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Forrester Research Forecasts Healthcare Unbound Growth -- Market To Reach $34 Billion By 2015

New Report Defines Impact Of Market Growth On Consumers, Health Plans, Device Manufacturers, And Healthcare Vendors

Cambridge, Mass., July 21, 2004 . . . Healthcare unbound, Forrester Research, Inc.'s (Nasdaq: FORR) term for technologies in, on, and around the body that free care from formal institutions, will deliver new options to consumers who wish to retain their independence as they get older, face chronic illness, and recover from in-patient care. By 2015, Forrester projects that 60 percent of all patients discharged after a lengthy hospitalization, 40 percent of all chronically ill, and 12 percent of all seniors, will adopt healthcare unbound technologies and services.

According to the new Forrester report, "Who Will Pay For Healthcare Unbound," the healthcare unbound market will experience slow but steady growth through 2008, and then surge to $34 billion by 2015, following the entrance of third-party payers, like the Centers for Medicare & Medicaid Services (CMS).

"Healthcare unbound will not be held back by a lack of need, interest, or immature technology. Companies like GE, QUALCOMM, and Roche Diagnostics, for instance, continue to develop devices and monitoring aids that enable consumers to make healthcare unbound a reality," said Forrester Research Senior Analyst Elizabeth W. Boehm. "The tipping point will occur when payers like CMS, Kaiser, United, and Blues plans see the long-term benefit of reimbursing consumers for these expenditures."

Like most healthcare-related expenses, consumers expect third-party payers to foot the bill for healthcare unbound solutions. Forrester surveyed 6,000 consumers to gain a better understanding of their healthcare attitudes. Although 77 percent of consumers say that nursing homes are a last resort for themselves and their family members and more than 50 percent of consumers say that they would like an aging, ill, or disabled family member to wear a health-monitoring device for safety and peace of mind, a majority of consumers expect to pay less than $100 per year — if they're willing to pay at all — for devices and home-monitoring services.

Healthcare Unbound In Action

• Both Intel and Georgia Tech have developed prototypes of home environments equipped with inexpensive RFID tags that interact with sensors worn by occupants. These systems track seniors' daily routines and intervene with messages or reminders, transmitted to the residents' TV, if the seniors deviate too far from the expected routine.
• Device manufacturers like Philips Medical Systems and Medtronic lead the industry in building and gaining FDA approval for devices that monitor patients' health remotely. Medtronic, for instance, built a heart monitor that is implanted in a patient's body but communicates critical information externally.
• Health plans like HealthPartners and Kaiser Permanente are beginning to reimburse members for participation in prevention-oriented health maintenance programs.
• Home health agencies like state-based Visiting Nurses Associations will use healthcare unbound technologies to deploy nurses more efficiently.

Healthcare Unbound Growth

Forrester's forecast predicts adoption of three types of healthcare unbound solutions: activities of daily living (ADL) support and elder monitoring, chronic care maintenance, and acute post-hospitalization care management. Each segment will experience unique growth trends during the following three phases:

The Era Of Self-Pay: 2004-2008
Initial healthcare unbound growth will be fueled by consumers who see a value in paying for healthcare unbound out of pocket, namely affluent chronic illness sufferers and caretakers for sick or aging family members.

The Era Of Validation: 2008-2010
Growth will accelerate as healthcare vendors entice third-party payers with studies that prove valuable long-term cost savings from healthcare unbound investments.

The Era Of Third-Party Payment: 2010 And Beyond
Solid evidence of healthcare unbound's ability to improve healthcare efficiencies will spur third-party reimbursement, sparking rapid adoption of healthcare unbound solutions.

Forrester is an independent technology research company that provides pragmatic and forward-thinking advice about technology's impact on business. Business, marketing, and IT professionals worldwide collaborate with Forrester to align their technology investments with their business goals. Forrester offers products and services in four major areas: Research, Data, Consulting, and Community. In February 2003, Forrester acquired Giga Information Group. Established in 1983, Forrester is headquartered in Cambridge, Mass. For additional information, visit www.forrester.com.

Contact:

Erica Cantwell
Manager, Public Relations
Forrester Research
+1 212/672-1757
ecantwell@forrester.com