IoT: The cure for rising healthcare costs?
The rising costs of healthcare continues to dominate the headlines. In recent years, health insurance premiums have increased at a rate higher than annual income, according to recent reports.
The industry movement from fee-for-service (FFS) model towards value-based care, where outcomes are reimbursed, is being widely adopted as a method to improve quality and health outcomes, along with lowering costs. However, value-based care alone isn’t the answer to reducing the increasing costs of healthcare.
Fortunately, technology can help. Specifically, advancements with the Internet of Things have proven to help offset costs and improve the delivery of care, says Bryan Lubel, president of Integron.
Connected healthcare drives IoT technology and wearable device adoption
Estimates predict that more devices are becoming connected – 30 billion connected “things” by 2020, and connected healthcare devices represent a large portion of that growth. In fact, IDC estimates that the market for remote health monitoring will grow to over $12.4 billion (€10.41 billion) in 2018.
This growth is being fueled by advancements in IoT connectivity technology, as well as adoption of both consumer-grade wearable devices (e.g. fitness trackers, person health devices), and medical-grade wearable biosensors that continuously measure heart rate, respiratory rate, skin temperature, etc.
These medical-grade devices hold promise for the real potential in the market, as they provide solutions that are validated for medical relevance, as well as tested for accuracy, and reliability.
IoT is applicable in a wide range of healthcare applications – remote patient monitoring, equipment diagnostics, medication adherence, and clinical trials – providing improved care at dramatically less cost.
- IoT-enabled clinical trials
The life science industry is accelerating the adoption of mobile devices and IoT technology within clinical trials to simplify the patient experience while collecting increasingly sophisticated endpoint data. Within the clinical trial process, connected healthcare devices make the capture of patient data more efficient and cost-effective, improving the patient experience, resulting in reduced time to bring new research treatments to market.
- Remote patient monitoring
IoT applications and connected medical devices are also playing a major role in remote patient monitoring solutions. IoT connected devices allow physicians and providers to monitor non-critical patients at home, resulting in decreased hospital admissions and a reduction in unnecessary costs.
- Remote equipment diagnostics
The IoT is not just being used to remotely monitor patients. For several years, medical equipment OEMs have been using remote diagnostics technology to monitor and manage the health of expensive medical equipment, including X-ray, CT, MRI, ultrasound, and radiation therapy equipment. These devices are costly to maintain, and remote diagnostics and proactive monitoring can significantly improve downtime costs.
- Clinical operations
IoT technology is also playing a major role in improving the efficiency of clinical operations. Asset tracking solutions, combined with improved data capture are resulting in significant cost savings and optimisations for hospital staff.
Challenges with IoT in healthcare and potential new costs
As illustrated in the examples above, the IoT holds huge potential to reduce costs and improve patient outcomes in healthcare. However, this upside is not without its challenges.
Data privacy and security continues to be an important requirement, but what many companies continue to underestimate are the challenges associated with the underlying IoT infrastructure: connectivity, edge device management, and device interoperability.These challenges are often manifested as additional, hidden and underestimated costs for business embarking on IoT initiatives.
For example, in applications such as remote patient monitoring and clinical trials, adoption of IoT technology can introduce significant costs if not implemented properly. For patients utilising mobile technology and connected medical devices, up to 50% of the costs for implementing IoT technology can be attributed to network communications, including monthly wireless access fees.
If not managed properly, these fees are magnified with monthly data overages. Furthermore, costs associated with ongoing device administration, management, and technical support can escalate as programs reach scale.
IoT in healthcare: Proper infrastructure management critical to delivering cost savings
The complexities associated with implementing IoT technology have led many enterprise organisations to reconsider their support and delivery models. No longer relying on internal IT personnel, recent trends point to companies embracing third party service providers to manage their IoT solutions and associated connectivity infrastructure.
In fact, Markets and Markets estimates that the IoT managed services market will grow to $79.6 billion (€66.83 billion) by 2021. These trends point to healthcare providers and payers utilising outsourced managed services to help managed these costs and complexities, ensuring they can deliver on the promise of IoT in healthcare.
The Internet of Things holds promise in helping both improve the quality of health care and reduce costs, and according to a recent Accenture survey, already delivering tangible cost savings, but not without challenges.
The upside is significant, but healthcare providers and payers must understand the hidden challenges of adopting IoT technology, including the complexities associated deploying edge IoT devices, ensure that they are reliably connected to a company’s cloud infrastructure, and provide ongoing device management, network management, and logistics support.
The author of this blog is Bryan Lubel, president of Integron
About the author
Bryan A. Lubel is president of Integron, an IoT managed services company. He was appointed to this position in January 2008. Mr. Lubel has over 25 years of general management, sales, marketing; product and services marketing channel marketing, operations and systems design experience.