Is IoT potential understated?
The Internet of Things has garnered a great deal of extravagant publicity lately, including about its potential impact on healthcare. Yet a recent report suggests that IoT's potential is actually understated.
A McKinsey Global Institute report, The Internet of Things: Mapping the value beyond the hype, projects that the economic impact of IoT in human health and wellness could be $170 billion to nearly $1.6 trillion globally in 2025, the great proportion of which would come from using IoT devices to monitor and treat illness.
"Value would come from improving quality of life and extending healthy life spans for patients with chronic illnesses, and reducing cost of treatment," McKinsey said. "The second-largest source of value for humans would be improved wellness -- using data generated by fitness bands or other wearables to track and modify diet and exercise routines."
New applications have the potential to transform a wide range of health-care therapies, the report said. Ingestibles and injectables -- smart pills and nanobots -- could eventually to replace many surgeries with less invasive procedures that could offer faster recovery, reduced risk of complications, and lower cost. "While these technologies are still in development, if they are adopted widely in the next ten years, they have the potential to raise the economic impact of IoT in health care substantially beyond the $1.6 trillion we estimate here," the report said.
The use of IoT technology to monitor and manage human health and fitness is growing rapidly. An estimated 130 million consumers worldwide use fitness trackers today. The number of connected fitness monitors is expected to exceed 1.3 billion units in 2025 with the rise of smart watches and other wearable devices. Sensors and low-power chips - the basic technology for fitness monitoring devices - are well established, and prices are expected to decline as volumes rise.
McKinsey expects rapid growth in devices and systems for in-home monitoring of patients, particularly those with chronic conditions such as diabetes. "These devices have already demonstrated potential to improve health outcomes and reduce health-care costs among patients with acute forms of chronic heart failure, diabetes, and COPD (chronic obstructive pulmonary disease)," the report said.
IoT devices for human health include implantables, ingestibles, and injectables, such as nanobots that can clear arteries or help detect early-stage cancer, the report said. These devices have not yet reached the clinical trial stage. "However, when they are ready for widespread adoption, their impact could be as large as or larger than the benefits of the other technologies we discuss here," the report said.
In advanced economies, some of the greatest benefits of IoT in health care would result from improving treatment of chronic diseases. In developing economies, the greatest benefits of IoT applications could be in expanding delivery of health-care services to the underserved. For example, "with IoT-based services, it can become possible to diagnose hypertension in rural China or help diabetics in India avoid complications," the report said.
The current costs for using remote systems to help treat diabetics can be as high as $1,200 a year, which limits their cost-effectiveness. McKinsey "conservatively" estimated that remote monitoring can reduce spending on clinical trials by 10 to 15 percent, and recent case studies have found savings could be as high as 85 percent. Given global spending on clinical trials of close to $190 billion per year, McKinsey estimated that remote health monitoring could generate up to $35 billion in value in 2025 through reduced trial costs.
The study says policy makers may need to develop incentives to use IoT monitoring as part of routine care for specific types of patients. In the U.S, for example, if public programs such as Medicare agree to pay for IoT monitoring of diabetics, the private insurance industry could follow suit.
"Government programs can also encourage use of IoT by providing incentives for specific outcomes such as paying hospitals that are able to reduce the readmission rate for heart disease patients," the study concluded. "In developing economies, policy makers may need to allocate more resources to improve telecom infrastructure to enable IoT use."