The FocalPoint Group - PRWebww1.prweb.com/prfiles/2004/07/26/144274/fp_wireless_in_healthcare_brochure.pdfJul 26, 2004 · I. Healthcare As Mobile, Unobtrusive, and Painless II. Communications

Wireless in Healthcare:A Study Tracking the Use of RFID, Wireless Sensor Solutions, and Telemetry Technolo-gies by Medical Device Manufacturers and Healthcare Providers

www.thefpgroup.com

The FocalPoint GroupThe FocalPoint GroupReport

ABOUT FOCALPOINTFocalPoint is the premier research and consulting fi rm committed to providing market intelligence and support to the suppliers and benefi ciaries in the M2M arena. Through our objective assessment of the M2M space, we identify underlying problems and the potential solutions that will ultimately accelerate the rate of adoption. Additionally, we work with experts, technology enablers, incorporators, end users, and the media to create an informed and active community of interest.

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WIRELESS IN HEALTHCARE

© 2004, The FocalPoint Group, LLCwww.thefpgroup.com

EXECUTIVE SUMMARY & KEY FINDINGS ................................................................................. 6

CHAPTER ONE: REPORT OVERVIEW ......................................................................................... 8I. Purpose & ObjectivesII. MethodologyIII. Report OutlineIV. Target Audiences for the Report

CHAPTER TWO: STATE OF HEALTHCARE IN THE U.S. ......................................................... 11I. Growing CostsII. The Emergence of Aging SocietiesIII. Chronic DiseasesIV. Staffing ShortagesV. Quality of Care Indicators

CHAPTER THREE: EMERGENCE OF WIRELESS TECHNOLOGIES ................................... 16I. Healthcare As Mobile, Unobtrusive, and PainlessII. Communications Technology as an Enabler for Fundamental ChangeIII. Key Wireless Technologies

1. WPANs & WLANsa) Bluetoothb) 802.11/Wi-Fic) UWB (Ultra Wide Band)d) ZigBee and 802.15.4e) RFID

2. Wireless Wide Area Networksa) Packet-Based Cellularb) Satellite

IV. People-to-Machine and Machine-to-Machine Networking

CHAPTER FOUR: WIRELESS APPLICATIONS & IMPLEMENTATIONS ............................. 23I. Asset TrackingII. Remote Patient Monitoring & TelecardiologyIII. Staff Mobility & AlertsIV. New Equipment FunctionalityV. Emergency Response & TriageVI. Environmental Monitoring & Bio-Terrorism

Table Of Contents

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CHAPTER FIVE: CHALLENGES FOR WIRELESS IN HEALTHCARE ................................... 36I. Culture and InstitutionsII. A Reliable Communications SpectrumIII. Power & Battery LifeIV. Security & PrivacyV. CostVI. LegislationVII. Set-up & Management

CHAPTER SIX: MEDICAL DEVICE MANUFACTURERS & ADOPTION FACTORS ............ 40I. The Medical Device Market II. Key Device Suppliers III. Current activity levels for wireless adoption

a. Companies interviewed and surveyedb. Activity and interest levelsc. Drivers for adoption d. Barriers for adoption

IV. Future Adoption By Manufacturers

CHAPTER SEVEN: PROJECTING WIRELESS ADOPTION IN HEALTHCARE .................... 49

I. Overall Growth EnvironmentII. Wireless Growth ScenariosIII. Projections for Wireless Solutions

CHAPTER EIGHT: RECOMMENDATIONS & CONCLUSIONS ................................................ 62

I. RecommendationsII. Conclusion

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APPENDIX: ............................................................................................................................................. 65I. Medical Device Manufacturer Profiles a. Baxter International Inc. b. Boston Scientific Corp. c. GE Medical Systems d. Philips Medical Systems e. Medtronic Inc. f. Siemens Medical g. Tyco Healthcare Group h. Beckman Coulter, Inc. i. Abbot Laboratories j. Johnson & Johnson, Inc. k. Guidant CorporationII. Research Survey ToolIII. Additional Market Sizing NumbersIV. Other Medical Resources

CASE PROFILES: .................................................................................................................................... 301) Digital Angel Companies mentioned include Applied Digital Solutions

2) CardioNet & CardioMEMS Companies mentioned include Guidant Corporation, QUALCOMM, CardioMEMS, and GE

Medical Systems

3) Sutter & Maimonides Hospital Optimization Companies mentioned include VitalCom

4) Emergency Response & Care Companies mentioned include Raytheon Co., Nextel Communications, Inc., AirClic, Inc. and

Crossbow Technology, Inc.

5) RFID Asset Tagging Companies mentioned include Lawson Software, Tren Star, Surgical Express, Inc.

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Table Of Exhibits1 US Capital Expenditures By Sector (2002 to 2001 Comparison)2 US Populations Age Distribution (1900 to 1990 Comparison)3 Average Growth of Total and Older Population (North & South America)4 Shift in Causes of Death in Developed Nations (Korea)5 Technology’s Impact on Mitigating Workforce Shortages6 Staffing Areas Most Impacted by Technology7 Data Capacity for 802.11 Standards8 Comparison of ZigBee to Bluetooth9 RFID Tags Continue to Shrink10 FocalPoint’s M2M Infrastructure Map11 Wireless Applications Vary in Complexity & Criticality12 Real-Time Point of care Data is Revolutionizing Healthcare13 End-to-End Medical Data Network14 Progression of Wireless Applications in Healthcare15 Global Medical Device Equipment Market16 Industry Metrics17 Companies Interviewed for the Study18 Survey Feedback on Communications Protocol Preference19 Drivers of Communications Protocol Selection20 Drivers of Device Connectivity Adoption21 Barriers of Device Connectivity Adoption22 Market Shift Toward Integrated Solutions23 Ecosystem of the Connected Healthcare Industry24 Wireless Technology Market Sizes ($ millions)25 Wireless Technology Market Size by Service Type ($ million)26 Year/Year Growth Rate of Technology Markets27 Growth of RFID System & Solution Sales (chart & table)28 Growth of Wi-Fi System & Solution Sales (chart & table)29 Growth of ZigBee System & Solution Sales (chart & table)30 Growth of Packet Based Cellular System & Solution Sales (chart & table)31 Growth of Bluetooth System & Solution Sales (chart & table)32 Growth of UWB System & Solution Sales (chart & table)33 Growth of Satellite System & Solution Sales (chart & table) (Exhibits 27-33 include a chart and table with forecasts for enablement, communications,

system integration, and monitoring, control, and optimization (MCO) revenues)

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Adoption of wireless in healthcare is imminent

The US spends $1.5 Trillion a year on Healthcare

I. Executive Summary & Key Findings

The American Healthcare system is on the verge of a crisis, with financial stresses forcing both caregivers and patients to demand change. While advanced medications and other sophisticated treatments are more effective than ever, they also come with sky-high price tags. Compounding the situation, these same remedies are also transforming once fatal diseases into long-term conditions, which are managed by high-priced therapies. Given the growing population and longer lives of the elderly, new approaches to patient care must be created.

Fortunately, technology is converging at this threshold to offer feasible solutions. RFID tags are enabling better asset tracking. WiFi and packet radio are allowing for mobility of patients and caregivers. Sensor networks can be used to detect bio-terrorism and support emergency responders. By adopting and integrating new technologies, decision-makers in the Healthcare industry can greatly improve efficiency and profitability - all while enhancing and perfecting patient care.

However, much still needs to be done. The $1.5 Trillion Healthcare industry currently spends only 5 percent on information technology, and even less on wireless technologies. Concerns for reliability, signal interference, battery life, cost, security, and FDA approvals have kept industry leaders from deploying wireless more visibly. The next decade will place increasing burdens on healthcare providers and patients, and so it will be critical for the industry to aggressively integrate emerging networking technologies that improve productivity and quality of care.

To aid executives in improving the state of healthcare in this country, we created this study which investigates the levels and type of activity occurring with wireless data technology in the industry today. We identify emerging solutions, existing implementations, drivers and challenges, attitudes and activity, and growth rates. This report attempts to provide insight into the way in which wireless solutions are likely to be utilized and adopted over the next 2-6 years.

A number of key conclusions emerged that will impact the ways in which executives should be responding:

• Medical device manufacturers and hospitals have been slow to recognize the benefits of wireless data technologies – wireless will not be successful without greater education.

• WiFi and Bluetooth will introduce the industry to wireless applications, but other technologies will gain in importance down the road.

• The “Baby Boomers” demographic will demand significant and unseen adoption of wireless technologies, particularly telemedicine and remote patient monitoring, with a shift in focus from reactive to proactive care.

Executive Summary

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The Impact of Wireless will be Significant

• Wireless data applications will not be utilized everywhere. Instead, wireless applications will be used in a complementary manner to legacy and wire-based systems.

• Existing implementations have emerged across diverse environments and are already demonstrating investment payback and improved service quality.

• The overall U.S. wireless data networking and related servicing opportunity in the Healthcare sector will grow to over $7 billion by 2010, with the potential to be much higher given proper development.

As the players in the healthcare industry adopt wireless data technologies in greater degrees, the impacts will be significant…

1. Medical device manufacturers can begin to reconfigure their products and their business models to reflect mobility, continuous monitoring and lifecycle management, quality assurances and service level agreements, pay-per-use charging, and theft/tamper prevention.

2. Healthcare providers will be able to better allocate resources, prioritize and build consistency in treatments, and offer more complete and direct care to patients.

3. Patients will be able to gain better and real-time information and care, and begin to self-treat and improve their overall health condition outside of the confines of a hospital or doctor’s office.

4. Technology vendors have an opportunity to creatively and effectively enable new medical applications that will improve worker productivity levels, health conditions, and overall costs for medical treatments.

With the degree of benefits that can be derived from the application of wireless technologies in the Healthcare industry, we believe this research should provide timely and critical information to the innovators and leaders that will propel the industry forward.

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Increasing Demands are Colliding with Dwindling Resources

Wireless will Enable Major Structural Change

I. Purpose & Objectives

With increasing demands colliding with dwindling resources, the healthcare industry is now confronting the biggest dilemma ever. Industry problem solvers will undoubtedly look toward the newest technologies, including wireless, to address the issues. We created this report to provide an in-depth look at how wireless technologies are currently being used in healthcare and medical devices and the potential for the future.

Also recognizing the need for taking advantage of new technologies to improve healthcare was the National Committee on Vital and Health Statistics. On November 15, 2001, they issued the following challenge:

We as a Nation have a timely opportunity and an urgent need to build a 21st-century health support system – a comprehensive, knowledge-based system capable of providing information to all who need it to make sound decisions about health. Such a system can help realize the public interest related to disease prevention, health promotion, and population health.

While the adoption and integration of wireless technologies poses a significant challenge, the effort is worthwhile with hospitals and Medicare practically running on empty. Taxing the system is the onslaught of retiring baby boomers, who will greatly increase the demand for high-quality healthcare. But, with budget-trimming cutbacks in hospital staff, overworked clinicians are making far too many mistakes in caring for and treating patients. Unfortunately, health insurance companies continue to decrease reimbursement amounts, leaving providers to deal with the loss in revenue and/or to pass the costs on to patients.

It is wireless technologies, in part, that will provide solutions to cutting costs, improving efficiency and maximizing the use of limited funds, while also enhancing patient care. At the same time, these solutions will improve communication, which could facilitate the integration of lifesaving new research and allow for the detection, preparation and reaction to bioterrorism. Already, new wireless data technologies and applications are making significant impacts at forward-thinking institutions and companies. With more signing on, wireless technologies will enable major structural changes in the U.S. healthcare industry. Remote telemedicine, product/supplies tracking, and equipment monitoring are driving efficiencies that could not have come at a better time. These technologies are emerging to provide ordinary Americans the means to receive the expert advice and guidance necessary to achieve affordable, high-quality care for this next century—and to provide clinicians the wherewithal to provide it.

In this report, we examine the latest advances, attitudes, and impacts that new wireless technologies will have in the healthcare arena. From this work, we hope that technology vendors, medical device manufacturers, investors, medical professionals, and hospital administrators will gain a better sense of the acceptance of wireless technology and how it will undoubtedly be used to change the healthcare industry.

1. Report Overview

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Our Research Analyzes the Acceptance of Wireless Technologies

II. Methodology

Our research analyzes the acceptance of wireless data technologies including cellular, RFID, WiFi and others in the Healthcare arena. We focused specific attention on discovering how equipment manufacturers are incorporating wireless technologies into their products. We also wanted to examine how wireless networking ranks among existing priorities and the likelihood of adoption and deployment, particularly during the next two to three years. Research and analysis took place primarily in the months from March to June of 2004.

We gathered key information such as the overall market size and growth, trends and forces, products, and major vendors by culling information from market analyst reports, 10-Ks, journals, articles, and various trade associations.

We then generated a list of medical companies and identified companies relevant to our research. Companies of interest included not only the major players, but also smaller manufacturing companies and those developing and engineering new devices. Once we established a list of relevant companies, we identified key people who were most appropriate to survey.

During the primary research phase of the project, we utilized a telephone questionnaire as well as an on-line survey (see Appendix for samples). The contact list consisted of executives with titles including Director of Research & Development, Vice Presidents of Engineering, as well as Product Managers.

III. Report Outline

1) “Chapter One: Report Overview” provides the objectives, methodology, outline, and intended audience background.

2) “Chapter Two: The State of Healthcare in the United States” deals with the current state of healthcare, detailing overall expenditures, changing demographics and disease types, labor shifts and shortages, and quality of care issues.

3) “Chapter Three: Emergence of Wireless Technologies” delves into the wireless technologies that will be utilized to face the issues of a growing Healthcare system.

4) “Chapter Four: Wireless Applications and Implementations” outlines areas of wireless adoption and activity and provides insight into the impacts and benefits of wireless technologies.

5) “Chapter Five: Challenges for Wireless in Healthcare” discusses the challenges and obstacles of implementing wireless technologies.

6) “Chapter Six: Medical Device Manufacturers & Adoption Factors” is a review of the medical device manufacturers, their financial condition, and their likelihood to implement wireless technologies in the near future.

7) “Chapter Seven: Projecting Wireless Adoption in Healthcare” provides a perspective of how wireless will be adopted over the longer term, including projections of various types of revenue streams that will result from using wireless technologies.

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8) “Chapter Eight: Recommendations & Conclusions” details steps that device manufacturers, care providers, and wireless vendors can take to compete in a wireless networked environment.

9) “Appendices” include company profiles, questionnaires, and additional information.

IV. Target Audiences for the Report

The audiences for this report include the following:

Healthcare Administrators & ProfessionalsThis report will provide the reader with key information about the latest activities in wireless adoption within the Healthcare industry. From this report, the reader will gain an understanding of emerging trends, successful implementations, expected activity from others, challenges of adopting and integrating wireless solutions, and insight into how to improve quality of care and reduce costs.

Medical Device ManufacturersFor companies providing products and services to the Healthcare industry, we will show that there is a major opportunity to take advantage of wireless technologies for manufacturing, shipping, installing, tracking/operating, maintaining, and servicing products. This report will provide insight into how and when to invest, the applications to develop, and the overall opportunity for your business.

Technology Vendors and Systems IntegratorsCompanies providing the nuts and bolts infrastructure to enable an improved healthcare system have a direct interest in knowing how rapidly this market is going to adopt wireless technologies. This report provides an in-depth look at the ways in which wireless technologies are improving the quality of care in the industry and in reducing costs, which help to create the ROI propositions necessary to grow your business.

Analysts and InvestorsGaining a sense of the challenges and opportunities surrounding the Healthcare industry has never been more important. With changes in legislation, culture, operating practices, and technologies, the ability to understand the potential for growth and profitability in this industry has never been so challenging. This report will provide direct insight and commentary from industry leaders poised to change the way healthcare is provided in this country. Not only will you gain a sense of the activities in the arena, but also see the potential growth and adoption of wireless (and the resulting changes in efficiencies and business models).

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EXHIBIT 24

In addition, we identified how the various revenue opportunities for vendors would break out. We created a graph that shows the total dollar value of wireless in the healthcare sector, and compared specific revenue streams as a percentage of the total value. The streams include four main categories: Device Enablement, Networking & Communication, System Integration, and MCO Services.

• Device Enablement includes the value of microchips, communications ports, device-level networking software, boards, additional electronic components and interfaces, and device re-design and development costs.

• Networking and communications includes the value of networking cards, radios, terminals, gateways, LANs, routers, switches, firewalls, and airtime or service contracts for wired and wireless data communications.

• System integration includes the value of the labor costs associated with designing, deploying, installing, and activating an M2M solution within an environment.

• MCO (Monitoring, Control, & Optimization) services include the value of operating a monitoring facility (NOC), server farms, and alert team. Also includes the exception reporting software and activation support systems.

Each of these revenue streams will grow over time, but some will become commoditized. For instance, device enablement will become cheaper with each additional installation (and because of economies of scale). Networking and communications revenues will also become cheaper over time, due to the low marginal costs of adding additional wireless services once a network has been installed. Systems integration costs will continue to increase as environments become more complex and require greater integration with existing or supplementary networks and databases. MCO services will remain fairly constant over time, as improved tools and productivity functions cancel out increasing costs in labor. Each of these drivers has been considered in our calculations.

Wireless Technology Market Sizes ($ millions)

Source: FocalPoint Analysis

2004 2005 2006 2007 2008 2009 2010RFID 27.5 58.9 121.8 220.0 389.5 641.9 1,053.8WiFi 495.0 663.4 861.0 1,031.3 1,259.4 1,572.9 2,016.2ZigBee 8.8 23.3 63.0 159.5 287.6 475.3 772.8Packet Cell 71.5 116.3 184.8 264.0 382.2 592.9 1,004.6Bluetooth 418.0 565.8 684.6 811.3 957.3 1,102.5 1,369.9UWB 20.9 37.2 65.1 101.8 142.0 200.9 316.1Satellite 58.3 85.3 119.7 162.3 222.0 313.6 491.8Total $1,100.0 $1,550.0 $2,100.0 $2,750.0 $3,640.0 $4,900.0 $7,025.0

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2004 2005 2006 2007 2008 2009 2010

SatelliteUWBBluetoothPacket CellZigBeeWiFiRFID

- Study Sample - For full forecasts, please contact FocalPoint

Study Brochure

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EXHIBIT 25

EXHIBIT 26

IV. Technology Specific Forecasts

The explosion of wireless protocols has created an environment of cost pressures, competi-tion, and innovation that will ultimately help the healthcare environment. Many of today’s protocols are aggressively competing against one another on price, security, reliability, and ease of installation, configuration, and use. Despite the progress being made, the biggest competitors for wireless are wired solutions or simply nothing at all. Beyond that, wire-less protocols most often compete against one another on bandwidth, distance, latency, and power consumption. As the vendor ecosystems creating wireless solutions mature, the clarity and focus of individual wireless protocols will become more articulated, help-ing adopters to understand how each type of wireless technology matches with their needs rather than falling short or being overkill.

Wireless Technology Market Sizes by Service Type ($ million)


2004 2005 2006 2007 2008 2009 2010Device Enablement 454.5 595.6 746.7 900.4 1,091.9 1,339.8 1,742.2Networking & Comm 229.9 320.2 426.5 546.4 704.0 917.9 1,268.2System Integration 263.4 409.9 610.3 873.9 1,258.5 1,833.9 2,831.9MCO Services 152.2 224.3 316.4 429.2 585.6 808.4 1,182.7Total 1,100.0 1,550.0 2,100.0 2,750.0 3,640.0 4,900.0 7,025.0

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2004 2005 2006 2007 2008 2009 2010

MCO ServicesSystem IntegrationNetworking & CommDevice Enablement

2004 2005 2006 2007 2008 2009 2010RFID 144.4% 114.2% 106.8% 80.6% 77.0% 64.8% 64.2%WiFi 43.5% 34.0% 29.8% 19.8% 22.1% 24.9% 28.2%ZigBee 134.7% 164.2% 171.0% 153.2% 80.3% 65.3% 62.6%Packet Cell

73.3% 62.6% 59.0% 42.9% 44.8% 55.1% 69.4%

Bluetooth 39.3% 35.3% 21.0% 18.5% 18.0% 15.2% 24.3%UWB 85.8% 78.0% 75.0% 56.3% 39.5% 41.5% 57.4%Satellite 55.5% 46.2% 40.4% 35.5% 36.9% 41.2% 56.8%Total 46.7% 40.9% 35.5% 31.0% 32.4% 34.6% 43.4%

Year / Year Growth Rate of Technology Markets




Study Brochure

The FocalPoint Group, LLC Wireless Data in the Healthcare Arena

Order Form We want to thank you for your interest in The FocalPoint Group. By completing and returning this order form, you will have secured your interest in obtaining the research report. Upon receipt, this document will serve as your intent to receive and pay for the study, net due in 15 days from receipt of this fax. Subscriber Information (please print) Company: __________________________________

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I hereby signify interest in ordering the FocalPoint Wireless In Healthcare study. I understand that the study will cost $2,500 for an enterprise license (Corporations over 20 employees and for intranet publication) or $1950 for a single-user license. Please select which license you are ordering… Enterprise License (Corporations over 20 employees) Single-user License No portion of the study will be copied, reproduced, or distributed without the previous written consent of The FocalPoint Group.

Upon completion please fax to: (415) 520-9696 Thank you and we hope you enjoy. Best regards, John C. Williams Managing Director The FocalPoint Group, LLC [email protected] 1-415-786-3932

Documents

The FocalPoint Group - PRWebww1.prweb.com/prfiles/2004/07/26/144274/fp_wireless_in_healthcare_brochure.pdfJul 26, 2004 · I. Healthcare As Mobile, Unobtrusive, and Painless II. Communications