Healthcare News & Insights

Wearable devices are soon-to-be massive economic drivers

gettyimages-527050085Wearable devices have made a significant impact on health care for both patients and providers, and it’s clear this influence will grow as the technology continues to evolve. In this guest post, Nathan Bleigh, chief technology officer of an outcomes data collection company, takes a look at what the future impact of wearable devices looks like, and how they’ll drive the changing economics of health care

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When you think of wearable devices, you might think of things like Fitbit and the Apple Watch, which both count the steps you take and calories you burn throughout the day. But wearable technology is already evolving into things like implantable software that helps prevent seizures and small, ingestible computers that automatically collect and send data to doctors.

The emergence of consumer sensors in health care is a big win in terms of minimizing the burden of data collection. The fewer questions we have to ask, the better. Consumer sensors and self-assessments are just the start of many combinable technologies that will reduce the time required to collect meaningful outcomes data.

Passive data collection also improves the doctor-patient experience, leading to more informed discussions between physicians and those whom they serve. Imagine a conversation about a measured lack of sleep or persistently low walking distance enabled by smart, meaningful reports – instead of potentially faulty anecdotal accounts.

Wearables are transforming healthcare economics

There are two types of wearable devices: the ones physicians prescribe to track specific data and the ones consumers buy to track general information like sleep quality, heart rate and level of activity. Both types are highly popular, and in 2013 the market for all wearable devices was around $5 billion. By 2021, the market is predicted to exceed $17 billion.

As the market grows, wearable technology will have an increasingly large impact on health care in two main arenas:

  • Transition of payment models: The transition to value-based payment models will need to rely on a combination of objective measurements and subjective interpretation. The shortest path to collecting objective data is passive collection using consumer wearable devices.
  • Commoditization of health assessments: Prescribed wearables will also help make health assessments – like blood pressure measurement and blood panel screening – a competitive, direct-to-patient market. The influx of commoditized data will greatly aid clinical decision-making and set us on a path to a new era in health care – one when evidence-based, personalized medicine is standard.

As the healthcare industry shifts toward value-based payments over fee-for-service models, providers need to collect as much patient-reported data as possible to keep up. Wearables collect this data passively, making it easier to meet Merit-Based Incentive Payment System and Medicare Access and CHIP Reauthorization Act guidelines for patient-reported outcome measures. As the system is standardized, private payers will follow suit, creating a more direct connection between outcomes and payment.

Wearables will help cut hospital costs

Having a comprehensive source of objective patient data can help hospitals cut costs and improve their quality of care in a number of ways. To make use of this data, however, providers need to have a sound strategy for optimizing its collection and utilization.

Three ways hospitals can cut costs using wearable technology include:

  1. Have a solid system to collect and report data with minimal staff resources: Passive data collection and reporting can reduce costs only if a solid infrastructure is powering it. Web services can help automate the process to reduce the demand on staff resources.
  1. Integrate warnings to prevent readmissions and failed treatments: Wearables are already being used to prevent readmissions by improving post-operative care management. Passive data collection enables doctors to focus on patients that have warning signs of readmission, such as symptoms of treatment failure, to make post-operative care management more efficient.
  1. Combine objective and subjective data to negotiate payer contracts: When negotiating healthcare payer contracts, it helps for providers to have data that exhibits how efficiently they utilize their resources. Objective data reports from wearable devices and a solid infrastructure for utilizing them can highlight a provider’s ability to predict outcomes and costs.

The more patients engage with prescribed and consumer-available wearable devices, the more informed and involved they become in their own health care. This will not only improve physician and patient relationships, but also create a new economic model to match the changing landscape of value-based health care.

Nathan Bleigh is the chief technology officer at OBERD, an outcomes data collection company. He finds passion in the intersection of computer graphics networking technology, and building tools to connect the now disparate worlds of clinical practice and research.

 

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