Healthcare unbound: Early wins pave the way for new business
Some of the IT essential to the success of technology in, on, and around the body that frees care from formal institutions is now ready for prime time. VA hospital systems in Connecticut, Florida, Ohio, and the Rocky Mountain region of the Midwest, for example, have deployed the Health Hero Health Buddy home monitoring device to help control costs and improve outcomes for VA patients with chronic -- and expensive -- conditions like CHF, COPD, diabetes, and mental illness. Another example is Partners HealthCare System in Boston, which is giving discharged patients digital cameras to take a picture of their wounds while at home. Patients transmit the digital images via the Internet to enhance discussions between themselves and their homecare nurses.
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These early wins demonstrate the potential -- up to $34 billion in device and service sales by 2015 -- of new businesses and new business models in the healthcare unbound market.
IT's forward march makes healthcare unbound inevitable
Because healthcare unbound stands on the shoulders of broader technology developments and adoption, let's look at the current and future state of the IT that will underpin this major trend toward patients receiving care in the home.
1. Mobile computing
The evolution from awkward desktops to nimble handsets to voice and thought-driven user interfaces is well under way. Foreseeable advances in wireless technology will make healthcare applications available through a host of wearable devices by 2015. Early winners in wearables will be companies with deep R&D resources like IBM, NEC, Fujitsu, and Hewlett-Packard. High-bandwidth mobile data services are gaining critical mass and momentum -- particularly in the enterprise market: By the second half of 2005, multiple forms of high-bandwidth mobile services will be available in the majority of the nation's top 100 metropolitan areas. Greater bandwidth makes data-rich applications like the continuous monitoring and conveyance of patient vital signs practical and more affordable. Similarly, the volume of mobile messages -- with SMS leading the charge -- is poised to explode to 126 billion in the US by 2009. A growing share of those messages will flow between the frail and those who care for them. And don't forget that a picture is worth 100 SMS messages -- at about nine words each -- so the spread of digital cameras, set to reach 63 million households by 2009, will add color and content to the conversation between loved ones, caregivers, and clinicians, making face-to-face visits less necessary.
2. Secure email
HIPAA, like almost all regulatory mandates, has been a boon to technology spending, and securing email is high on the to-do list for provider and payer organizations. In our view, HIPAA is not an end in itself but an enabler of greater sharing of personal health information among cooperating providers, payers, and consumers. Healthcare unbound communications must be secure before consumers will embrace them, and HIPAA will -- eventually -- force sufficient security in email to unleash caregiving out of the range of the spoken word. Another enabler? Email validation, set to take off in 2005, will bring benefits beyond the scope of simply dampening spam. The side benefit for healthcare consumers will be greater confidence in one of the key communication channels between them and their doctors and new businesses delivering care and guidance -- in part via email -- to their homes.
3. Bluetooth and RFID
We're getting geeky now, but these important technologies are maturing fast and are set to spread into the healthcare device and service market as they do. Securing Bluetooth devices -- which are always looking to connect with another device -- becomes a critical enterprise to-do, especially for caregiving organizations where these devices will increasingly be implanted into the body. The best strategy is to include Bluetooth devices in any corporate wireless security strategy rather than focus all attention on IEEE 802.11 wireless LAN devices. And what about RFID-tagged devices and people? These tiny radio transmitters that convey to readers the identity of the things they are attached to are dropping in size and price as healthcare entrepreneurs contemplate where to put them next. As RFID moves into the mainstream of IT integration, top platform veterans, including IBM, Microsoft, Oracle, and Sun, are planning to redefine the RFID middleware market with offerings that support broader RFID deployments.
4. Marketing technology
Marketing practices and technologies are evolving quickly, too. Since the widely reported death of the mass media market (it made the cover of BusinessWeek, so it must be true), marketers must think about influencing smaller segments of consumers through increasingly fragmented, yet addressable and interactive, media. Left Brain Marketing is Forrester's term for a set of principles perfectly suited for organizations interested in reaching the healthcare unbound consumer. Why? Early adopters will be few and funky in their numbers and circumstances, so marketers with the sharpest insights -- and most refined campaigns -- will succeed over the master blasters. First, they will define their target clients intimately with a marketing and product development technique we call Scenario Design, which focuses product and message development on user needs, characteristics, and circumstances over brand and sell-side priorities. To execute these targeted campaigns, marketers will choose an email marketing service provider based on the fit of the vendor's skills with the dynamic requirements of the healthcare consumer.
5. Consumer data
So where will marketers find their customers? There are important differences among people suffering from various diseases that can inform a smart segmentation strategy for finding healthcare unbound prospects. For example, diabetics are less likely than depressives to go online to look for healthcare information. But with broadband adoption among consumers reaching 23.1 million US households in 2004 -- households that earn 27% more and spend 52% more than their dial-up brethren -- marketers have a large and growing pool of hot-wired candidates from which to pull.
The ever-forward march of technology, new marketing practices, and fresh consumer insights will feed the fire of healthcare unbound. These are but a few of the pieces of Forrester research that you can use to build your case or build your product to enter the market for care delivered outside of formal institutions.
We are very interested in your feedback on our research. Do you have topics to recommend, data you would like to have, or technologies you want assessed? Drop me a line at bradholmes@forrester.com so we can connect.
Brad Holmes
VP and Research Director,
Healthcare and Life Sciences
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