Is Mobile Health Technology profoundly reshaping the MedTech Industry in Europe? Will most equipment and device companies migrate to service providers by 2020?
In this blog, Bart Van den Mooter – CEO at TforG – highlights the market trends and opportunities identified from TforG’s latest research.
Breakthrough innovations in Mobile Technology and Data Communication take a front row position in the MedTech arena. Wearable sensors, mobile devices and remote access to information open up new avenues through which Health Care Access, Cost and Quality can be improved. It also opens up another avenue, namely the outsourcing to third party providers for patient monitoring, data analysis, alerting, clinical decision-support and therapy advice. Independent service providers, established MedTech suppliers and reference medical centers, initiate(d) a range of service concepts to address the growing interest from hospitals and other care providers.
Whereas in the US the “outsourcing” trend is rather clear, the situation in Europe is more complex. Legal barriers, lacking reimbursement modalities, and the nature of the doctor (hospital)-patient relationship stand head-to-head with a growing interest for operating models dealing with the cost of care, understaffing, waiting lists, etc. Different models, public versus private, and smaller medical units versus large reference centers reveal different scenarios and requirements for outsourcing clinical services.
Nonetheless, it is a fact that many MedTech companies have a lively interest in mobile health technology and to develop a position in the fields of outsourcing. It is an open secret that a couple of large suppliers intend to migrate into a service provider model.
3 Components drive the Mobile Health Care wave
The development of mobile health technologies and services is fueled by the increasing scarcity of resources in the hospital sector and by the explosion of chronically ill patients.
There are 3 main components building the “Mobile Health“ wave:
- New technologies allowing mobile monitoring, diagnostics, patient management and “Online accessibility” of information.
- Real time processing of data and decision support algorithms: Complex mobile health applications enable easy to use access to a wide variety of tools. These applications empower both patients and health providers.
- Outsourcing of clinical services: Screening, triaging, diagnosing, and clinical decision support.
The ability to monitor and analyze data remotely has created the option of outsourcing clinical services. Both hospital managers and care providers see several advantages in (some degree of) outsourcing. Today there are different operational outsourcing models.
- Equipment manufacturers, e.g. pacemaker and implantable defibrillator companies, offer monitoring and alert triage to their customers (for their products only).
- Independent service providers offer storage, data processing, notification services, and decision support.
- Large hospitals (reference centers) provide clinical services for other hospitals in the region (e.g. Germany, France, Italy,…).
Chronic diseases are the most costly part of European healthcare systems. More than 50% of medical expenditures are spent on a small number of chronic illnesses. It is not a coincidence that most operational tele-monitoring solutions (excluding the general home health and emergency applications) are situated in this segment.
In order of prevalence:
- Congestive heart disease and hypertension (CRDT, pacemaker, arrhythmia’s, BP)
In the EU around 650.000 to 750.000 cardiology patients are on remote monitoring systems. For 55.000 to 60.000 of them the service is outsourced.
- Diabetes (BP, glucose)
In Europe there are over 300.000 patients using tele-monitoring follow-up systems, of which most are connected to dedicated service providers.
- COPD and Asthma patients (SpO2, air quality)
In the EU between 130.000 and 160.000 COPD patients carry a mobile monitoring system.
Other high opportunity segments are oncology patients, stroke patients, elderly and Alzheimer patients, etc.
TforG estimates the European market for tele-monitoring sensors and devices for chronically ill patients to be around 800 to 950 million Euros in 2015, with an annual growth of 4 to 6 % for the coming 2 years. The outsourcing of clinical services in Europe represents 55 to 70 million Euros in 2015.
The growth will be moderate for at least a number of years whilst dealing with existing barriers, and in order to finalize the reengineering of the existing national healthcare systems.
In line with the obvious market trends, many newcomers join together to enter the tele-health market.
Large established MedTech companies not only move towards, but simply intend to, migrate from hardware manufacturers into ‘clinical service providers’.
The recent moves of companies such as Philips, St Jude, Medtronic, Welch Allyn and others illustrate the urgency of the strategic repositioning wave.
The mega trends which rush through todays’ healthcare landscape might turn technology into a ‘commodity’, in order to provide a favorable portfolio of clinical services, offering the real answer to the healthcare challenges of today.
The full whitepaper article (pdf) can be downloaded for more details about TforG’s Mobile Health Market Research.
Also read our series of blogs on eHealth in China. The Chinese central government recently publishing “The Telemedicine Opinions”; a set of visionary notices identifies Telemedicine as “essential” to China’s healthcare system and sets a framework for its implementation, mainly aiming to stimulate private initiatives in this field.
About Bart Van den Mooter
Bart is the founder of TforG and works closely together with over 50 global companies such as Abbott, Baxter, GE, J&J, Medtronic, Philips, Stryker and Covidien. In this function, he spends a lot time with Key Opinion Leaders and Health Policy makers in Europe and in Emerging Markets. He graduated at the Polytechnic University of Leuven with a Master of Engineering and has an MBA (Flanders Business School).