Telemedicine market projected to grow 20% in 2000New report analyzes growth factors, business opportunitiesContrary to the nagging perception of telemedicine as an industry that has yet to get off the ground, the global telemedicine
New report analyzes growth factors, business opportunities
Contrary to the nagging perception of telemedicine as an industry that has yet to get off the ground, the global telemedicine market totaled $15 billion in 1999 and is expected to grow another 20% this year, according to a report published recently by Waterford Telemedicine Partners, a New York-based investment banking firm.
Telemedicine Industry Report 2000 defines market strategies and makes growth projections within nine industry segments, offering strategies for growth and case studies that illustrate specific business models. The report includes size and annual growth rates from 1999 through 2010 for the global market and the various market segments. Projections are based on an in-house study that computed revenues from 100 representative companies. These revenues were analyzed in the context of demographic data, anticipated healthcare demand, socioeconomic factors, accelerated technological progress, and other assumptions related to current and predicted adoption of telemedicine technologies.
Market segments profiled in the report are networking and telecommunications, monitoring devices and services, PACS/teleradiology, PACS components, clinical health information systems, online resources, videoconferencing systems, contract research services, and diagnostic technology and services. Each profile analyzes the technologic and socioeconomic factors that will either impede or foster growth. Specific areas of opportunity within each market niche are also highlighted.
Network technologies. The increasing interest in Internet-based services, transaction processing, and multimedia communications presents opportunities for network technology vendors. Through increased exposure to electronic mail, videoconferencing, rapid transmission of medical images, and clinical data repositories, healthcare executives now recognize that existing communications systems within their organizations are inadequate to satisfy needs. New developments that capitalize on voice, video, and data convergence in one network are spurring growth in this sector.
System integrity. Companies specializing in system integrity solutions will be busy in the near term, as healthcare organizations scramble to implement Health Insurance Portability and Accountability Act regulations. Only a relatively few products now exist that are targeted solely to the healthcare market and designed for secure data transmission, representing an area of prime opportunity for software developers.
Teleradiology and PACS. As in other areas of telemedicine, managed-care pressures are a driving force in this segment, as end users continue to look for technologies that will make operations more cost-efficient. Most industry experts believe that increasing adoption of teleradiology will ultimately lead to PACS implementation, because of that technologys ability to digitally archive large image files and integrate them with other clinical information systems and services.
One obstacle to future PACS growth is interoperability of systems and software, an issue that is being addressed by major trade organizations. Vendor compliance, while voluntary, will be important for these systems to achieve wider adoption by end users.
Healthcare information systems. The next big investment by healthcare organizations will be systems that abet compliance with security regulations imposed by HIPAA. At the same time, providers will continue to build up clinical data repositories and complementary information systems for tracking and shaping patient outcomes, establishing electronic patient records, and connecting physicians to each other and to clinical data.
Companies in the HIS sector, as well as in those sectors specific to telemedicine pure play and monitoring, would do well to join with major diagnostic companies, according to the report. Through such partnerships, facilitators benefit by the direct relationship with a specific clinical need and its solution.
Telemedicine pure play. This market will profit when reimbursement rules are relaxed to allow payment for services beyond rural regions, but progress is slow, according to the report. Congressional bills introduced last year that would have expanded 1997 federal reimbursement legislation failed to attract majority support. Significant obstacles to growth in this market within the next two years include lack of standardized equipment, equipment interoperability and affordability, and lack of financial and clinical outcomes. Expect these end-user concerns to be addressed and resolved within the next four to six years.
Monitoring systems and services. Companies in this sector will see much growth thanks to the trends toward care in the home and other alternative environments, particularly as part of disease management strategies that track vital signs and specific disease symptoms. Substantial growth opportunities also exist for manufacturers of patient monitoring products to meet the demands of hospitals and long-term-care facilities. Companies that can develop products that contribute to reduced labor costs, shorten patient lengths of stay, and minimize risk while providing proof of positive patient outcomes will be most successful in this market.
Online resources. This market will continue to gain strength from the frenzy associated with all things Internet-related, but areas of particular opportunity lie in electronic data transmission technology applied to clinical services. These include lab ordering and results, provider-side prescriptions, formulary checks, drug utilization review, clinical alerts, and clinical protocols and guidelines. Of these, online lab orders and prescriptions represent the greatest transaction volume and market opportunity. Its estimated that about one billion laboratory transactions and three billion prescription transactions occur annually in the U.S., and most are currently paper-based. Those figures could increase by as much as 30% over the next five years.