At a time when the cost of healthcare is higher than ever, it’s difficult to imagine rounding up support for expensive new technologies. But that’s exactly what some big name players in the wireless space are hoping to do.
Qualcomm has pushed forward with a variety of e-health initiatives, even after dropping its LifeComm venture. Then there’s the likes of M2M outpatient care companies CardioNet and Toumaz, which specializes in wearable, wirelessly enabled sensors. And don’t forget AT&T, Verizon Wireless and Sprint Nextel, all of which have their own designs on how to cash in on the healthcare segment.
The attraction is obvious: The multi-billion dollar healthcare industry is ripe with cash and presents a huge market opportunity for the wireless industry. Hospitals have become increasingly reliant on wireless communications, and the industry is hoping to make its presence there grow.
The problem, it seems, is figuring out who will pay for it.
Yankee Group analyst Steve Hilton is currently researching how to calculate the return on investment for wireless healthcare technologies. As he sees it, the main problem with wireless healthcare is figuring out who will pay for it.
“Today, the more procedures you do inside a hospital, the more money the hospital gets. What’s the incentive to take services outside of the hospital?” he asks of wireless technology like wearable diagnostics and remote patient monitoring.
That very question came up during a wireless healthcare presentation at Qualcomm’s Smart Services Summit earlier this summer. At that time, the answer was vague. It was argued that the technologies would simply become the new standard of care: have them or open yourself to lawsuits.
While that scenario may come true once adoption of new wireless healthcare technologies reach critical mass, it doesn’t address the issue of how the devices will gain a foothold in the market to begin with.
New technologies in healthcare require not only a device ecosystem but a business ecosystem where doctors, hospitals and insurance companies all agree on how a technology is implemented and who will pay for it.
The wireless industry brings a lot to the table in terms of technological offerings: the ability to remotely monitor patients, transmit critical information and improved quality of care. What it doesn’t bring to the table is a clear return on investment for the hospitals and insurance companies that ultimately end up footing the bill for new, high-tech wireless devices like smart bandaids.
A main draw of wireless healthcare technology is its ability to improve patient monitoring and quality of life. Such applications could possibly generate cost savings and maybe even reduce the number of malpractice suits – but this doesn’t answer the question of who will pay for the technology in the first place.
Stan Schatt with ABI Research says some argue that doctors could spend more time doing high-value services if other types of care could be handled remotely. However, it’s hard to convince hospitals to invest in more expensive, wirelessly embedded devices when the benefits are so intangible.
As a result, Schatt expects the wireless healthcare market to ramp slowly as providers cautiously adopt expensive new technology. The grow Schatt predicts looks more like a slope than a hockey stick.
For all of Hilton’s reservations, he, too, is positive about the future of wireless healthcare – he just doesn’t know if the U.S. system is the best fit for the technology. “I’m not convinced that these solutions will be first realized in the U.S.,” he says. “They have a better chance in Europe, Scandinavia and the U.K.”
Filed Under: Infrastructure