Report projects steady growth ofr telemedicine market in U.S.

July 1, 1997

Report projects steady growth for telemedicine market in U.S.Desktop and Internet technologies stimulate interestNew desktop and Internet-based technologies, as well as a growing body of positive outcomes research, are fueling steady

Report projects steady growth for telemedicine market in U.S.

Desktop and Internet technologies stimulate interest

New desktop and Internet-based technologies, as well as a growing body of positive outcomes research, are fueling steady growth in the telemedicine market, according to a report just released by the publishers of Telemedicine and Telehealth Networks and Diagnostic Imaging magazines. One of the strongest findings of the report, entitled Telemedicine: Analysis of Market Status and Industry Trends, is that telemedicine is increasingly being viewed as one of the most affordable ways to improve healthcare revenues without compromising patient care.

This change in telemedicine's image is because telemedicine practitioners have begun accumulating studies and data that validate their belief that the technology can be both cost-effective and clinically effective. As the body of positive outcomes data grows, the number of viable markets and applications is also on the rise. Clinical specialties such as radiology and cardiology continue to be the hottest growth sectors, but broader application areas, such as home health and emergency care, are experiencing a growth surge. In addition, proven markets, such as correctional facilities and the military, remain strong.

Key telemedicine markets include:

  • Home health. With an aging population, limited Medicare and Medicaid funds, and the desire of many elderly patients to remain at home rather than be institutionalized in a nursing home, the demand for home-healthcare services is on the rise. Some analysts predict that 20% of all home-healthcare visits will be delivered via telemedicine by 2001.
  • Emergency care. In this segment, telemedicine is being used for trauma triage, to extend emergency coverage in rural locales, and to alleviate specialist shortages in several telemedicine programs across the country. Future potential applications include mobile telemedicine systems for real-time emergency-care and emergency-response systems for the aviation and shipping industries.
  • Teleradiology. Despite the fact that teleradiology is the most widely adopted telemedicine application in the U.S., the market is not yet saturated, particularly in rural regions where radiology specialists are few. This means increasing opportunity for teleradiology service providers to contract with outlying hospitals for primary diagnosis and overreads. In addition, home- and office-based systems for on-call radiologists, which make up the largest share of the teleradiology market, are expected to maintain steady growth.

Technological advances

Some of the most significant changes taking place in the telemedicine field over the next few years involve technology, which is evolving toward more compact, user-oriented systems and multimedia desktop software. Some key technological advances include:

  • Increasingly customizable application-specific systems. Several vendors recognize the need to offer equipment tailored not just for telemedicine, but for specific clinical applications using telemedicine. In addition, many vendors are adopting modular, open-architecture platforms to offer the broadest spectrum of product and network configurations possible.
  • Desktop telemedicine. Although some videoconferencing vendors are concerned that desktop telemedicine systems could make room-based interactive video and rollabout equipment obsolete, others believe that the growth in sales of desktop systems for telemedicine signals an overall broadening of the market and greater acceptance of telemedicine by the medical community.
  • Store-and-forward technologies. As more healthcare organizations adopt desktop technologies for their integrated health information networks, it has been estimated that 80% to 90% of telemedicine will eventually be done in a multimedia, e-mail fashion.
  • Integrated healthcare information and delivery systems. There is a growing trend among hospitals and other healthcare-delivery organizations to establish multilevel, multimedia health information networks that combine and centralize administrative and clinical services. Ultimately, telemedicine is expected to evolve from a standalone clinical application to an integrated component of these patient- and provider-based healthcare delivery systems.
  • The Internet. In their efforts to decentralize patient information and merge health information systems, patient records, and interactive consulting at the desktop, many caregivers and healthcare facilities are adopting World Wide Web-based technologies. Because of the Internet's flexibility, interoperability, and relatively small capital investment costs, the development of Web-based applications for healthcare is expected to grow exponentially over the next few years.

Despite all of these advances, some researchers warn that equipment and transmission costs are still too high for those markets that could most benefit from telemedicine networks: underserved urban and rural communities. The Telecommunications Act of 1996 addresses this problem to a certain extent through its universal service requirements, although the issue of equipment acquisition costs remains. In the long run, however, PC-based desktop technologies and Internet-based applications are expected to make lower cost telemedicine more widely available.

The report concludes that the telemedicine industry will surviveæand eventually thriveæthrough a convergence of reliable, cost-effective technologies; effective standards and regulations that encourage-not prohibit-the implementation of these technologies; and an increasing body of data that supports outcomes aggregates and care management as well as cost-effectiveness.

Telemedicine: Analysis of Market Status and Industry Trends is intended to be a strategic-planning tool for companies already in the telemedicine market or looking to enter it in the near future. The 140-page report also includes detailed profiles of 40 vendors, including market shares, revenue projections, number of installations, and future product developments. For more information, call 415/905-2671.