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A new review from Scientia Advisors finds  that the fastest growing segment of the burgeoning home health care market–remote health management (RHM) –can improve health and cut health care costs–but will reach its full potential only if health insurers adopt reimbursement practices encouraging greater physician adoption. 

In the review,  Scientia reports that the global home health management market is expanding at a compound annual growth rate (CAGR) of 10% through 2012–driven in part by strains in the health care system, high health care costs, insufficient personnel and an aging population with chronic conditions that, in many cases, can be most cost effectively monitored or treated at home.

Home health agencies (HHA)- organizations that provide skilled nursing and other therapeutic services in patients’ homes – account for  80%, of the home health market.  Remote health management (RHM) with a 1.4% market share is the smallest segment, but with a 15 percent CAGR, is gorwing the fastest.  Scientia projects that RHM will double from $1.8 B in 2007 to $3.6B in 2012.

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 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.

According to Harry Glorikian, Scientia’s managing partner, “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.”
Not surprisingly, 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.

However, 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.

“While remote monitoring presents great opportunities for improving health care 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. “

Easy-to-use devices and software are also needed, according to the review.

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 found.

The review is available at www.scientiaadv.com.

Scientia Advisors, based in Boston and San Francisco,  is a global management consulting firm specializing in growth strategies for major and emerging companies in health care, life science, biotechnology and nutrition. Full disclosure: Scientia is my client.

—Anita M. Harris
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