Medical Device Daily Contributing Writer

SAN FRANCISCO — There is no debate about whether the market for in-home medical devices and services is going to see explosive growth. Everyone even agrees on a market size number — a whopping $40 billion annually.

The troubling question is when, exactly, is this revolution going to happen?

Over 400 representatives of device makers, information technology (IT) companies and health plans converged here on Monday and Tuesday for Healthcare Unbound, an annual conference dedicated to moving health technologies and services out of the hospital and into the home.

Sitting on the edge of the bay, guessing when the metaphorical tide would finally roll in, was the main topic for discussion outside the presentations and panel discussions.

"We have been stuck in the mud for years now waiting for the reimbursement approvals that will get this market moving," said a representative from McKesson (San Francisco), the healthcare services and IT company.

Elizabeth Boehm of Forrester Research (Cambridge, Massachusetts) created the favorite graphic used at the event, a chart showing hyper-growth for the industry, skyrocketing from a few billion dollars in 2007 to the forecast $40 billion by 2015.

She told Medical Device Daily that her projection is based on the Centers for Medicare & Medicaid Services completing its three-year study of new reimbursement policies in 2008, taking some time to digest the findings and then making changes to reimbursement "for in-home care and services."

Boehm said that after that moment the growth will come all at once.

"The needs of patients, ultimately the consumers of these products and services, are so diverse and variable across disease management, daily assisted living, post-hospitalization and wellness management, that there will not be [just] a single category winner," she said.

"This is a rising tide that will float all boats," Boehm said. "And the tide is coming in 2010."

Jeremy Nobel, from the faculty of the Harvard School of Public Health (Boston), agreed with the predicted market potential but not the way the tide will rush in.

"It is not going to happen with a headline announcing that Medicare is now going to pay for home care," he told MDD. "It is going to come more slowly from the targeted disease-management areas. For example, heart disease is starting to get some traction now and it will grow from that."

The results from the first year of the Medicare study, released the weekend prior to the conference, were encouraging.

Begun in 2005 and continuing through 2008, the program offers experimental incentives for the 10 participating physician groups, rewarding doctors for keeping their 225,000 patients well, but also keeping them well away from hospitals and expensive treatments.

"It is trending in a very positive way," said Herb Kuhn, acting deputy administrator for CMS. "It is where the Medicare program has to go."

Vince Kuraitis, a keynote speaker for the conference from Better Health Technologies , said that 2008 would be the break-out year for those manufacturers dreaming of a digital home connected wirelessly to healthcare services.

"We are a collection of companies with a sexy story to tell on the 6 o'clock news, showing grandmother happy at home connected to her monitors," he said. "But so far there have not been any sightings of the tipping point that is going take us to the 30% market share that then leads to exponential growth."

The real view, Kuraitis said, is that today there are fewer than 10% of physicians using an electronic health record, and regional health organizations are not getting any traction with at-home care programs.

One year ago, he said, "it looked like we were reaching that tipping point, but then the results of the Medicare study showed mixed success for remote monitoring of chronic disease management, so we are back to square one."

In addition to the obstacles of reimbursement and reticence of doctors in connecting with electronic health systems, Kuraitis added two other deal-breaking limitations to be overcome before the home care revolution takes hold: First, the non-interoperability of devices made for home use; second, what he called the medical device company mindset that leads to high-priced, overbuilt products as compared to the consumer electronics mindset that produces simpler devices built for retail price competition.

Addressing the interoperability issues is the Continua Health Alliance (Beaverton, Oregon), a non-profit industry association formed last year at the Healthcare Unbound conference and today numbering more than 120 companies and 700 members worldwide.

David Whitlinger, president of Continua, who also serves as director of healthcare device standards for Intel (Santa Clara, California), reported to conference participants that the draft version of guidelines for device standards are being reviewed this week by the Continua board and through the end of this year interoperability testing and certification will be developed.

In August, Continua will hold a press event to unveil the draft guidelines and the scheduling of regional "plugfests" for 2008, informal events for vendors to test devices in an environment free from disclosures requirements.

Continua has established three categories for device guidelines: health and wellness, disease management, and aging independently.

Whitlinger said Continua in August also will select a group charged with compiling existing documentation from the U.S. and Europe addressing efficacy and cost-effectiveness of in-home care to make a pool of data available for members to bolster their case for reimbursement with Medicare and commercial insurance plans.

"Reimbursement drives strategy," said James Sweeney, the blunt-speaking CEO for Cardionet (San Diego), a company that this year will generate some $90 million in sales for mobile cardiac outpatient telemetry products focused on assisting physicians with the diagnosis and treatment of patients with arrhythmias.

A veteran of eight start-ups in the medical technology industry, Sweeney told conference participants that once a remote monitoring medical device moves above the radar screen for payers, "you will need more than a vision — you will need clinical trials to continue."

He added that clinical efficacy "is only half of what is required." Demonstrating cost-effectiveness for a device is key and "the term evidence-based research is only a code word for saving money."

Focused on supplying devices to healthcare organizations directly, Sweeney said he has strong doubts about the enthusiasm expressed by many at the conference for an eventual retail market for in-home medical devices.

"The retail market will evolve," he agreed, "But I have an extreme view about how long it will take before consumers reach into their own pockets. I would not put my money on any consumer rush to this market before five more years."