As digital health care technology becomes more advanced, there’s a growing delineation between clinical-focused technology and devices that focus on health and wellness, Vaughn Kauffman told Investment Advisor in April. Kauffman is a principal in PwC’s Health Industries Advisory Services.
That’s partly down to who’s buying the devices. In the health and wellness area, it’s usually consumers themselves. “It’s a discretionary spend, whereas when it’s a more focused, clinical device, the target is the actual doctor,” Kauffman said. He added that “we’re seeing both ends of that spectrum starting to converge, which really creates some interesting business models,” and suggested that “the question for those [health and wellness] companies is how does that data help influence the decisions around taking care of people?”
Ultimately, “the center of gravity in health care is starting to shift to the consumer,” Kauffman said. He noted that the shift started with health savings accounts and high-deductible health plans; “as we see deductibles increase, the consumer is becoming a larger catered group. What that brings is a louder voice in the market around needing to provide more convenient, cost-effective options.”
Consumer-focused health care technology is becoming more cost effective, he said, in part due to startups in Silicon Valley. PwC found that by mid-2014, digital health care startups had raised $2.3 billion, more than they raised for all of 2013. More than $200 million of that went to devices like wearables.
But wearables are more than just FitBits and Jawbones. Kaufmann described tools that can help monitor patients after they’re discharged from the hospital or help consumers determine if they need a visit to the doctor in the first place. Some of those startups in Silicon Valley have created “disposable patches that track all major vitals that any doctor is concerned about in any sort of prognosis: temperature, blood pressure, EKG. Those metrics all then hook wirelessly to the phone, then go into the cloud.”
Do-it-yourself strep or ear infection tests help consumers decide if they need a doctor or if they just need rest and fluids.
“What’s interesting about that is anywhere between 15 million and 30 million visits a year can be attributed to ear infection, or at least someone thinking they might have an ear infection,” Kauffman said. “If I can use this technology as my initial triage, think of the cost avoidance there of maybe not having to go in at all if someone can look at a high-definition image remotely.”
Kauffman compared these consumer-focused health care technologies to the way Internet banking allowed consumers to “become their own teller for certain types of transactions.” He predicts that in the future, hospitals will still be used for certain procedures, but that consumers will be more willing “to go to a retail clinic that’s more convenient and lower cost.”