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Healthcare’s New Frontier

Frederick McElwee explores how the internet is revolutionizing Healthcare, Telehealth, and the integration of healthcare into the “Internet of Things”

The internet will transform healthcare, with significant economic implications for governments, healthcare payers, and patients. Electronic health records, made possible by computers, have already allowed doctors to more readily have access to patients’ medical histories. Now, technology is making another leap forward; internet-facilitated communication is enabling an expansion of telehealth, and small, internet-enabled devices will have a big impact on data collection and monitoring. But we are at the beginning, not the end, of the healthcare revolution – one which has the potential to improve health outcomes, lower costs, and strengthen the overall economy.

ER, Phone Home
Telehealth, the provision of healthcare remotely by means of telecommunications technology such as the internet, offers a way to decrease the burden of healthcare costs on governments, employers, and other payers. The internet presents new opportunities to expand telehealth and integrate it into a wider internet-enabled healthcare ecosystem with automated and robotic care and monitoring. Zion Market Research expects the global telehealth market to grow almost fivefold between 2016 and 2022. This is driven both by better technologies on the supply side, as well as increased demand due to demographic changes. As aging populations increase demand for nursing care, many traditional in-home nursing services may be automated, so that, in addition to serving as a medium for patient-doctor interaction, internet-connected systems will monitor health conditions, flag causes for concern, and alert emergency services when necessary. For instance, a wearable device that measures heart rates using an ECG device can also check for arrhythmias and alert the patient and his or her doctor if an irregular heartbeat is detected. This is especially relevant in rural areas, where healthcare costs are often high and access sparser. Take, for instance, a patient with a mental health condition who finds it difficult to access care because he lives far from the nearest treatment center. Telehealth makes care easier to access, as patients can self-report their condition online and communicate with medical professionals without needing to travel. The internet also promises to improve the quality of care by facilitating better collaboration and coordination between specialists on clinical care teams. More generally, greater adoption of the internet in healthcare presents both a challenge and an opportunity for governments on the hook for caring for aging – and more expensive – populations. The debate over coverage of and reimbursement for telehealth and monitoring systems will likely intensify over coming years, as payers weigh adding more services to their formularies with the potential for lower costs and higher quality care.

Arms Race
Health monitoring in the form of wearables – smartwatches and other devices connected to the internet that can track health metrics – is already making its way into the mainstream. Smartwatches comprise the bulk of the wearables uptake now, but eyewear (e.g. Google Glass), clothing, footwear, accessories and other segments are poised to grow. Familiar products such as these, as well as futuristic products such as a tattoo patch connected to the internet, have the potential to analyze biometrics like heart rate, breathing, activity, temperature, oxygen levels, sleep, menstrual cycles and even sweat. The International Data Corporation expects 125.5 million wearable devices will be shipped this year (a 20.4% increase from 2016) and forecasts that the wearables market will double by 2021. This is attracting capital – Billionaire investor Mark Cuban believes that sensors are the future of the internet, and is investing heavily in this space. Biosensors are positioned to be the next wave (and possible investment opportunity) in this trend.
As the “Internet of things” makes wearables that can track user health metrics feasible, big tech companies are scrambling to own this data goldmine. In addition to fitness-oriented products from Fitbit and Garmin, large-cap tech firms such as Apple, Samsung and Google, have entered this space. The application of these wearables to facilitate and improve personalized medicine are a promising business prospect; however, the bigger opportunity for these firms is the ownership of patient-generated Real-World Data. But, as with telehealth and monitoring, the immense data generated by wearables presents challenges and opportunities.

Solve for Rx
Who will want this data? Academic researchers, of course – but the greatest demand is that of the pharmaceutical and medical device industries looking for data to support their products in regulatory, approval, and coverage decisions. How this data can be used to impact these decisions will affect health care stakeholders. Payers will have to determine which, and how, data are used to make coverage and reimbursement decisions; regulators will have to set standards for which data are acceptable for use in regulatory and approval decisions of drugs and medical devices. Wearables could lead to novel trial designs with biosensor data linked to clinical trials and act as a novel delivery device for treatments – either in the form of medicines (such as insulin for diabetes) or transcutaneous electrical nerve stimulation (for pain management) – with the potential to improve adherence to treatment regimens. Also important to this emerging market of biosensor data are factors influencing the supply side – namely, the quantity and validity of the data. Should internet-connected monitoring systems or health apps be regulated as medical devices by regulatory agencies as pharmaceuticals and medical devices are? Watch for how regulators answer these questions, as the answers may just impact the role of your watch.

Survival of the Fittest
Two additional concerns present themselves regarding the data generated, the first of which surrounds security and privacy. The potential for hacking was evidenced earlier this year by the breach of the National Health Service in March, when patient data was compromised. However, consumer and patient advocates may find that access to this data by law-abiding actors also presents cause for concern – for instance, the ability of insurers to access data when determining their pool and prices, etc. In response, regulatory guardrails may be implemented so that this data falls under regulations similar to those already in existence prohibiting underwriting discrimination based on pre-existing conditions. Payers, both public and private, may be inclined to mandate or incentivize utilization of wearables to reduce moral hazard in their coverage pool resulting from the ability to socialize losses (in this case, to the rest of the insurance pool), while privatizing benefits. In these cases, where costs are externalized, each individual needs to be held accountable to prevent a real-world manifestation of a “tragedy of the commons.” In the case of government-funded schemes, this may require the government to place devices on its citizens – reminiscent of dystopian microchipping. This premise, even if exercised by more innocuous actors, like employers, could present similar misgivings, if healthcare data could impact hiring decisions.
Improving quality and lower costs in one of the biggest sectors of the economy translates into rising productivity for the economy as a whole. This is especially important considering that productivity growth in developed countries has been sluggish for a decade, and by some estimates, healthcare productivity growth has lagged behind the rest of the economy (although healthcare productivity is notoriously difficult to measure because quality improvements are challenging to quantify). Overall, considering the convergence and integration of “Big Data” analytics, medical records from Electronic Health Records and home monitoring, Real-World Data generated by wearables, and improvements in AI, the future of healthcare is promising. The internet has already revolutionized commerce, communication, entertainment, media, etc. In these industries, the internet has changed how we live; in healthcare, it may change how long we live.

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