Medical Device Daily Senior
Remote health management (RHM) is the fastest growing segment of a burgeoning home health management market, according to a market review released this week by Scientia Advisors (Cambridge, Massachusetts), a global strategy consulting firm. But the RHM segment's full potential will not materialize unless health insurers adopt reimbursement practices that encourage greater physician adoption, the firm concluded.
Harry Glorikian, a managing partner at Scientia, spoke candidly with Medical Device Daily Thursday about some of the more surprising findings in the review, and ways this segment might overcome the adoption roadblocks in its path.
Reimbursement is to healthcare – and in this case, RHM adoption – what location is to real estate sales. Instead of “location, location, location,“ the mantra in healthcare seems to be “reimbursement, reimbursement, reimbursement,“ Glorikian said.
He explained that when doctors treat patients they are doing both their job and their passion. “Doctors don't often admit it,“ Glorikian said, but they're often doing their “job first and passion second.“ In other words, “if they don't get paid to perform a particular service, they aren't particularly motivated to do so.“
So, if a doctor is paid for office visits, but they are not paid to call patients on the phone, they are going to continue seeing patients in the office rather than adopt remote healthcare monitoring services.
The trick, according to Glorikian, is to promote a shift towards outcomes-based reimbursement. In such a scenario, doctors would be given responsibility of their patient's health, not just the service they provide, he said.
In its review of this industry, Scientia found that the global home health management (HHM) market is expanding at a compound annual growth rate (CAGR) of 10% 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,“ Glorikian said.
According to the report, home health agencies – organizations that provide skilled nursing and other therapeutic services in patients' homes – account for 80% of the HHM market. However, RHM – with a 1.4% market share – is the smallest, but fastest growing segment. Scientia projects that RHM will double from $1.8 billion in 2007 to $3.6 billion in 2012, representing a CAGR of 15%.
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%, Scientia noted.
One finding that did surprise the firm, Glorikian told MDD, is the low level of RHM adoption among home health agencies. “We thought that home health agencies [would have] a much higher level of adoption of remote health management because we see it as a good fit,“ he said, explaining that reimbursement for such agencies is already beginning to be linked to patient outcomes.
It makes sense for home health agencies to keep people out of the hospital because their reimbursement rate goes down when the patient is readmitted to the hospital within 60 days of discharge, Glorikian said. If such agencies had “a different way of keeping on top of everything it would be a much better way for them to make money,“ he said.
RHM 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 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.
When thinking about remote health management, the Big Brother theory tends to come to mind – but unlike in George Orwell's Nighteen Eighty-Four novel, this isn't necessarily a bad thing.
“Remote health helps patients be vigilant in managing their disease,“ Glorikian said, explaining that when people know somebody is watching, their behavior tends to be different. “This act of monitoring also seems to encourage better behavior as patients see positive or negative results,“ he said. “Like an automated feedback loop; patients who really watch their diabetes number are much more vigilant about [managing their blood sugar level].“
The problem, of course, comes down to cost. If a small firm needed to buy 50 remote monitors at $1,000 a pop, that would add up to a lot of money, Glorikian said. Perhaps a solution would be to rent the equipment to home health agencies, he suggested. Or bundle the rent costs with ongoing service fees. “Tie the RHM payments to income stream of the home health agency and kind of spur adoption,“ he said.
Not surprisingly, major electronics and computer companies such as Intel (Santa Clara, California), IBM (Armonk, New York), Motorola (Schaumburg, Illinois) and Philips (Amsterdam, the Netherlands) are partnering with or acquiring companies to produce products for remote health management (see Sidebar, p. 8).
“Besides reimbursement, lesser hurdles are broadband connectivity,“ Glorikian said. “Some of these systems are going to require more data, or more information, to go back and forth, and – I hate to say it – but a phone line might do it.“
He also noted there are some technology standardization concerns that could stand in the way of full RHM adoption.
“We're also seeing a flurry of product, which makes selecting the platform for the buyer a big decision,“ Glorikian said.
Those who attended this year's Healthcare Information and Management Systems Society (HIMSS; Chicago) meeting in Atlanta earlier this month can attest to the vast choices available in this sector. HIMSS attendees were dazzled with healthcare IT products – remote patient monitoring and electronic health record products in particular – available, literally, in the palm of their customers' hand via an Apple (Cupertino, California) iPhone or similar mobile device (Medical Device Daily, March 3 – March 10, 2010).
Another roadblock standing in the way of full RHM adoption, Glorikian noted, is clinical data.
“The most convincing data is on small scale populations or on specific [disease areas],“ Glorikian said. “The data can't be applied on a broader scale.“
For example, he said, if someone ran a study demonstrating that patients in the south benefit from remote healthcare management it won't convince providers and payers in other geographies that RHM services will benefit their patients. A small study is much less convincing than a large, properly controlled trial, Glorikian said. But of course cost, capability, and risk are the key reasons a larger trial has not yet been conducted.
Such data may not be that far off, though. Earlier this month the Cleveland Clinic (Cleveland)and Microsoft (Redmond, Washington) reported that the use of at-home medical devices to connect doctors and patients via the Internet can help patients and their physicians work more efficiently together to manage chronic conditions. The two organizations collaborated on a pilot project in December 2008 that pairs the hospital's electronic medical records system with the software company's online HealthVault service to monitor patients' health conditions. More than 250 participants enrolled – 26% with diabetes, 6% with heart failure and 68% with hypertension – making it the first physician-driven pilot project in the country to follow multiple chronic diseases in a clinical setting, according to the hospital (MDD, March 9, 2010).
“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.“
Amanda Pedersen, 229-471-4212;