified by the American Heart Association as the second-leading cause of death, the healthcare community, government entities, industry, and consumers themselves are increasingly interested in new technologies related to weight loss and nutrition. A number of medical technology companies have pointed with admiration to the recent launch of the Nike + iPod Sport Kit, which uses a sensor implanted in a Nike running shoe. The sensor captures and transmits information on the wearer’s progress to his or her iPod. The system is designed to motivate runners during exercise and to track their performance. Medical technology manufacturers believe similar sensor and data feedback solutions could be used to motivate consumers to adopt other healthy behaviors as well. For example, sensors that could capture metabolic information on calories and fat consumed by an individual and calories burned could give a person real-time information on how they are tracking toward a diet.
The United States healthcare system does not place as strong an emphasis on preventive medicine as other Western countries. However, many manufacturers are counting on a slow evolution toward a healthcare model that is focused more on maintaining wellness and managing chronic conditions as opposed to a more reactive approach focused on acute interventions. David Lawson, the associate director of global healthcare at Proctor & Gamble, envisions a wellness monitoring device akin to the warning lights on a car dashboard, which are early indicators of the vehicle’s general functional status.
Such a device would help patients to quantitatively know how well they are and their current predisposition toward future illnesses, as opposed to most consumer devices that already presume an existing health condition. Lawson sees significant opportunity in technologies that would give consumers information to know definitively how well they are from one day to the next, and what steps to take to avoid illness and track their progress toward health goals.
Technologies and Services to Improve Adherence and Compliance. For some of the most serious health conditions, such as diabetes, high cholesterol, and hypertension, about half of adult patients stop taking their medications after 18 months. Poor adherence is estimated to cause approximately 125,000 deaths annually and account for 10–25% of hospital and nursing home admissions in the United States.
Depending on the technology, nonadherence for medical devices used by consumers can be just as much a problem as with medication. As an example, one would anticipate that the aging population would be a boon to the hearing aid market, but the number of actual new customers for the devices has remained fairly flat for years despite significant advances in the size and functionality of the instruments. Many people who could expect significant benefits from hearing aids refuse to use them because they make them “feel old” despite the fact that new designs can be hidden nearly entirely in the ear canal.Bromberg also sees significant potential for technologies that help improve patient adherence to their care programs. Philips Lifeline offers a telephone-based subscription service that prompts patients to take their medications, eat properly, exercise, and keep important appointments. Philips also sells a product called MD2, which is a monitored, automated pill dispenser. These products are among many in the growing market for consumer adherence technologies and services. Bromberg notes that although these types of adherence devices are currently focused on changing very specific patient behaviors, over time he expects similar technologies in the consumer medical device sector to expand beyond simply the patient to change the complete healthcare value chain.
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In addition, while many insurers remain hesitant to reimburse for products whose benefits they deem to be unnecessary, patients may disagree and wish to assume financial responsibility for the products because they see value in them. The benefits of these products most commonly fall in the areas of improved aesthetics, decreased pain, more favorable designs, greater freedom for the patient, or other factors that are more subjective and indirectly related to treating the underlying condition.
Tapping the Consumer Medical Technology Sector
Develop a Deep Understanding of Patient and Clinician Needs Across the Continuum of Care. Due to the intimate nature of ostomy management and the fact that customers are often customers for life, ConvaTec works extremely closely with its customers in developing new products. In addition to regularly gathering feedback from advocacy groups, the company also conducts one-on-one interviews, focus groups, and surveys with customers and the healthcare professionals who care for them.
Marcus Schabacker, senior vice president and chief scientific officer at ConvaTec, notes that the research approach it takes with consumers is less scientific and technical than with physicians and is focused on understanding what the patient needs to feel as normal as possible. While clinicians are typically interested in clinical and technical data, ostomy patients generally have more practical concerns. “The patient is asking themselves, ‘If I put this device on, am I going to have a leak? How often do I need to change this? Is it going to hurt? Can somebody smell it? Can somebody see it?’ This is a totally different perspective that the surgeon is probably not even aware is a problem for the patient,” Schabacker states.
Focus on a Clear Unmet Need with a Simple-to-Use Solution. Freedom Meditech is a development-stage medical device company working to develop a noninvasive ocular glucose measurement device that would free diabetics from the need for current finger-prick testing. The product is designed to operate like a pair of binoculars that shine light on the eyes and displays a glucose reading. Craig Misrach, president and CEO, states that the motivation for developing the technology was rooted in the fact that diabetics do not like the pain and inconvenience associated with finger-prick testing. This causes the vast majority of diabetics to avoid testing their blood sugar as regularly as they should contributing to associated complications. Misrach also describes the device as a potential future platform for measuring other analytes and for detecting and monitoring other diseases of the body that manifest throughout the eye.
Misrach notes that the current design of the device does not have the same disposable revenue streams that conventional blood glucose meters do with strips. To make up for that loss, the company has been considering other business models in which a user might connect the device to the Internet pay a fee to recharge the device for a period of time or number of uses. Misrach notes that while the idea of adopting an iTunes-style strategy is appealing, challenges exist related to data privacy and reimbursement. “The Internet is absolutely important to try to create ease of use for the consumer. We think there is a lot of opportunity in data management and the Internet with healthcare,” Misrach states.
“At Freedom Meditech we are interested in hearing about behavioral characteristics of the consumer that the consumer may not recognize themselves. Many times you will hear consumers say, ‘I will use that or I will do that,’ but then when push comes to shove, they won’t do what they said they would do, because they are behaviorally disposed to doing something else,” Misrach states.
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Misrach affirms that simplicity is often the key to getting patients to adopt new devices because it promotes use by the patient. “As more bells and whistles are added to technologies, they sometimes become more advanced than what the market is ready for. Manufacturers should focus on exactly what will increase use by the individual, especially for screening and diagnostic devices. That is integral to continue health maintenance.”
Exploit Synergies and Copromotion Opportunities. Being one of the world’s largest consumer goods conglomerates, Proctor & Gamble has significant opportunities for product synergy and copromotion in consumer medical devices. Lawson notes as an example that the company might launch a home cholesterol test that prompts people to take the company’s Metamucil fiber supplement to reduce their cholesterol levels. He notes that opportunities targeting weight loss and improving adherence and compliance with consumers are also of great interest. “Everyone has a bathroom scale in their homes, but we are all still obese. So, will people really do anything about their health conditions with the extra information they are getting from these devices?”
Enter Joint Partnerships with Complementary Companies. In 2007, Proctor & Gamble and Inverness Medical Innovations jointly formed a company called SPD Swiss Precision Diagnostics to develop, manufacture, and market rapid at-home diagnostic products in fields other than cardiology, diabetes, and oral care. The company is now the leading provider of home pregnancy tests and fertility and ovulation monitoring products in the world. Proctor & Gamble’s acquisition of Gillette in 2005 is also causing the company to look at new product categories in the healthcare space that might have a similar razor-razor blade business model, such as test strips or sensors, to generate consumable revenue streams. Lawson notes that partnerships such as the one between P&G and Inverness are an excellent way for companies to make a quick entry into the market for consumer medical technology.
Bring in Outside Expertise in Product Development Focused on Consumer Medical Technology. Even leading medical device and consumer products companies that dominate their current markets recognize that a move into the convergence zone of professional and consumer medical technology poses new challenges. Chief among these challenges are how they conduct market research and develop new products. Many of these companies have found value in working with outside firms that focus on consumer research, in the case of medical device companies, or on the professional healthcare market, in the case of consumer companies.
Conclusion
Significant market opportunities exist for more advanced medical technologies placed in the hands of consumers. More educated, empowered, and affluent consumers are demanding new approaches to dealing with their health conditions. A growing burden of chronic disease, soaring healthcare costs, and a shortage of clinicians are further driving the shift toward healthcare consumerism. The technology available to address many of these challenges is already well developed, but regulatory and reimbursement barriers stand in the way, as does resistance from the healthcare establishment to adopt new clinical paradigms.
To succeed in this market, manufacturers must have a strong understanding of consumer psychology and a commitment to developing products that provide simple, easy-to-use solutions that address unmet needs. Superior product design must also be coupled with a strong business model for payment, distribution, and regulatory approval.
Few companies currently in the professional medical devices or consumer goods industries possess the complete breadth of knowledge across both sectors to develop and commercialize these converged products. Companies interested in this market should strongly consider partnerships with complementary companies. In addition, engaging with outside consulting and research organizations specializing in new product development in this highly specialized area can prove highly valuable.
Manufacturers can expect a much more competitive consumer marketplace in the future, both within product categories and across product categories. With an ever-widening variety of testing and treatment choices available to consumers, manufacturers not only need to make a case for why their products are better, but also why their particular care pathway is the most beneficial to the patient.
Charlie Whelan is director of consulting, healthcare and lifesciences, for Frost & Sullivan. He can be reached via e-mail at cwhelan@frost.com.
References
1. “Health and Health Care 2010: The Forecast, The Challenge,” (Palo Alto, CA: Institute for the Future, 2003); available from Internet: www.iftf.org.
2. “Analysis of American Hosptial Association Annual Survey Data, 1980–2001 for Community Hospitals,” (Falls Church, VA: Lewin Group).
3. Gerard F Anderson, PhD, “Better Lives for People with Chronic Conditions,” (paper presented at Partnership for Solutions, March 2003).
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