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4 years, 8 months ago

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MedTech must digitize to remain relevant

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Since we first published this Commentary just over a year ago it’s received over 10,000 views. We’re republishing it as colleagues have suggested that the digitization of MedTech is more relevant today because of the impact CoVID-19 has had on the industry.

Two Boston Consulting Group studies say MedTech innovation productivity is in decline
A history of strong growth and healthy margins render MedTechs slow to change their outdated business model
The MedTech sector is rapidly shifting from production to solutions
The dynamics of MedTechs' customer supply chain is changing significantly and MedTech manufacturers are no longer in control
Consolidation among buyers - hospitals and group purchasing organisations (GPO) - adds downward pressure on prices
Independent distributors have assumed marketing, customer support and education roles
GPO’s have raised their fees and are struggling to change their model based on aggregate volume
Digitally savvy new entrants are reinventing how healthcare providers and suppliers work together
Amazon’s B2B Health Services is positioned to disrupt MedTechs, GPOs and distributors
MedTech manufacturers need to enhance their digitization strategies to remain relevant

MedTech must digitize to remain relevant

MedTech companies need to accelerate their digital strategies and integrate digital solutions into their principal business plans if they are to maintain and enhance their position in an increasingly solution orientated healthcare ecosystem. With growing focus on healthcare value and outcomes and continued cost pressures, MedTechs need to get the most from their current portfolios to drive profitability. An area where significant improvements might be made in the short term is in MedTechs' customer facing supply chains. To achieve this, manufacturing companies need to make digitization and advanced analytics a central plank of their strategies.

In this Commentary

This Commentary describes the necessity for MedTechs to enhance their digitization strategies, which are increasingly relevant, as MedTech companies shift from production to solution orientated entities. In a previous Commentary we argued that MedTechs history of strong growth and healthy margins make them slow to change and implement digital strategies. Here we suggest that the business model, which served to accelerate MedTechs' financial success over the past decade is becoming less effective and device manufacturers need not only to generate value from the sale of their product offerings, but also from data their devices produce so they can create high quality affordable healthcare solutions. This we argue will require MedTechs developing innovative strategies associated with significantly increasing their use of digital technology to enhance go-to-market activities, strengthen value propositions of products and services and streamline internal processes.

MedTechs operate with an outdated commercial model

Our discussion of digitization draws on two international benchmarking studies undertaken by the Boston Consulting Group (BCG). The first, published in July 2013 and entitled, “F ixing the MedTech Commercial Model: Still Deploying ‘Milkmen’ in a Megastore World” suggests that the high gross margins that MedTech companies enjoy, particularly in the US, hide unsustainable high costs and underdeveloped commercial skills. According to BCG the average MedTech company’s selling, general and administrative (SG&A) expenses - measured as a percentage of the cost of goods sold - is 3.5 times higher than the average comparable technology company. The study concludes that MedTechs' outdated business model, dubbed the “milkman”, will have to change for companies to survive.

BCG’s follow-up 2017 study

In 2017 BCG published a follow-up study entitled, “Moving Beyond the ‘Milkman’ Model in MedTech”, which surveyed some 6,000 employees and benchmarked financial and organizational data from 100 MedTech companies worldwide, including nine of the 10 largest companies in the sector. The study suggested that although there continued to be downward pressure on device prices, changes in buying processes and shrinking gross margins, few MedTech companies “have taken the bold moves required to create a leaner commercial model”.

According to the BCG’s 2017 study, “Overall, innovation productivity [in the MedTech sector] is in decline. In some product categories, low-cost competitors - including those from emerging markets - have grown rapidly and taken market share from established competitors. At the same time, purchasers are becoming more insistent on real-world evidence that premium medical devices create value by improving patient outcomes and reducing the total costs of care”. The growth and spread of value-based healthcare has shifted the basis of competition beyond products, “toward more comprehensive value propositions and solutions that address the entire patient pathway”. In this environment, MedTechs have no choice but to use data to deliver improved outcomes and a better customer experience for patients, healthcare providers and payers.

MedTech distributors increasing their market power and influence

Although supply chain costs tend to be MedTechs' second-highest expense after labour, companies have been reluctant to employ digital strategies to reduce expenses and increase efficiencies. As a consequence, their customer supply chains tend to be labour intensive relationship driven with little effective sharing of data between different territories and sales teams. Customer relations are disaggregated with only modest attention paid to patients and payors and insufficient emphasis on systematically collecting, storing and analysing data to support value outcomes.

As MedTech manufacturers have been slow to develop strong and effective data strategies, so MedTech distributors have increased their bargaining power through M&As and internationalisation. Some distributors have even assumed marketing, customer support and education roles, while others have launched their own brands. MedTechs' response to these changes has been to increase their direct sales representatives. However, consolidation among buyers - hospitals and GPO’s - and the extra downward pressure this puts on prices, is likely to make it increasingly costly for MedTechs to sustain large permanent sales forces.

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Advantages of distributors but no way to accurately measure sales performance

Notwithstanding, the distributor model is still common with MedTechs and has been successful in many markets for a long time. Independent distributors are often used when producers have small product portfolios. In smaller markets, distributors are employed primarily to gain economies of scale as they can combine portfolios of multiple companies to create a critical mass opportunity and obtain better and faster access to markets.

MedTechs have a history of investing in sales force effectiveness (SFE) typically to increase the productivity of sales representatives. Sales leaders have some indication that this pays-off through incremental revenue growth and profits, but they struggle to assess the true performance of such investments not least because SFE includes a broad range of activities and also it is almost impossible to obtain comparative competitor data.

Changing nature of GPOs

GPO’s also have changed. Originally, they were designed in the early 20^th century to bring value to hospitals and healthcare systems by aggregating demand and negotiating lower prices among suppliers. Recently however they have raised their fees, invested in data repositories and analytics and have been driving their models and market position beyond contracting to more holistic management of the supply chain dynamics. Notwithstanding, many GPO’s are struggling to change their model based on aggregate volume and are losing purchasing volume amid increasing competition and shifting preferences.

New entrants

The changing nature of MedTechs' customer supply chain and purchasers increasingly becoming concerned about inflated GPO prices have provided an opportunity for data savvy new entrants such as OpenMarkets. The companyprovides healthcare supply chain software that stabilizes the equipment valuation and cost reduction and aims to reinvent how healthcare providers and suppliers work together to improve the way healthcare equipment is bought and sold. OpenMarkets’ enhanced data management systems allow providers to better understand what they need to buy and when. The company represents over 4,000 healthcare facilities and more that 125 equipment suppliers; and provides a platform for over 32,000 products, which on average sell for about 12% less than comparable offerings. In addition, OpenMarkets promotes cost efficiency and price transparency as well as stronger collaboration between providers and suppliers.

Amazon’s B2B Health Services

But potentially the biggest threat to MedTech manufacturers, GPOs and distributors is Amazon’s B2B Health Services, which is putting even more pressure on MedTechs to rethink their traditional business models and to work differently with healthcare providers and consumers. With a supply chain in place, a history of disrupting established sectors from publishing to food and a US$966bn market cap, Amazon is well positioned to disrupt healthcare supply chain practices, including contracting. In its first year Amazon’s B2B purchasing venture generated more than US$1bn and introduced three business verticals: healthcare, education and government. Already, hundreds of thousands of medical products are available on Amazon Business, from hand sanitizers to biopsy forceps. According to Chris Holt, Amazon’s B2B Health Services program leader, “there is a needed shift from an old, inefficient supply chain model that runs on physical contracts with distributors and manufacturers to Amazon's marketplace model”.

“If you look at the way a hospital system or a medical device company cuts purchase orders, identifies suppliers, shops for products, or negotiates terms and conditions, much of that has been constrained by what their information systems can do. I think that has really boxed in the way that companies’ function. Modern business and the millennials coming into the workplace, can’t operate in the old way,” says Holt.

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Is the digital transformation of MedTech companies a choice or a necessity?

Millennials are used to going to Amazon and quickly finding anything they need; even the most obscure items. According to Holt, “A real example is somebody who wants to find peanut butter that is gluten-free, non-GMO, organic, crunchy and in a certain size. And they want to find it in three to five clicks. That’s the mentality of millennial buyers at home, and they want to be able to do the same things at work. . . . The shift from offline traditional methods to online purchasing is very significant. It is our belief that the online channel is going to be the primary marketplace for even the most premium of medical devices in the future. That trend is already proven by data. So, we’ve created a dedicated team within Amazon Business to enable medical product suppliers to be visible and participate in that channel.”

MedTechs fight back

According to the two BCG reports, MedTech companies can fight back by using digital technologies to strengthen and improve their go-to-market activities. This, according to BCG, would enhance MedTechs' connectivity with their customers and help them to learn more about their needs. Indeed, employing digitization to improve customer-facing activities could help standardise order, payment and after-sales service behaviour by defining and standardizing terms and conditions. This could provide the basis to help MedTechs increase their access to a range of customers - clinicians, institutions, insurers and patients - and assist them to tailor their engagements to the personal preferences of providers and purchasers. This could provide customers with access to product and service information at anytime, anywhere and could form the basis to implement broader digitalized distribution management improvements, which focus on value-based affordable healthcare in the face of escalating healthcare costs and variable patient outcomes.

Predictive models

Many companies use predictive-modelling tools to forecast demand and geo-analytics to speed delivery and reduce inventories. Online platforms provide customers with an easy way to order products and services, transparently follow their shipping status and return products when necessary. Barcodes and radio-frequency identification (RFID) chips, which use electromagnetic fields to automatically identify and track tags that contain electronically stored information attached to products, help customers track orders, request replenishments and manage consignment stock.

Back-office improvements

Further, the 2017 BCG study suggests that MedTechs only have made limited progress in improving their back-office operations. Many manufacturers have more employees in their back offices than they do in their customer-facing functions and fail to leverage economies of scale. There is a significant opportunity for MedTechs to employ digital strategies to enhance the management of their back-office functions, including centralizing certain activities that are currently conducted in multiple individual countries.

Takeaway

For the past decade MedTech manufactures have been slow to transform their strategies and business models and still have been commercially successful. Some MedTech companies are incorporating digital capabilities into their products by connecting them to the Internet of Things (IoT), which potentially facilitate continuous disease monitoring and management. Notwithstanding, such efforts tend to be isolated endeavours - “one-offs” - and are not fully integrated into companies’ main strategies. This could run the risk of MedTech executives kidding themselves that they are embracing digitization while underinvesting in digital technologies. The two BCG studies represent a significant warning since digitization is positioned to bring a step-change to the MedTech sector, which potentially could wound successful manufacturers if they do not change.

Post scriptum

CoVID-19 has forced MedTechs to temporarily digitize their sales and marketing strategies as doctors and hospitals have restricted physical access, but still many MedTech companies look forward to returning to their single rep-based go-to market strategy when the coronavirus crisis is over. The question MedTechs need to ask themselves is, “Do our customers think that digital means of receiving sales and marketing information are significantly more effective and therefore should become permanent?”.

#COVID19 #pandemic #coronavirus #MedTech #internetofthings #IoT

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7 years, 9 months ago

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The IoT and healthcare

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Artificial Intelligence

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Internet of Things

IoT

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Over the next decade the combination of big data, analytics and the Internet of Things (IoT) will radically change healthcare
The social media revolution has raised peoples’ awareness of lifestyles and healthcare
The rise of smart watches and fitness sensors combined with IOT and Artificial Intelligence (AI) paves the way for preventative medicine becoming a key driver in the management of straining healthcare services and spending
Big data, analytics and the IoT is positioned to accelerate change away from output-orientated healthcare systems to value-based outcome-orientated systems
Patients and payers are increasingly aware of the opportunities and demanding change
The slowness for MedTech companies to change creates opportunities for newcomers to penetrate and grab share of healthcare markets
Regulation and requirements to undergo significant clinical studies to become standard of care will slow consumer and patient access to services

The IoT and healthcare

The Internet of Things (IoT) is positioned to radically transform healthcare. There are powerful social, demographic, technological, and economic drivers of this change. We describe some of these, and suggest that, within the next 10 years, there will be hundreds of millions of networked medical devices sharing data and knowhow, and this will drive a significant shift away from traditional healthcare systems focused on outputs to value-based systems dedicated to prevention and improving outcomes while lowering costs.

The IoT and its potential impact on healthcare

The IoT, which Cisco refers to as “the Internet of Everything” and GE as the “Industrial Internet” is also referred to as “machine-to-machine” (M2M) technologies, and as “smart sensors”. Whatever term is used, the IoT is an ever-expanding universe of devices embedded with microchips, sensors, and wireless communications capabilities, which enable them to collect, store, send and receive data. These smart devices and the data they collect are interconnected via the Internet, which significantly expands their potential uses and value. The IoT enables connectivity from anywhere to anywhere at any time, and facilitates the accumulation of big data and artificial intelligence (AI) to either complement or replace the human decision-maker. Over the next decade, anything that can be connected to the Internet probably will be. The Internet provides an almost ubiquitous, high-speed network, and cloud-based analytics, which, in nanoseconds, can read, analyse and act upon terabytes of aggregated medical data. Smart distributed services are positioned to become a powerful tool for health providers by optimizing medical results, preventing mistakes, relieving overburdened health professionals, improving patient outcomes, and lowering costs.

Two approaches to a common healthcare challenge

Let us illustrate the shift in healthcare referred to above by considering two different approaches to a shared healthcare challenge: that of providing people with personalized advice about maintaining and improving their wellbeing in order to ward-off lifestyle related illnesses, such as type 2 diabetes (T2DM). This is important because T2DM is a devastating lifestyle induced condition, which affects millions, costs billions, and in most cases can be prevented by lifestyle changes.

Approach 1

One approach is the world’s first nationwide diabetes prevention program, Healthier You, which was launched by NHS England, Public Health England and Diabetes UK in 2016. It is aimed at the 11m people in England thought to have pre-diabetes, which is where blood sugar levels are higher than normal, but not high enough for a diagnosis of T2DM. About 5-10% of people with pre-diabetes progress to "full-blown" T2DM in any given year. Healthier You is expected to be fully operational by 2020. Each year thereafter the program is expected to recruit 100,000 people at risk of T2DM. Personal lifestyle coaches will periodically monitor the blood sugar levels of these, and make recommendations about their diets and lifestyles. This is expected to prevent or slow the people with pre-diabetes progressing to full-blown T2DM.

Approach 2

The second approach is GymKit and Chatbox. The former is a new feature Apple is expected to add to its watch in late 2017, and the latter is a mobile app developed by Equinox, a New York-based health club chain, for its members.

Gymkit will enable the Apple watch to have seamless connectivity to the overwhelming majority of different kinds of cardiovascular equipment used in most fitness centres. Currently, there are a variety of smartphone apps, which allow gym users to connect to cardiovascular machines, but these are at best patchy. Gymkit is different, and will automatically adjust a user’s personalized needs to any cardiovascular machine without the user having to press a button. Itwill then wirelessly collect a range of data - if on a treadmill: speed, duration, incline, etc., - and combine these data with the user’s heart rate, age, gender, weight and body type to make health-related calculations and recommendations, and wirelessly transmit these to the user.

Chatbox does something similar. Ituses artificial intelligence (AI) to simulate the human voice, which talks to new health club members, encourages them to set personal goals, and sends them messages when they fall short. Further, Chatbox has sensors, which track users while they are in the gym, and suggests ways of improving and extending their personalized workouts. A survey, undertaken by Equinox of its members across 88 of its facilities reported that Chatbox users visited the fitness centres 40% more often than those without the app. This is significant because people who fail to form a habit of physical exercise tend to drop lifestyle goals.

The 2 approaches compared

Healthier You is unlikely to have more than a modest impact on the UK’s diabetes burden because the format it has adopted is like filling a swimming pool with a teaspoon. It would take over 100 years to recruit and counsel the 11m people with pre-diabetes, especially while the prevalence levels of pre-diabetes and T2DM in the UK are increasing. Successfully changing the diets and lifestyles of large numbers of people requires an understanding of 21^st century technologies. Ubiquitous healthcare technologies such as smartphone apps and wearable’s that support lifestyles abound, and have leveraged people's enhanced awareness of themselves and their health. Hence peoples’ large and rapidly growing demands for such devices to track their weight, blood pressure, daily exercise, diet etc. From apps to wearables, healthcare technology lets people feel in control of their health, while potentially providing health professionals with more patient data than ever before.

The IoT and consumers

There are more than 165,000 healthcare apps currently on the market, there is a rapid growth in wearables, and smartphone penetration in the US and UK has surpassed 80% and 75% respectively. According to a 2017 US survey by Anthem Blue Cross, 70m people in the US use wearable health monitoring devices, 52% of smartphone users gather health information using mobile apps, and 93% of doctors believe mobile apps can improve health. 86% of doctors say wearables increase patient engagement with their own health, and 88% of doctors want patients to monitor their health. 51% of doctors use electronic access to clinical information from other doctors, and 91% of hospitals in the US have moved to electronic patient records (EPR).

Notwithstanding, these apps and wearables are rarely configured to aggregate, export and share the data they collect in order to improve outcomes and lower costs. This reduces their utility and value. However, the large and rapid growth of this market on the back of the social media revolution, and the impact it is having on shaping the attitudes and expectations of millions of consumers of healthcare, positions it well as a potential driver of significant change.

A “minuscule fraction” of what is ultimately possible

According to Roger Kornberg, Professor of Structural Biology at Stanford University, the current capabilities of smart sensors like those used in Apple’sGymKit and Equinox’s Chatbox, “is only a minuscule fraction of what is ultimately possible . . . A sensor attached to a smartphone will enable it to answer any question that we may have about ourselves, and our environment,” says Kornberg. Smart sensors can provide you with a doctor in your pocket, which can be connected to a plethora of other devices that could collect, store, analyze and feedback terabytes of medical information in real time. Kornberg, who won the 2006 Nobel Prize for Chemistry, is excited about the disruptive effect, which smart sensors are having on traditional healthcare systems. This is because they can be connected to almost any medical device and human organ to, “monitor specimens . . . record in real time the health status of individuals, . . . transmitelectronic signals wirelessly, . . . (and) provide responses to any treatment,” says Kornberg.

Kornberg is engaged in developing sensors with the ability to detect and measure biological signals and data from humans, which can be wirelessly linked to smartphones to transmit the information for analysis, storage and further communication. Kornberg is convinced that, in the near term, we will be able to create a simple and affordable networked device that will, “detectan impending heart attack, in a precise and quantitative manner, before any symptoms”.

Potential of sensor technology

The excitement in the development of biosensors

Drivers of the IoT and market trends

Partly driving the IoT in healthcare and other industries are the: (i) general availability of affordable broadband Internet, (ii) almost ubiquitous smartphone penetration, (iii) increases in computer processing power, (iv) enhanced networking capabilities, (v) miniaturization, especially of computer chips and cameras, (vi) the digitalization of data, (vii) growth of big data repositories, and (viii) advances in AI and data mining.

Market trends suggest substantial growth in the total number of networked smart devices in use. By 2020, when the world’s population is expected to reach 7.6bn, it is projected that there will be between 19 and 50bn IoT-connected devices worldwide, more than 8bn broadband access points, more than 4m IoT jobs, and the number of installed IoT technologies will exceed that of personal computers by a factor of 10.

Crisis in primary care is a significant driver of change

In addition to these technological drivers, the simultaneous population aging and the shrinking pool of doctors also drives the IoT in healthcare. Increasing numbers of older people presenting with complex comorbidities significantly increases the large and rapidly growing demands on an over-stretched, shrinking population of doctors. This results in a crisis of care.

A 2015 Report from the Association of American Medical Colleges (AAMC) suggests that there is an 11 to 17% growth in total healthcare demand, of which a growing and aging population is a significant component. Further, the Report suggests that the US could lose 100,000 doctors by 2025, and that primary care physicians will account for 33% of that shortage.

There is a similar crisis in the UK, where trainee GPs are dwindling, young GPs are moving abroad, and experienced GPs are retiring early. According to data from the UK’s General Medical Council (GMC), between 2008 and 2014 an average of nearly 3,000 certificates were issued annually to enable British doctors to work abroad. Currently, there are hundreds of vacancies for GP trainees. Findings from a 2015 British Medical Association (BMA) poll of over 15,000 GPs, found that 34% of respondents plan to retire by 2020 because of high stress levels, unmanageable workloads, and too little time with patients.

Interestingly, Brexit is expected to compound the crisis of care in the UK. According to a 2017 General Medical Council survey of more than 2,000 doctors from the EU working in the UK, 60% said they were considering leaving the UK, and, of those, 91% said the UK’s decision to leave the EU was a factor in their considerations.

Changing healthcare ecosystems

These trends help healthcare payers to employ IoT strategies in an attempt to replace traditional healthcare systems, which act when illnesses occur and report services rendered, with value-based healthcare systems focused on outcomes. US payers are leading this transformation. Some payers in the US have employed IoT strategies to convert a number of devices used in various therapeutic pathways into smart devices that collect, aggregate and process terabytes of healthcare data gathered from thousands of healthcare providers, and electronic patient records (EPRs) describing millions of treatments doctors have prescribed to people presenting similar symptoms and disease states. Cognitive computing systems analyse these data and instantaneously identify patterns that doctors cannot. Such systems, although proprietary, are positioned to help reduce the ongoing challenges of inaccurate, late, and delayed diagnoses, which each year cost the US economy some US$750bn and lead to between 40,000 and 80,000 patient deaths.

IBM Watson

IBM’s supercomputer, Watson is a well-known proprietary system that uses IoT strategies that include a network of smart sensors and databases to assist doctors in various aspects of diagnoses and treatment plans tailored to patients’ individual symptoms, genetics, and medical histories. Watson draws from 600,000 medical evidence reports, 1.5m EPRs, millions of clinical trials, and 2m pages of text from medical journals. A variant, IBM Watson for Oncology, has been designed specifically to help oncologists, and is currently in use at the Memorial Sloan-Kettering Cancer Center in New York. Also, it is being used in India where there is a shortage of oncologists. The Manipal Hospital Group, India’s third largest healthcare group, which manages about 5,000 beds, and provides comprehensive care to around 2m patients every year, is using Watson for Oncology to support diagnosis and treatment for more than 200,000 cancer patients each year across 16 of its hospitals.

In 2016 IBM, made a US$3bn investment designed to increase the alignment of its Watson super cognitive computing with the IoT, and allocated more than US$200m to its global Watson IoT headquarters in Munich. IBM will have over 1,000 Munich-based researchers, engineers, developers and business experts working closely with specific industries, including healthcare, to draw insights from billions of sensors embedded in medical devices, hospital beds, health clinics, wearables and apps in endeavors to develop IoT healthcare solutions.

Babylon

Using a similar IoT network of smart sensors and databases, Babylon, a UK-based subscription health service start-up, has launched a digital healthcare AI-based app, which offers patients video and text-based consultations with doctors, and is designed to improve medical diagnoses and treatments. Early in 2017, NHS England started a 6-month study to test the app’s efficacy by making it available to 1.2m London residents. The Babylon app is expected to be able to analyse, “hundreds of millions of combinations of symptoms” in real time, while taking into account individualized information of a patient’s genetics, environment, behavior, and biology. Current regulations do not allow the Babylon app to make formal diagnoses, so it is employed to assist doctors by recommending diagnoses and treatment options. Notwithstanding, Ali Parsa, Babylon’s founder and CEO says, "Our scientists have little doubt that our AI will soon diagnose and predict personal health better than doctors”.

Market forecasts

Market studies stress the vast and growing economic impact of the IoT on healthcare. Business Insider Intelligence (BII) suggested that the IoT has created nearly US$100bn additional revenue in medical devices alone. It forecasts that cost savings and productivity gains generated through the IoT and subsequent changes will create between US$1.1 and US$2.5trillion in value in the healthcare sector by 2025. In 2016, Grand View Research Inc. projected that the global IoT healthcare market will reach nearly US$410bn by 2022. A 2013 Report from the McKinsey Global Institute on Disruptive Technologies, suggests that the potential total economic impact of IoT will be between US$3 and US$6trillion per year by 2025, the largest of which will be felt in healthcare and manufacturing sectors. Although forecasts differ, there is general agreement that, over the next decade, the IoT is projected to provide substantial economic and healthcare benefits in the way of cost savings, improved outcomes, and efficiency improvements.

IoT and MedTech companies

We have briefly described the impact of the IoT on patients, healthcare payers and providers. But what about MedTech companies? They have the capabilities and knowhow to develop and integrate the IoT into their next generation devices. However, MedTech innovations tend to be small improvements to existing product offerings. Data, accumulated from numerous smart medical devices, are enhanced in value once they are merged, aggregated, analyzed and communicated. And herein lies the challenge of data security. Arguably the greater the connectivity between medical devices, the greater the security threat. In 2013 the FDA issued a safety communication regarding cyber security for medical devices and health providers, and recommended that MedTech companies determine appropriate safeguards to reduce the risk of device failure due to cyber-attacks. The cautious modus vivendi of most MedTech companies suggests that, in the near term, a significant proportion will not develop IoT strategies, and this creates a gap in the market.

The IoT and new and rising healthcare players

Taking advantage of this market gap is a relatively small group of data-orientated companies, which have started to employ IoT technologies to gain access to healthcare markets by developing specific product offerings, increasing collaborative R&D, and acquiring new data oriented start-ups. For instance, in addition to IBM and Apple mentioned above, Amazon is expected to enter the global pharmaceutical market, which is anticipated to reach over US$1 trillion by 2022. Microsoft has used IoT strategies to build its Microsoft Azure cloud platform to facilitate cloud-based delivery of multiple healthcare services. Google Genomics is using IoT strategies to assist the life science community organise the world’s genomic data and make it accessible by applying the same technologies that power Google Search to securely store petabytes of genomic information, which can be analysed, and shared by life science researchers throughout the world.

Takeaways

The powerful social, demographic, technological and economic drivers of healthcare change over the next decade suggest an increasing influence of IoT technologies in a sector not known for radical or innovative change. Research suggests that hundreds of millions of networked medical devices will proliferate globally within the next decade. The potential healthcare benefits to be derived from these are expected to be significant, especially through enhancing preventative and outcome-oriented healthcare while reducing costs. This has to be achieved in a highly regulated environment where concerns of data security are paramount. To reap the potential benefits of the IoT in healthcare, policymakers will have to reconcile the need for IoT regulation with the significant projected benefits of the IoT. Smart technologies require smart management and smart regulation.

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