Understanding the Telehealth Technology Value Chain

CATALYST

The rising cost of care and the availability of cheaper technology are driving interest in providing care at a distance.

SUMMARY

With the expanding breadth of digital communications and the increasing capacity and decreasing costs of complex devices, it has become possible to communicate medical data in new and exciting ways. This report illustrates the use of telehealth to solve the pressing problems of healthcare systems in Europe and North America:

• Telehealth is being driven by the need to deal with chronic conditions
• The telehealth technology structure requires the circulation of information
• The technology value chain is evolving rapidly
• Homecare telehealth will show rapid growth.

METHODOLOGY

eHealth Consumer Insight : Survey of consumers’ attitudes to healthcare technology in the US, Western Europe, and Japan
eHealth Physician Insight : Survey of physician attitudes to healthcare technology in the US, Western Europe, and Japan
Healthcare Primary : Interviews with healthcare organizations in the US and the UK
Secondary Research : Industry associations, government data, international organizations, existing Datamonitor research

ANALYSIS

Telehealth is being driven by the need to deal with chronic conditions

With the expanding amplitude of digital communications and the increasing capacity and decreasing costs of complex devices, it has become possible to communicate medical data in new and exciting ways. Although in the past it has been possible to reach out to patients over the telephone or through other basic channels, new monitoring and networking technologies now enable richer and more sophisticated remote healthcare.

At the same time healthcare systems across Europe and North America are facing increasing pressure on costs and an expanding proportion of the population living with chronic conditions. Extending the reach of healthcare beyond the hospital by using telehealth offers ways to help improve the quality of care while reducing costs. By moving the emphasis away from managing serious incidents to monitoring conditions effectively, telehealth can help to reduce both the number of serious episodes and costs.

For the purposes of this report, telehealth is defined as the use of a digital network to provide automated monitoring and treatment delivery to a patient who is at a different physical location to the medical expert providing treatment.

What are the applications of telehealth technology?

The applications of telehealth can be categorized in four main ways:

Nature of the condition – the medical problem that the patient has might cover a wide variety of conditions but these can be classified into two broad types:

• chronic or long-term
• acute or short-term.

Patient’s location – the traditional use of telehealth has been to offer treatment to those in geographically remote locations, be that a rural community or an Antarctic science station. However, telehealth is now being used much closer to home, in some cases literally. In decreasing order of remoteness and increasing care intensity telehealth might be used in the following types of location:

• Remote places – where physicians cannot practically go
• Home – the patient’s own residence where there is no permanent medical presence
• Long-term care or clinic – where there will be some medically trained staff
• Hospital – where there is a constant medical presence but the relevant expert may be in a different part of the hospital or in another location altogether

• Telehealth user at the patient end – in part this will depend on where the patient is, as suggested in the previous bullet. This is crucial in determining the type of technology being used. Users will fall into two groups:
  • Clinical – those with some medical training, who might be anything from a nursing  auxiliary to a doctor;
  • Patient – where the patient is making use of the device in question.

• The monitoring or treatment provided by the telehealth system – at present in most cases the telehealth system will primarily be used to monitor the condition only. The changes in treatment will usually not be automated and will come in the form of advice to the patient or a direct intervention by medical personnel.

up a quarter of the budget for payers such as Medicare and the most expensive 5% can make up more than half. Analysis by these healthcare payers also suggests that most of this expense is caused by admission to hospital. If the number of admissions can be reduced by intervening earlier then costs will potentially drop dramatically and, more importantly, the patients will feel better.

Figure 1 illustrates the first three factors mentioned above and the how the actual applications of telehealth might fit into this matrix. The conditions that will attract the most investment will be those that can be monitored effectively in the home. To justify the installation cost most of these will be chronic conditions.

• Congestive Heart Failure (CHF) – this condition would typically be monitored using a blood pressure cuff and weight scale. This configuration could be used to monitor these patients in any of the environments but has its most obvious applications in homecare. About 3.6% of Americans currently suffer from CHF and even more from other forms of coronary heart disease (CHD), making this a potentially huge market. More details can be found in “Pipeline Insight: Chronic and Acute Heart Failure” (DMHC2085)
• Chronic Obstructive Pulmonary Disease (COPD) – this could be monitored with a blood pressure monitor, a weight scale, a pulse oximeter and a spirometer. Again as a chronic condition it is one that is generally monitored from the patient’s home. The condition affects between 4 and 5% of the population in developed countries. More details can be found in “Pipeline Insight: Asthma/COPD/Allergic Rhinitis” (DMHC2068)
• Diabetes – could be monitored with a blood pressure monitor, a weight scale and a blood glucose meter. This is a condition that affects about 4 to 6% of the population in the West. More details can be found in “Pipeline Insight: Non-insulin Antidiabetics” (DMHC2000)

As systems develop it is possible to foresee the possibility of more portable telehealth products that might be used to monitor more short-term conditions. However, acute conditions are of their nature likely to involve immediate medical intervention and hence to put the patient in hospital in any case. This does not mean that there is no role for telehealth in this context although it will fulfill a different set of functions.

• Intensive Care Unit – Here telehealth monitoring would be used mainly to supplement on-site monitoring. The system would gather very detailed data and then pass it on to an ICU consultant who is able to monitor the condition of multiple patients from a different location. This type of solution has attracted interest in countries such as the US, where it has not proved possible to have this type of doctor on site in every ICU at all times
• Post-operative care – This refers to those post-operative patients well enough not to be subjected to the rigorous monitoring they would get in ICU. Hence it is easy to see an application for automated monitoring that would alert staff to potential problems. This might also be a situation where some home monitoring could be desirable, provided that units of sufficient simplicity and portability were available and that the cost and lifestyle benefits could justify the expense
• Diagnosis – Initial diagnosis is obviously not a condition as such, but can be considered a short-term intervention. This is one of the one of the main applications of remote health technologies in distant places. Careful readings are taken from a patient locally and the details are uploaded to a doctor who can make a diagnosis

Report Published: March 2006