Medical Device Link.

Originally Published MX November/December 2004

MARKET ANALYSIS

The market for devices designed for nonprofessional caregivers is growing, whether medtech companies are ready or not.

John Collins and Marlene Devine

Healthcare delivery in the residential setting is a logical consequence of today's "perfect storm" confluence of a healthcare system in crisis, an aging demographic, and an emerging obesity epidemic. These factors are chief among those creating a vast and growing market opportunity—home healthcare—in which disruptive technologies and unorthodox business models are likely to thrive and produce tomorrow's medtech megacompanies.

Home is not the hospital. But it increasingly is the site of medical diagnosis and treatment. Medical technology will undoubtedly innovate to meet the challenges of this trend. The question is how medtech companies will learn what innovations are needed.

Background

According to the 1997 National Family Caregiver Survey, 22.4 million U.S. households (23% of all households) were helping care for a spouse, relative, or other person older than age 50.¹ These households are calculated to be delivering approximately $192 billion worth of free (unbilled) healthcare annually. Put another way, that market is nearly double the national sales of medical devices expected for 2004.²

But countering the enormous economic contribution made by lay caregivers is a negative business impact: many of these caregivers perform poorly at their day jobs because of the high level of stress associated with providing off-hours home care. This trend is likely to become even more pronounced. According to a recent American Association of Retired Persons survey, fully 82% of midlife and older Americans intend to keep living in their own homes even when they need help caring for themselves.³

The demographics of a generally aging population are exacerbating the situation and accentuating the need for simple preventive-care solutions. For example, today, about 10 million people age 65 and older live alone. Of this growing group, more than one-third fall each year. Nearly 1.6 million were treated for falls in 2001, and 388,000 were hospitalized with fractures. In that year, the total annual cost of treatment resulting from falls was approximately $32 billion. However, more significant is the fact that most hip-fracture patients who lived independently before the fall will subsequently require assistance from their family or home-care services. According to the Centers for Disease Control and Prevention (Atlanta), 50% of all people who were hospitalized for hip fractures are not able to go back to living independently in their own homes.⁴

Dementia is another growing concern. Today, more than 70% of Alzheimer's disease patients live at home. Each costs about $22,000 per year to sustain, for a total home-care outlay of $100 billion, according to the Alzheimer's Association.⁵

The alarming so-called epidemic of obesity is increasingly being recognized as a national health issue. Poor diet and inactivity contribute to 300,000 deaths annually, and nearly 70% of cardiovascular disease is related to excessive weight. The avoidable medical costs of obesity exceed $50 billion a year—well over 5% of total U.S. healthcare expenditures—and the total economic costs of obesity approach $100 billion a year.⁶

These trends are reflected in soaring national healthcare costs. Healthcare expenditures per person rose 24% in the United States between 2000 and 2003, and are expected to double by 2012. Americans annually spend more than $5000 per capita on healthcare, while other developed countries spend $2000–$3000.⁷

Approximately half of this healthcare spending is for out-of-pocket expenses. The remainder takes the form of insurance premiums and payroll taxes. People 65 and older spend 12% of their personal aftertax income on healthcare, in contrast with the 4% spent by those younger.⁷

Figure 1. Concerns related to the growing trend toward home healthcare. Source: Tiax LLC. (click to enlarge)

The necessary therapeutic response to these national health demographics simply cannot be delivered through the existing overburdened healthcare system. At the same time that the number of practicing nurses is declining, the trend among healthcare providers is toward earlier discharge of patients. Exponentially increasing demand on the current medical infrastructure is creating a crisis that will play out in homes across the country (see Figure 1).

Given the practical realities of the home environment, technology-based healthcare will have to take new approaches defined by both patient convenience and the potential product liability risk of delivery in a residential setting.

An Unready Medtech Industry

PlaceLab, an apartment-scale homelike research space developed by the Massachusetts Institute of Technology and Tiax LLC (both in Cambridge, MA).

To discover the potential for medical device manufacturers to play a role in developing solutions to the enormous home-care challenge, the Massachusetts Medical Device Industry Council (MassMedic; Boston) and Tiax LLC (Cambridge, MA) jointly developed a survey titled "Healthcare in the Home" (see sidebar). The survey was sent via e-mail to 200 MassMedic members, who include suppliers, product developers, research institutes, and academic health centers as well as manufacturers. MassMedic's purpose is to understand and represent the interests of its members, and Tiax is interested in applying its expertise in linked diversity to creating innovative products and technologies to address the problems inherent in home delivery of healthcare.

Linked diversity is a term that requires definition. It refers to the ability to draw on and insightfully integrate deep technical knowledge from a variety of fields. In the case of home healthcare, it's possible that solutions will be developed when thinking based on a thorough understanding of medical devices, home appliances, human factors, and residential systems, among other disciplines, is applied. Not only can diverse perspectives combine to produce new insights, but a proven solution from one industry can often be adapted to achieve success in another.

Most of the survey respondents identified themselves as medical device manufacturers, half of them developing devices being used in residential settings. An overwhelming majority—92% of participants—confirmed that they expect the trend of healthcare in the home to grow significantly in the next five years. Survey respondents attributed the move toward home healthcare to such drivers as rising healthcare costs and the aging population. But despite the size of the opportunity, a stunning 65% of them believe that companies are hesitant to enter the home healthcare market (see Table I).

The survey sought also to characterize some of the biggest challenges perceived to face manufacturers developing medical devices for use in the home. The greatest challenge identified in this regard, after reimbursement, was the lack of information about what patients being treated in the home actually need. Tiax research supports this position.

The needs of both patients and caregivers in a home healthcare setting are not well understood. Many simple questions still await answers. What fundamentally makes the home healthcare setting different from the clinical setting must be determined, for example. Also still uncertain in many cases is how a product designed for medical professionals must be altered for use in a residential setting.

A Home Is Not a Hospital

Medical device developers have focused predominantly on the clinical setting, where the infrastructure supports proper—that is, ideal—use of a device and where safety procedures are in place. This certainly means that, at a minimum, such basic elements as electrical outlets exist and are usefully located, and that no children or pets are in the vicinity of critical care or equipment. Coming to understand how a change in environment affects the use of a device is an important early step for a device manufacturer looking to serve the home-care market.

The clinical setting additionally differs from the home in that the intended device users operating there are trained to some degree. Though the clinical user may not have received thorough training in the use of a particular device, he or she typically possesses some context for effective self-teaching. This isn't usually the case outside the clinical setting.

In fact, many home caregivers are as elderly as the patients for whom they are caring. They may have limited vision, impaired tactility, or hearing loss. Devices intended for their use should be designed to accommodate these deficiencies. A beneficial by-product of such a design consciousness is that addressing the needs of elderly nonprofessional device users would likely improve the clinical user's experience with the product as well.

Unarticulated needs also have to be taken into consideration by device developers. In some situations, neither patient nor caregiver realizes that a solution to a particular problem might or could exist. True, developers don't often ask about the nature of problems being encountered; but even when they do, few caregivers or patients are likely to speak up, primarily because they just don't expect there to be a solution. The reality, however, is that a new technology introduced to address an issue with which caregivers and patients have had difficulty coping is likely to be instantly popular.

A similar experience is familiar from everyday retail commerce: people discover a product they didn't know existed and hadn't felt they needed, yet soon they can't live without it. Until recently, for instance, it would have been unimaginable that a caregiver could monitor whether a family member living elsewhere had taken his or her medication. That technology is likely to exist in the near future, however, alleviating stress for caregivers who will wonder how they managed before.

In some cases, patients and caregivers have developed such efficient ways of working around a problem that the work-arounds have become part of life—so much so that they actually mask the existence of the need. Someone discussing a device with a caregiver may hear the caregiver say that the device is fine and that there are no problems with its use. When actually observing the care being given, however, the person might notice that buttons are taped over to prevent accidental activation, or that wires are labeled with handwritten notes to ensure that proper connections are made.

A lack of information about home-patient needs affects even devices that are already on the market. Product developers have had few resources to help them understand potential problems that may be encountered with their device when it is employed in the home healthcare context. They are often faced with having to address problems that aren't well defined. Medical device manufacturers may know that something is wrong with their product—because of lagging sales or anecdotal information from visiting nurses or supply dealers—but they have no way to determine the nature of the problem for home caregivers.

The Lab That Is a Home

The growing importance of the home as a center for care of the elderly and other nonhospitalized patients offers exciting opportunities for new products, technologies, and ways of designing the home. But there are daunting challenges as well. Consumers will accept only so much technology in their lives. Products and services developed and tested in laboratories often fail in the real world because designers make erroneous assumptions about their effectiveness in such complex natural settings as the home. Focus groups, surveys, and other marketing inquiry methods frequently fall short of anticipating exactly how people will interact with new devices in the home.

Given the uncontrolled complexities inherent in a residential setting, it can often be difficult to assess the nature and degree of the discrepancy between what patients and caregivers report about their device use and how they actually behave. To understand how people actually interact with a product requires that their performance be assessed in an environment more like a residence than a laboratory. It is very difficult, if not impossible, to mimic in a laboratory the conditions prevalent in the environment where the patient lives. For instance, the presence of children and pets, the size of the room, and even the location of electrical outlets in the home affect how a product is used. Add to this the fact that some products are used continuously throughout a 24-hour period, and the challenge grows.

Tiax and the Massachusetts Institute of Technology Department of Architecture House_n Consortium (Cambridge, MA) together have developed PlaceLab, an apartment-scale shared research facility where new technologies and design concepts are tested and evaluated in the context of everyday living. Designed to combine the capabilities of a highly instrumented research lab with the natural environment of a home, PlaceLab allows researchers to study new technologies and design strategies for creating healthier homes and encouraging healthy life-styles. Study areas include active health management, user interface, indoor air quality, energy conservation, diet, disease management, and accident prevention.

An apartment in a residential condominium in Cambridge, MA, PlaceLab is occupied by volunteers who agree to have their activities monitored while they live in the facility. The 1000-sq-ft space has literally miles of wire within its walls and cabinetry that link hundreds of sensors, allowing researchers to study nearly every aspect of life in the home, from human activity to environmental conditions. The facility's ubiquitous data collection opportunities, displays, and audio output can be used in several ways to help identify unmet needs and potential issues with medical device and equipment use, to assess performance in context, and to develop effective training measures.

Conclusion

The common inability of individuals to operate medical devices competently and safely in the home makes the risk of use error high, resulting in substantial potential liability. Many medical technologies currently used in the home environment were not originally intended for use outside of clinical facilities or by other than trained healthcare practitioners. And the training that home caregivers, and patients, do receive is often minimal and inadequate. Compounding the risk introduced by their lack of training is the fact that caregivers are often under a great deal of stress worrying about the patient's health, and can be overwhelmed with information during the patient's transition from the hospital or rehabilitation facility to the home. The patient may be just as stressed and overwhelmed.

These typical emotional strains underscore the present need for medical devices that are designed for a different kind of usability. Even the best technology won't be successful if it hasn't been integrated into the device design in a way that maximizes usability and minimizes risk. Product developers should consider the capabilities and limitations of at-home patients and caregivers, bearing in mind that factors such as age, chronic debilitating conditions, and pain can seriously degrade one's ability to use a product.

Using such approaches as simplifying and minimizing steps, creating intuitive interfaces, and developing comprehensive yet simple training regimes will take developers in the right direction.

References

1. Family Caregiving in the U.S.: Findings from a National Survey (Bethesda, MD, and Washington, DC: National Alliance for Caregiving and American Association of Retired Persons, 1997).
2. S Conroy, "The Medical Device Market: Up, Up, and Away," Medical Device & Diagnostic Industry 26, no. 8 (2004): 72–74.
3. Baby Boomers Envision Their Retirement: An AARP Segmentation Analysis (Washington, DC: American Association of Retired Persons, 1999).
4. JA Stevens and S Olson, "Reducing Falls and Resulting Hip Fractures Among Older Women," Morbidity and Mortality Weekly Report 49, RR02 (March 31, 2000): 1–12; available from Internet: www.cdc.gov/mmwr/preview/mmwrhtml/rr4902a2.htm.
5. RL Ernst and JW Hay, "The U.S. Economic and Social Costs of Alzheimer's Disease Revisited," American Journal of Public Health 84, no. 8 (1994): 1261–1264.
6. MB McClellan, remarks of the U.S. FDA Commissioner at a Tiax/Harvard School of Public Health conference, July 2003.
7. Medical Cost Reference Guide (Chicago: BlueCross BlueShield Association, 2003).

John Collins is executive vice president and Marlene Devine is associate principal of human interface design at Tiax LLC (Cambridge, MA), a collaborative product and technology development firm.

Photo courtesy of TIAX

Copyright ©2004 MX