Business Insider reports that the U.S. spends 18% of its GDP on healthcare each year, which is far higher than healthcare spend for other leading global markets. However, this number is only expected to rise in the coming years. According to a recent report from Grand View Research, the global IoT in healthcare market is expected to reach nearly $410 billion by 2022. This estimate reflects substantial growth from the global IoT in healthcare market in 2014 valued at just $58.4 billion. The Grand View study attributes this major growth to the following factors:
- Increasing occurrence of various chronic diseases
- Expanding global geriatric population
- Growing demand for short-term and long-term healthcare services
Insurance providers, employers and individuals who pay for their own medical costs should all be interested in the financial impacts of the IoT applications in healthcare. Here we will take a look at the revenue potential of IoT-enabled devices, as forecasted by industry experts
The ever-growing popularity of IoT-connected wearable medical devices
How can insurers, providers and other key players cash in on their slice of the digital healthcare pie? One key way is through the use of remote monitoring via smart devices and apps for three major chronic conditions. In 2015, wearable medical devices held over 60% of the market share because of their ease of use, high global use of smartphones, growing awareness about personal fitness, preventative medicine and early diagnostics. Grand View estimates that the popularity of wearable medical devices will only continue to grow in the next five years. That study also estimates that implantable medical devices will see growth of 30% through 2022.
Statista has forecasted revenue for remote monitoring using smart devices and apps for three key chronic conditions – diabetes, hypertension and heart failure – into 2020.
Revenue potential for managing heart failure
The CDC reports that roughly 5.7 million adults in the U.S. have heart failure. The cost of healthcare services, treatment, medications and missed days of work related to heart failure add up to an estimated $30.7 billion annually. Remote monitoring using IoT-connected devices and mobile apps is a way to potentially reduce healthcare costs associated with this condition, while also creating a new revenue stream for the healthcare IT industry.
In 2014, mobile apps related to heart failure generated $3.7 million in the U.S. This same year, smart devices designed to manage heart failure generated $666.8 million. By the year 2020, mobile apps related to this condition are estimated to generate $28.3 million, while smart devices may generate up to $2.49 billion (Source: Statista Market Forecast – Heart Failure)
Revenue potential for managing hypertension
Approximately 75 million adults in the U.S. have hypertension, or 1 in 3 adults (Source: CDC). However, only about half (54%) of these people have their hypertension under control. The CDC reports that annual costs related to hypertension in the U.S. are $48.6 billion. Using mobile apps and smart devices connected over the IoT to manage this chronic condition is a potential way to reduce associated costs, while creating a new revenue stream for players in digital health.
In 2014, mobile apps related to hypertension generated $4.3 million in the U.S. This same year, smart devices designed to manage hypertension generated $25.9 million. By the year 2020, mobile apps related to this condition are estimated to generate $94.6 million, while smart devices may generate up to $328.2 million (Source: Statista Market Forecast – Hypertension).
Revenue potential for managing diabetes
The American Diabetes Association reports that nearly 30 million Americans have diabetes, while 86 million have pre-diabetes. $1 in every $5 health care dollars in the U.S. is spent on caring for people with diabetes or pre-diabetes, which translates to $322 billion per year. Research has shown that mobile apps connected to smart devices are an effective way for patients to work closely with their health care providers to proactively manage their chronic conditions like diabetes.
In 2014, mobile apps related to diabetes generated $56.2 million in the U.S. This same year, smart devices designed to manage diabetes generated $185.4 million. By the year 2020, mobile apps related to this condition are estimated to generate $223.4 million, while smart devices may generate up to $961.1 million (Source: Statista Market Forecast – Diabetes).
As we’ve seen, the revenue and growth potential for managing these chronic diseases is huge. Using IoT-connected devices to manage chronic conditions like heart failure, diabetes and high blood pressure can not only help to reduce current healthcare costs for acute incidents, but also to create a new revenue stream for players in the digital health industry.
Grand View Research. Internet of Things (IoT) in Healthcare Market Analysis By Component (Medical Device, System, Software, Services), By Connectivity Technology (Wi-Fi, ZigBee, NFC, Cellular, Satellite, BLU), By Application (Telemedicine, In patient Monitoring, Clinical Operation, Connected Imaging, Medication Management), By End-Use (Hospitals, Clinics, CRO, Research, Diagnostic Laboratories) And Segment Forecasts To 2022. Accessed online.
“Heart Failure Fact Sheet.” The Centers for Disease Control and Prevention. Accessed online.
“High Blood Pressure Fact Sheet.” The Centers for Disease Control and Prevention. Accessed online.
“The Staggering Costs of Diabetes in America.” American Diabetes Association. Accessed online.
Statista Market Forecast – Diabetes. Accessed from Statista.
Statista Market Forecast – Heart Failure. Accessed from Statista.
Statista Market Failure – Hypertension. Accessed from Statista.
Stern, Corey. “Goldman Sachs says a digital healthcare revolution is coming – and it could save America $300 billion.” Business Insider. Accessed online.