With the release of the Apple Watch, the announced IPO for FitBit, and the introduction of lots of other wearables, there’s an increasing focus on this market and how large the opportunity really is. I wrote about my firm’s view on the overall smart wearables market a little over a week ago, but I continue to do research in the area and want to dive further into a specific application of wearables: health care.
Most people who talk about wearables focus on fitness and health care as the best near-term applications for these devices. In the process, they tend to lump fitness and health care together. While they’re certainly related, I actually believe they are two distinct areas. Fitness is specifically targeted at individuals who are active and want to track their performance. These are the early adopters of wearable devices and tend to be the most enthusiastic about them. However, they’re a relatively small group.
Health care, on the other hand, has a potential market of everyone. With wearables, health care applications involve medical organizations collecting and using data about individuals’ vital signs or other aspects of their overall health. The health care business is orders of magnitude larger than a business built around fitness enthusiasts, so this is where the biggest potential for wearables lies. At the same time, it’s a significantly tougher business to get into and it’s likely going to take a much longer time for wearable companies to have a serious impact.
Not only do they have to deal with the hassles of getting FDA approved here in the US (and jump through similar hoops for governmental medical organizations around the world), but they also have to get involved with the health insurance business, which I’m not sure I’d wish upon my worst enemy.
Despite these challenges, I’m pleased to report there is some initial interest from health care professionals. TECHnalysis Research is in the process of completing a survey of over 300 US-based health care professionals about IT trends in health care and a small portion of the survey includes questions about their potential usage of wearables.
According to the results, about 6% of health care organizations are actively leveraging wearable devices now, 12% are in the testing process, and about half are considering them for use at some point in the future. In all, about 2/3 of health care respondents said they are actively using them or giving them at least some consideration. That potentially represents a very solid opportunity for wearable makers.[pullquote]About 6% of health care organizations are actively leveraging wearable devices now, 12% are in the testing process, and about half are considering them for use at some point in the future.”[/pullquote]
Of course, the devil is in the details. When this 2/3 majority was asked about the specific type of wearables they were considering, half of the responses were for medically-approved (that is, FDA-approved) medical devices. About 18% said they would consider using the data from fitness bands, such as FitBit, versus 17% for smartwatches, such as the Apple Watch, and about 10% from fitness apps such as RunKeeper, which works with a variety of different wearables. These lower numbers are likely due to concerns with the accuracy of the sensors in consumer-grade wearables, particularly against true medical devices.
Another question asked about the kind of benefits these health care organizations would offer patients who provided data from these wearable devices. All told, over 70% said they would provide some kind of benefit, with 27% saying they would consider offering 3rd-party coupons or other similar benefits, 23% saying they were considering offering reduced fees for their services, another 20% noting they were considering reduced insurance premiums.
The bottom line is health care organizations have at least started taking a serious look at integrating wearables into their practices and procedures, and they’re looking at offering reasonably compelling motivations for doing so. It’s still early days, but that should give wearable vendors cause for hope.