"Your e-business Solutions Partner"

Soaring Healthcare Spending, and the Future Role of IoT

Share

In a report published by PWC on Healthcare Cast by 2020, the authors leave no doubt: the healthcare organizations worldwide are facing some major challenges:

“Healthcare organizations and governments around the world are urgently seeking solutions to temper costs while balancing the need to provide access to safe, quality care. Yet, conventional approaches are failing, even in the most advanced nations of the world – throughout Europe, Asia, the Middle East, Australia, Canada and the United States.”

On the other hand, a “Global Top 100 Companies by market capitalizationstudy paints a gloomier picture: the industry is loosing ground globally at an alarming pace. Here is the tale told by numbers.
 

ITBLOGTABLE.png
Table: The 5 Global Top 100 companies with the largest absolute decrease in market cap, compiled from Bloomberg, and PwC data.

Three of the 5 companies observing the sharpest market cap decrease are operating in the healthcare ecosystem.

The data compiled in the table is not intended to pinpoint American Companies failure globally. As a matter of fact, 55 companies on the top-100 list are from the USA. It’s more of a Key Performance Indicator. And knowing that the Health Care industry is facing bigger challenges than the Oil & Gas industry raises quite the alarm.

From a spending perspective, the US spends 18 percent of its annual gross domestic product (GDP) on health care. In 2015, this amounted to US$3.2 trillion, which is roughly equivalent to the Germany economy. The country next in line in health spending, Sweden, invests 12% of its annual GDP — about two-thirds of what the US spends.

Obviously, Americans value well-being and are generously paying for it. But, this doesn’t mean Americans are getting any healthier. And that’s where things get complicated. American heath is, by most metrics, falling behind that of all other rich countries. These metrics, or KPIs are Child Mortality (a high 7 per 1000, 2017) and life expectancy (only 78 years, 2017). The US also faces an obesity epidemic, which costs the nation between US$147 billion and US$210 billion per year adding to the burden of chronic illnesses, such as diabetes and heart disease.

Furthermore, spending is constantly on the raise despite the industry crisis, and will continue to soar, as discussed by Carolyn Johnson.

But let’s set aside the doom and gloom and cast a beacon of hope. There is a bright side to this story, one that is brought about by technology, machine learning, and big data. And a healthier America, one that we all long for, might be around the corner. Let’s dig deeper.

1.8.18blog1.png

How big is IT related spending in Healthcare?

A health IT startup, “Cognitive Medical Systems” published a straightforward answer as to how big it the actual IT healthcare market size. Encompassing Federal, Hospitals & Large Health Systems , Payers, Clinics & Private Practices and Consumers, the estimates add up to a U$100 billion in 2017. A huge market - that didn’t even exist two decade ago, is taking shape. The stakes are very high indeed. And so is a promise coming from machines: one that is out of all Affordable Healthcare Acts reach!

The Internet of things "IoT", connecting the dots

The Internet of Things can be defined broadly as the interconnection of devices (or things) that are uniquely addressed and identified with an IP (Internet Protocol) address. With IoT, devices can be connected to the Internet, sense, gather, receive and send data and communicate with each other and applications via IP technologies, platforms and connectivity solutions.

According to Aruba Networks PR, 60 percent of healthcare organizations globally have already introduced IoT devices into their facilities. The same study finds that by 2019, 87 percent of healthcare organizations will have adopted Internet of Things technology and 76 percent believe it will transform the healthcare industry.

“The Internet of things have proven to help offset costs and improve the delivery of care”, argues Bryan Lubel, president of Integron.

IoT also holds a great potential to curb the costs and improve patient outcomes in healthcare. However, this comes with a new set of challenges. Data privacy and security continues to be an important requirement, but what many companies continue to underestimate are the challenges associated with the underlying IoT infrastructure: connectivity, device management, and device interoperability. These challenges bring additional, hidden and underestimated costs for business embarking on IoT initiatives.

So, will global healthcare spending keep on soaring for the next decade? Probably. But such spending is shifting towards a connected health system, one that allows machine wisdom and big data to weigh in, and cure the market failures.

1.8.18blog2.png

Filed under: Tagged:

Request a Consultation

Do you want more information? Fill out the form below and a member of our team will reach out to you.

 (required)
 (required)