In a 2016 survey, conducted by Heavy Reading, on communications service providers' IoT strategies, healthcare was the highest-ranked market driving IoT revenue plans over the next three years. This is interesting as the healthcare market is one the most difficult markets to enter, due to regulations and also the complexity of the ecosystem that is different in every country. Equally, according to the 2015 McKinsey Global Institute Industry Digitization Index, healthcare was one of the least digitized industries, ranking 18 out 22.
Clearly, the healthcare market is huge. In the US, it was approximately $3.5 trillion in 2015 (17% of GDP) and, across the other OECD countries, 10% of GDP or $3 trillion. The sheer scale of the numbers is staggering, but so is the fact that healthcare markets have grown faster than GDP in all these countries. With 19% of the EU and 16% of the US populations being older than 65, the rate of expensive-to-treat chronic diseases is increasing. Therefore, the probability that costs will continue to increase makes the healthcare market ripe for transformation.
The mobile and IoT opportunity
The challenge here is sizing the opportunity. Forecasts for the healthcare segment are as disparate as they are for the overall IoT market, ranging from $115 billion in 2020 to $2.5 trillion by 2025. In a PwC survey conducted for the GSMA, it estimated that the use of IoT technology could reduce healthcare costs in the EU by €99 billion ($108bn).
Mobile operators have been progressively engaging with the digital healthcare space since the turn of the millennium, with a focus on telemedicine, which Deloitte estimates is a $2.8 billion market. Many operators have dedicated business units focused on consumer wellbeing and health monitoring, and Deloitte estimates this market to be worth about $3.7 billion.
The complex healthcare ecosystem of patient, provider and payer means that it is difficult to justify the economic cost and medical value of wearables. Remote monitoring of the elderly and chronic disease management are emerging opportunities that appear to meet this cost and value criteria. Mobile operators can provide secure telco cloud-based platforms and seamless services, as well as enhanced low-power wireless connectivity, to provide new system integration and coverage options. In a recent white paper, "A New Era in Connected Healthcare," produced by Huawei X Labs and Ernst & Young, there's a study that estimates the addressable mobile operator remote monitoring market could currently be worth $18 billion, growing to over $68 billion by 2022.
New technologies and opportunities
These new capabilities could be further extended into the remote care market, which requires medical personnel to not only monitor but also consult, diagnose and treat online. This is a particularly significant opportunity for meeting the shortage of primary care doctors in rural areas and emerging markets that have poor or nonexistent healthcare infrastructures.
The introduction of remote care will require the current laws and regulations of many countries to be adapted and changed, to allow this type of treatment and permit secure sharing of electronic health records. The opportunity for mobile operators to provide a secure cloud environment and network for medical records and patient identity management, possibly using blockchain technology, is an area that holds huge potential.
Looking further to the future, remote care could be an ideal application for 5G networks using end-to-end slicing, cloud, SDN and NFV technologies to deliver remote robotic surgery. This low-latency high-bandwidth use case was demonstrated at 5G World 2016, and was combined with haptic feedback to give doctors a sense of touch on a robot probe for carrying out minimally invasive surgery.
Shorter term, the rapid advances in artificial intelligence (AI) is being applied to many healthcare opportunities, and research company CB Insights identified 106 startups currently focused on AI and healthcare. Primary areas of focus are: preventative care, virtual assistance, wearables, life style management, patient data and risk analytics, emergency room and surgery, in addition to medical imaging and diagnostics. As part of an overall service that leverages many of these startups, AI could also be a transformative opportunity for mobile operators.
The healthcare market is vast and changing, which explains why mobile operators are being drawn to it. The confluence of technologies and their reputation of trust could play to their advantage. However, mobile operators must develop superb partnering and system integration skills in order to enter and survive in this extremely complex healthcare ecosystem. Equally difficult is dealing with the conservative nature of this digital laggard industry, and its regulated approach to the adoption of technology. The reality is that this is a long-term market opportunity, and one that could take five, ten, or possibly 20 years to fully evolve.
This blog is sponsored by Huawei.
— Steve Bell, Senior Analyst, Heavy Reading