Medical Devices and the Cloud

The article Is Cloud the tomorrow of Medical Devices Industry? includes some of the challenges — regulatory, privacy, security etc. — faced by manufacturers trying to manage medical device data in the cloud. You can’t disagree with this statement:

The success of the vision of Smart Connected Health Grid is dependent on wide scale adoption of cloud computing in all areas of healthcare.

There’s no doubt that adoption of cloud-based technologies are starting to provide concrete market opportunities in the Healthcare space.

There are also two major market barriers that will have to addressed in order for the cloud’s full potential to be realized:

1. Who’s going to pay for it?

  • The Apple/Google/Facebook “created a marketplace around the end consumer” model will not work in the medical industry.  Consumers do not manage their own healthcare, and certainly not their medical data.
  • Glucose monitoring is also not a good model. Strips and meters are reimbursed by Medicare and most private insurers.
  • The “Service Delivery Platform” may be a great idea, but unless you can prove its effectiveness at saving money in the overall healthcare delivery system it has only limited value.
  • Proving this effectiveness is difficult to do, and the bar is very high on the expected returns for preventative care.  Maybe this is where the vertically integrated Accountable Care Organizations (ACO) could have an impact?
  • The end consumer (re: their willingness to spend money anyway) is not likely to be part of the revenue generation equation.

2. Interoperability.

  • You can’t overstate connected in “Connected Health Grid.”  This is where the real value is.
  • Data collected from a medical device must be put into context with all of the available health data in order to properly access a patient’s current state.
  • This means you have to make the device data that resides in your cloud available to be consumed by others, e.g. payers, PHRs, hospital EMR systems, etc.  Each of these interfaces is unique and costly. HIPAA is also key barrier here.
  • There are many technical issues surrounding medical device connectivity. I’ve written frequently about these interoperability topics in the past.

The potential is there, but IMO creating a value proposition that will result in a sustainable market based on a technology alone will probably not work. It’s the old “hammer looking for a nail” problem.

Medical device data combined with cloud-based technology will be part of many effective healthcare solutions. Some of these may actually make money, someday.

2 Responses to “Medical Devices and the Cloud”

  • Thanks for the link to an interesting article, and for providing an equally interesting short commentary. Let me chip in with my tuppence worth. I remember listening to Larry Ellison wax lyrical about how technology (his, of course) would revolutionize patient health data management at an Oracle conference in Copenhagen in 2001. While initially skeptical, I have to say (in Denmark at least) the results of EHR implementation have been impressive (if somewhat late and over budget – but hey, it’s IT!). One of the factors in success for the Danish EHR experience has been the development of a government managed central patient data repository, which lies at the heart of your comment about interoperability – a stable API for a central data repository, with appropriate security, will encourage all kinds of novel applications to be developed in patient care. However, your first point is somewhat biased towards the private payer model. I could instead imagine companies using the Danish market as a beachhead for cloud-based medical devices, for example, then including other EU countries with strong centralized patient data systems such as France and the UK before tackling the US. It is possible that the private payer model may, as you point out, hamper innovation here.

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