Remote health management market is growing fast, but reimbursement lags
The remote health management market (RHM) is the smallest, but fastest growing segment of the home health management (HHM) market, according to global strategy consulting firm, Scientia Advisors. But to reach its full potential health insurers must broaden their reimbursement practices to encourage greater physician adoption, the firm says.
Harry Glorikian, Scientia Advisors' managing partner, says many physicians are reluctant to embrace RHM because government and private health insurers reimburse only for its use in specific disease states or rural populations.
Currently reimbursement is provided only for two-way video consultations for underserved (usually geographically remote) patients, and physicians are not reimbursed for phone remote consultation.
Scientia sees Medical Home pilots, which reorganizes reimbursement and re-centers patient responsibility on the physician, as a potential solution to reimbursement issues.
"While remote monitoring presents great opportunities for improving healthcare and cutting costs, RHM will not realize its full potential unless it is adopted by practitioners," Glorikian said. "We believe that large-scale clinical trials, sponsored by government or manufacturers, could demonstrate the value of wider spread remote health monitoring to payers, who, in turn, would change their reimbursement practices."
Scientia's review found that the HHM market is expanding at a compound annual growth rate (CAGR) of 10 percent through 2012.
"This growth is driven in part by strains in the healthcare system, high healthcare costs, insufficient personnel and an aging population with chronic conditions that, in many cases, can be most cost effectively monitored or treated at home," said Glorikian.
While home health agencies (HHA) — organizations that provide skilled nursing and other therapeutic services in patients' homes — account for the lion's share of the HHM market, (80 percent), remote health management with a 1.4 percent market share is the smallest, but fastest growing segment. Scientia projects that RHM will double from $1.8 B in 2007 to $3.6B in 2012, representing a CAGR of 15 percent.
Since 2007, other home health segments, including point-of-care diagnostics, infusion and respiratory therapy services, drug delivery, durable medical equipment, and supplies, have exhibited CAGRs ranging from 7 to 10 percent, Scientia found.
Remote health management includes telehealth services and remote patient monitoring (RPM) products. Telehealth involves the use of telecommunications technologies to support long-distance clinical health management, education, coaching and assessment. RPM products refer to the tools that patients themselves use to collect medical data (such as blood pressure or glucose level) that is electronically transmitted to nurses and doctors, who determine if further action is required.
"Daily patient self-monitoring and centralized data analysis increase the effectiveness of preventive care, lessen strain created by personnel shortages, allow healthcare professionals to attend to more patients than they otherwise might, and control rising healthcare costs by helping reduce hospital readmissions," Glorikian said.
Major electronics and computer companies such as Intel, IBM, Motorola and Philips are partnering with or acquiring companies to produce innovative products for remote health management, Glorikian said. He noted, however, that health insurance companies (public and private) are hesitant to reimburse healthcare providers for new and unproven technologies.
Click here to download Scientia's full review.