emerging trends and opportunities in telehealth -- a global scenario

Emerging Trends and Opportunities in Telehealth

A Global Scenario

By Sujith Eramangalath

April 2013

Boston

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© Frost & Sullivan 2013In collaboration with …

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Contents

1. Overview of Telehealth

2. Market Dynamics

3. Market Opportunities

4. Telehealth Matrix

5. Business Models

6. Case Studies


Forces and Factors Shaping Evolution of Healthcare

3

Molecular and

Personalized Medicine

Access, Cost & Quality

of Care

Proficient Use of

InformationProcesses

People

Technology

Leading change to the future of sustainable healthcare


Evolving Phase of Phase of Healthcare Delivery and Management

4

mTrac -Uganda

Weqaya Program –Abu Dhabi

Welldoc-Alere-AT&T Partnership


5

The EU is providing a strong push towards home care to achieve an improvement in Quality of Life, while reducing the Cost of Care

QU

ALI

TY O

F LI

FE

COST OF CARE PER DAY

$1 $10 $100 $1,000 $10,000

IndependentHealthy Living

CommunityClinic

Doctor’sOffice

Chronic DiseaseManagement

HOME CARE

Assisted Living

Nursing Home

INSTITUTIONAL CARE

Specialty Clinic

Community Hospital

ACUTE CARE

ICU

A singleEuropean

informationspace

Inclusion, betterpublic services

& quality oflife

Innovation and

investmentin research

i2010 Initiative

Source: Frost & Sullivan. Adapted from European Commission

Shifting the Model of Care Provision in Europe


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Remote Monitoring

mHealth

GeneralHealthcare IT

Video Telemedi

cine

• Professional Apps

• Wellness Apps• Fitness Apps

• Texting Informational

Services

• Video Diagnostic Consultation• Remote

Doctor/Specialist Services

• Distance Learning/Simulation• Retail Telehealth

• Teleimaging

• Departmental• Electronic Health

Records (EHR)• Health Information

Exchange (HIE)• Patient Portals• Hosted Cloud

Infrastructure

• Home Healthcare and Disease Management Monitoring

• Activity Monitoring• Diabetes Management

• Wellness Programs• Remote Cardiac

Services• PERS

• Medication Management

Connected Health Ecosystem – Market Segmentation


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Mark

et

Dri

vers

Mark

et

Restr

ain

ts

1-2 years 3-5 years 6-10 years

Increasing demand due to increase in chronic illnesses.

Government support in terms of funds to move

towards effective operation of healthcare system

Eurozone crisis leading to drop in healthcare budgets

Increasing hospital expenses, forcing patient’s to switch to affordable remote monitoring options.

Lack of information on funding/ reimbursement practices deter many

potential users from adopting this system

Lack of common European standards making the regulatory environment

unfavorable for growth

Impact: High Medium Low

Telehealth Market: Key Market Drivers and Restraints (Europe), 2012-2020

Source: Frost & Sullivan analysis.

Europe Telehealth Market Dynamics


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United States Telehealth Market Dynamics

Telehealth Industry: Key Market Drivers and Restraints, North America, 2013–2017

Misinformation and overall confusion in the industry restrains growth.

General unknowns facing users concerning licensing, regulatory issues, and privacy slows down the industry.

Difficulty in using telehealth with traditional predominant payment models hinders adoption.

1–2 years 3–4 years 5th year

The continued need for better access to care for patients, remote specialists, and increased workflow efficiencies enable industry growth.

The continued investment by major providers like the VA and OTN* in telehealth promotes acceptance.

Advances in technology allowing greater capabilities

for telehealth encourages growth.

Patients’ increasing interest in investing in their own healthcare drives revenue.

Market

Driv

ers

Market

Restr

ain

ts

Impact: High Medium Low


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Video Telemedicine

11.4%

mHealth17.5%

Home Healthcare

and DiseaseManagement

Monitoring11.0%

Remote Cardiac ECG

22.0%

Medication Management

1.0%

Personal EmergencyResponse Systems65.0%

Activity Monitoring

1.0%

Remote Monitoring

71.1%

Remote Monitoring Vertical, Percent Revenue Breakdown, North America, 2012

Important Segment Characteristics

Factors Assessment

Opportunity Size

($B, 2012)1.74

Opportunity Size

($B, 2017)2.83

Base Year Growth (2012) 13.5%

CAGR Growth Rate

(2012–2017)10.2%

Price Sensitivity 6

Demand for Innovation 8

The largest of the verticals, with both consumer and professional products and

services well represented.

*Not included in breakdown chart are Diabetes Monitoring or Wellness Systems

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

United States Telehealth Market Revenue Opportunities


European Telehealth Market Opportunities

10

0

20

40

60

80

100

120

The United Kingdom

Germany France Italy Spain Scandinavia Benelux

70.2 64.4

42.650

14.7 17.8

34.4

102.6 99.6

62.7 74.5

21.5 25.9

48.3

Regional Market Revenue (2012 and 2015)

2012 2015

The United Kingdom is the largest market for telehealth in Europe, followed by Germany and Italy.

Almost all European telehealth markets are likely to witness high growth, and increase their revenues

by two-folds in another five years. Adoption rates in all the countries are expected to increase rapidly

with growing awareness and public funding. The United Kingdom will continue to dominate the

telehealth market mainly due to early developments in the market and Government support. Other

countries are recently beginning to consider improving their investments into information and

communication technology in the healthcare sector.Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.


Telehealth MatrixTM—Top 20 Telehealth Markets

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Customer

Focus

Professional

Consumer

Industry Focus

Information

Communication

Technologies Healthcare

Traditional Healthcare

and Telemedicine

Consumer/Non-healthcare

Approaching Telehealth

Core Telehealth

Telehealth Industry: Top 20 Telehealth Markets, North America, 2012

HIE

Cloud

Infrastructure

Activity

Monitoring

Patient Portals

Fitness Apps

Retail Telehealth

Wellness

Programs

Texting Services Medication

Management

Tele-

ImagingDistance

Learning/

Simulation

EHR

Professional AppsHome and DM

Monitoring

Remote Cardiac Services

PERS

Video Consultation

Wellness

Apps

Diabetes

Management

Remote Specialist Services

Note: The top five markets are in blue text boxes. Source: Frost & Sullivan analysis.


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Business Model 1

Integration into Health System Structures

Suppliers

CustomersProviders

Payers

Evid

ence

Medical Service

Flow of Money

Service is a logical extension of portfolio

Providers need to network with physicians

hub and spoke model – least threat

PAYMENT One time capital investment by Provider Providers pay a license fee per patient Advantages in license fee concept

IMPLEMENTATION: Cash flow follows well established paths Assuming any services have been approved for re-imbursement Health authorities / Insurance can use existing structures to compensate providers

Example – NHS UK


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The key players involved in driving Telehealth come from different parts of the healthcare ecosystem

Alarm ManufacturersDevice ManufacturersIT Solutions Providers

Social Service ProvidersCall Centre CompaniesClinical Service Providers

TelecomsNetwork Providers

Payers/Health AuthoritiesHospitals

Physician PracticesSystems

Integrators

Regulators

Patient Groups

Service

Provider

Call Centre/

ServiceProviders

Network

Operators

PatientHosting

Social Care

Nurse / Doctor

GP surgeriesIntegration &

Implementation

Management

Monitoring

•Network service

•Potential Point of sale

1st line support

2nd line support

•Handset Manufacturer

•Sensor Manufacturer

Provide hardware

Health Service

could

pay for the

solution

Source: Frost & Sullivan

A complex marketplace: Complex Mix of Public and Private Entities


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Business Model 2

Combining Medical Service Provision and IT Support

Suppliers

CustomersProviders

Payers

Medical Service

Flow of Money

Supplier extends value chain and provides medical services

Also network with Primary Physicians

Specialised services may focus on chronic diseases

PAYMENT Capital investment by Customer Pay as you go model Efficient and reliable service (integrated) can result in

optimised work flow Decreased costs and improved profits

IMPLEMENTATION: Limited success due to patients’ reluctance to accept services Not delivered in the context of conventional healthcare systems and funding Providers may view such offerings as a threat and not co-operate


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Business Model 2 - Example

Bringing it All Together: Leveraging the Reach of Telecoms

Suppliers (Vendor + Telecoms Player)

CustomersPhysicians

Payers / Providers

Medical Service

Flow of Money

Vendor has partnered withdevice/sensor manufacturers. Itpromotes its own mobile devices.Its preferred route to market isthrough telecoms operators/systems integrators such as T-systems, BT etc. Vendor does notapproach hospitals / providersdirectly.

CHALLENGES TO IMPLEMENTING THIS MODEL:

Vendor may be limited to the reach of the Telecoms operators / systems integrators Direct revenues to vendor will be sale of its mobile devices and infrastructure services Revenue gains will only be in high volume cases or in the long run

The solution envisages sensor devices forphysiological monitoring, mobiledevices, infrastructure support, traffichosting by telecoms player on GPRSplatform, call centre support by telecomplayer, clinical support on case by casebasis. Each RPM client is considered aUNIT

Med Call Centres

Vendor


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Selling into Medical Call Centres Equipment Suppliers (Aerotel)

CustomersProviders

Payers

Medical Service

Flow of Money

Call Centres + Telecoms

Equipment Vendor

Aerotel Medical Systems follows abusiness model of selling monitoringdevices to medical call centres. Thesecall centres are business entities inthemselves as they are contracted byNHS or hospitals in the public orprivate system. The call centre mayhave associations with telecomscompanies and clinicians.


Aerotel is limited to the reach of the call centres for volume purposes Aerotel does not interact directly with patients or clinicians Direct revenues to Aerotel will be sale of its mobile monitoring devices and services Revenue gains will only be in high volume cases or in the long run

The solution envisages monitoring deviceswith bluetooth capability byAerotel, traffic hosting through landlineand cellular networks, call centre withbasic clinical support. Telecoms vendorsare involved with call centres


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Business Model 3

Managed Care Approach

Suppliers

CustomersProviders

Payers

Medical Service

Flow of Money

Payers provide health service Taking on Financial Risk during care

Provision Suitable for Disease management

concepts

PAYMENT Efficient and reliable service (integrated) can result in

optimised work flow Decreased costs and improved profits Focused on specific medical risks

IMPLEMENTATION: Legal constraints Opposition by healthcare Providers Focused on costly chronic diseases


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Health Hero Network+

Sananet + Meavita

CustomersLocal Hospitals

Insurance Companies

IPTV Service Offering by Health Hero Network & Sananet in Netherlands

Sananet identifies new and potentialtarget customers for Health HeroNetwork. The company hasdeveloped an IPTV platform in linewith the MOTIVA system from PhilipsMedical. They have tied up with alocal cable service provider calledMeavita that markets this service inthe form of an additional module inthe set top box they sell.


Sananet offers the solution to the cable provider at a license fee for the software and the content Cable provider gets paid by the insurance provider which collects premiums from the patient Sananet anticipates an installed base of 20,000 patients

Health Hero Network develops a vitalsigns monitoring appliance called ‘HealthBuddy’. To enter the European marketthey have entered into marketinglicenses with Sananet in the Netherlands.


Challenging Questions for the Telehealth Market

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• Who will fund services?

• How can consumers be educated to use these services?

• How do we encourage healthcare professionals (hospital personnel,

GPs, and pharmacists) to promote Telehealth usage? What type of

systems of incentives do we need?

• Is there a role for the pharmaceutical industry?

• Should governments continue to drive and lead the adoption of

Telehealth? To what extent? How?


Contact Details

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Britni Myers

Senior Executive

Frost & Sullivan

P: 210.477.8481

E: [email protected]

emerging trends and opportunities in telehealth -- a global scenario

Health & Medicine