Analyst: Wireless health needs more input from CE companies

By Brian Dolan

Scott Smith, Principal, ChangeistThe Principal at Changeist, Scott Smith, recently discussed wireless health trends with mobihealthnews in an interview that covered everything from long term drivers of wireless health to wireless carrier liability. Smith has consulted with large consumer technology companies for the past 15 years, and most recently began identifying emerging tech markets for investment. Wireless health has recently become one such market.

Prior to founding Changeist in 2007, Smith served as a futurist and director for Washington, DC-based foresight firm Social Technologies, helping respected brands such as Nokia, Honda, P&G, Kellogg's and McDonald's understand and plan for new consumer behaviors and the technologies that will impact their lives in the future. Prior to this, Smith led consumer and business research and consulting practices for the Yankee Group, Current Analysis and Jupiter Communications, in London, Washington, DC and New York, respectively.

MobiHealthNews: When did you begin examining the wireless health opportunity and what trends are driving interest among the big consumer tech companies?

Smith: Actually, in doing some more in-depth sort of future-facing research four or five years ago, working for a large mobile phone company, we started looking at three, five, ten years into the future for this industry as well as looking at other markets around the world to try to understand what other applications were going to emerge that they should take under consideration for developing markets. What's coming after what comes next? Looking at those areas there are a number of different directions that you can begin to examine.

One is looking at demographic change. The fact that we are seeing an aging population more or less worldwide with very few exceptions, national populations are growing older, the global population is growing older. Aging means health concerns. That presents in the long term an enormous opportunity for the application of technology, in particular mobile technology. On a more focused level, we were looking at countries like Japan and Korea that were already further ahead in developing health applications for mobile platforms and seeing even there, whether it's basic simple things like blood glucose testing, heart rate monitoring or very simple wireless transmission of vital data. It was being implemented in handsets and devices in those markets. Those were all trip wires and indicators that this was going to become a more significant issue closer in to this time frame now.

Which of these big tech companies do you see investigating wireless health devices or services right now? Any specific events trigger recent interest?

Now it's beginning to move much more center-stage. If you look at the investments some of the large tech firms are making -- Intel is a great example, they are sitting down at the infrastructure level, but they realize this is a critical application for them to be developing for the next decade. IBM, Nokia... they are all looking into this in bigger and bigger ways. From the kind of work that I do you start to look for little weak signals on the horizon, little signals here and there, and now it's starting to build up to a louder pitch to tell us this is a big issue. Then, of course, with the iPhone 3.0 announcement, Apple sort of put their foot down and said this is a serious area we want to look at to enable certain partnerships and open up a platform that is really interesting for mobile health data capture and transmission begins to become something of a tipping point at least for public attention and development dollars.

Are you actively looking at wireless health and encouraging your clients to invest in it?

I'm working on a project right now, where we started by looking through a very wide, wide frame. Started by looking at prototypes and demos and then on the economical side you look at the forces associated with that. As I am helping technology companies find their next area of investment, this is one of the handful that is a next opportunity for them.

About six years ago mobile-enabled healthcare came up in a very big way, but interest in it seemed to die down very quickly. Any insight into why it's been quiet for the past few years?

I think different companies were grasping at the same factors but it was a different operating environment. Again, you can look twenty years out and see undeniable demographic data that we are going to have this number of Baby Boomers reaching retirement. The data is there, you know it's coming, you just have to decide what to do with it. Three to five years ago we were looking at a much more closed technology environment where it was going to have to be a Microsoft solution, an IBM solution or an HP solution. It was probably much more focused on doctor's technologies that were more focused on purely clinical or medical in their nature. Developing an application for just one of the handsets makes it much more difficult to scale up, but in the past four or five years across so many technology areas we have seen an opening of platforms. This has allowed more things to connect to other things -- devices connecting to platforms. Now you can take a somewhat open mobile platform, in the sense that there is a software development kit for an iPhone or an Android phone and anyone can write for it. It really opens up the gates of innovation. On the one side, on the innovation side, that's a key factor: There are so many more points of entry into this market now than there were five years ago is remarkable.

The fact that Apple is the hop topic right now would have been laughable a few years ago. You would have thought that they would have to go out and make a dedicated monitoring device just for medical applications. What we have now with the iPhone is that it's really a black box. It's a platform that you can put anything in it and it has certain capabilities that make it attractive. The other issue too is that there is a greater need for the wireless industry to find other revenue sources. Who has a lot of money to tap? Right now? The healthcare industry. There are dollars for investment. The consumer demand for medical services is the highest it's ever been. There's an economic driver and an innovation driver. That's what made the difference. As a related technology issue, wireless has come along so far that you don't have to build a closed [dedicated] network from point to point as part of this endeavor.

As with all emerging tech trends, there is currently a good amount of hype surrounding wireless health. What's your take on the pitfalls of hype in this case and what are some of the challenges that should help the market get beyond the hype talk?

I for one am not in the camp that there is this fantastic, open, limitless new opportunity and it's all going to be based off of consumer-grade devices. It's the typical future trap of saying "Everyone will do this..." or that we will "all" have devices that will transmit our data. There are so many intervening factors that have to be taken care of. A lot of companies that our currently outside of the medical space are wary about how they are going to get into this because there are liability issues that don't exist when a call fails. If you are driving along the highway calling home and your call drops: No big deal. If you are transmitting vital medical data and your call drops: That is a big deal. There are mitigating regulatory and reliability factors that have to be taken care of. There is a range of devices and services that still have to emerge between the industrial-grade/hospital-grade heavy equipment that we rely on today and the iPhone or Android phone in our pocket. There's an entire evolutionary chunk that still has to be filled in there. I think that is going to happen and it is happening now. The Philips, Siemens and GE Medicals of the world are working on that. There still needs to be some input from more of the companies in the consumer electronics side to fill in the gaps.

What's an example of one of the products or tools that would fill in that gap. What's missing?

Well, you have to have tools that can leave the hospital and go home with people. That tool would have to meet the requirements of a hospital environment or a doctor's office environment. As healthcare gets moved more and more outside of hospitals and outside of doctors' offices and into retail environments, like those 24-hour clinics we now have on strip mall corners in most suburbs, there needs to be a dual-use technology that's comfortable enough for a consumer to use and be trusted with that's simple enough, but at the same time, complex enough to satisfy the needs of a clinician. Little diagnostic monitors that can leave the hospital and come home with you. Right now we have to disconnect from the machine at the doctor's office or clinic and then put on our $24.99 blood pressure monitor we buy at Target. That's kind of a jump in complexity, reliability, connectivity, etc.

We will probably start to see consumer electronics companies making more health, wellness and medical devices that are probably a bit more durable and heavy-grade and can be used in a wider range of healthcare environments. An early example of that is something like Philips' [HearStart Home Defibrillator] AED A few years ago who would have thought you would be able to buy a defibrillator at a big box retail store? It used to be something that stays bolted to a wall in a major public facility or in the back of an ambulance but now we can buy those and take them home. They are a high enough quality, grade and cost that they come very near the professional level. That's what I'm reaching for there -- more of those types of devices will emerge. The business plan looks good if you are a consumer electronics company -- people are getting older, sicker but there is less available healthcare attention of the kind that we have known in the past from a doctor, nurse of physician's assistant. We need to look after our health on our own but still be able to interface with that healthcare system. That's where I think that gap has to be filled.

And it is fair to say that  most of your consulting work today is focused on helping companies with these types of products to fill in these gaps?

Yes, it is, I can't say specifically, but I do is help companies look for new opportunities in areas where they can leverage their current R&D, expertise and knowledge to get into new markets by examining external factors that they maybe hadn't previously taken into account. From that perspective, yes, we help large consumer electronics companies, system providers, network service providers. Look at both Sprint and Verizon, they have made general forecasts that they think their raw subscriber rates, their wireless penetration rates are going to go up into the multiple 100 percent levels. That doesn't happen by selling mobile phones. You can get up to maybe 130 percent selling mobile phones, but to get higher than that you have to start putting SIM cards in other devices so that they can talk to networks. There are a lot of different examples of what those devices may be, but Amazon's Kindle is a good example of it -- that device runs over Sprint's network so you can read books. There might be other devices like blood pressure cuff or heart monitor that has a SIM card in it that can call back over, say, Verizon's network to let my local clinic know how I am doing. Helping those kind of companies who have been in other markets see this opportunity. I typically work with the top 20 or 30 consumer electronic companies worldwide.

You had mentioned a few products, like Philips' HearStart Home Defibrillator AED as an example of a home health tool that is filling in those gaps, but are there any products in the wireless health space right now that you can point to, too?

The Intel Health Guide is an interesting example of something you would have seen in a doctor's office a few years ago, but now it can be placed in someone's home. It can be managed by the consumer. Devices like Philip's AED is another. We are right on the edge of the types of products I am talking about, I think they are already in development.

Take a glucose monitor and maybe even a glucose pump and maybe some elements from an MP3 player and putting a 3G radio in it. Now you have a device that includes healthcare, media and wireless communication. It's probably going to look a little more like an iPod and a little less like a medical device. You can start to see the early elements of that in the pieces some companies are starting to put together. Even just the industrial design can tell you a lot. OneTouch monitors for glucose are a lot sexier now, if you can say that about a medical device. They are sleeker. They look more like media technology. They look more like our mobile phones than something in a doctor's office and that's because they are trying to reach out to the consumers' expectations but also trying to tap into that look and feel of other things already in that consumer's home. It then adds to that comfort level for embedding these devices into other ones over time.

How do you see distribution playing out? Where will we find wireless health devices? CVS and Walgreens?

I think it's going to be a mixture of distribution channels. Part of the issue is that everyone is in everyone else's business now. CVS and Walgreens are in retail. Target has a pharmacy. It's going to be mass-market retail in general. We are talking about devices that can talk to the network so probably even a Best Buy or companies, like CostCo, that are already selling mobile phone subscriptions would sell [wireless health services and devices]. Anyone who is familiar with that business of selling something connected and that already has those relationships with operators are likely candidates. You might see [wireless health products] in a T-Mobile store or an O2 store in Britain. We are already seeing things like Philips AED sold at Target. That's one of the most complex consumer-facing medical device out there, and it's being sold through one of the biggest mass market channels.

Another factor in all of this, that is really important, is that the healthcare system in most parts of the U.S. as well as other parts of the world is already so overwhelmed that it can't service demand. Whether that's the economics being distorted or because we have tens of millions of uninsured people. More and more of this care is being moved down stream, first out to these retail-care environments like store-front clinics and now out to use as individual consumers. That being the case, it's going to push the products and services more and more downstream to mass market retail environments to find us where we are.

You mentioned liability issues before: Are carriers more comfortable now than they were four or five years ago about providing carriage for these wireless health devices given those liability issues?

I think carriers are more comfortable but that's not to imply that the importance of these liability issues have diminished at all. It's more about finding ways to manage them. Already, operators carry emergency services communications and I think they will find ways to solve that problem. The opportunity is too great. If you look five or ten years down the road and start to talk about a SIM card in every device, in every medical device, then yes, they are going to want that opportunity. They will want to take advantage of it. They will find ways to work around it, deal with it or to maybe develop multiple tiers of service. It's probably no different from non-medical wireless services that have mission critical status. Emergency services for police are a great example. Finding ways to meet the various reliability needs of different markets is something they have done in the past. I am sure people like IBM and Qualcomm are on that right now. We often tend to forget as we are looking at consumer markets how much is happening in non-consumer markets that is much more heavy-duty and reliable.

[One mitigating factor that, which may help carriers reduce liability is that] companies will look for opportunities to move up the value chain. Why just be a single developer of a wireless health device if you can leverage that specialization? We are seeing this in the consumer electronics space with Qualcomm, Intel, NVIDIA and Freescale already. They are all trying to climb up the value chain in terms of where they play in devices. I don't think that will stop.

Bottomline, the market opportunity is real enough that it is driving serious consideration and development as opposed to it being window dressing. Still, there is an enormous amount of work to do to get there.

For more from Scott Smith, check out the Changeist site here.