When Apple announced that it would start selling a smartwatch, dubbed the Apple Watch, next year, the press reacted with a tidal wave of stories. Apple CEO Tim Cook called the Apple Watch “the most personal device we’ve ever created.”[1]
Once it goes on sale, the Apple Watch will join a growing array of wearable devices that gather information about their users’ physical activity, sleep patterns and vital signs and transmit these data to smartphones, tablets and other destinations.
From fitness bands to flexible patches, these devices produce data that, often enabled with analytics, can be used by consumers to manage their health and by healthcare organizations to improve care and potentially reduce costs through systems such as remote patient monitoring.
Data generated by these personal devices can be used by insurers and employers to better manage health, wellness and healthcare costs and pharmaceutical and life sciences companies to run more robust clinical trials and capture data to support outcomes-based reimbursement.
This potential is fueling venture capital investment in digital health and wearable tech. By mid-2014, digital health startups had raised $2.3 billion, more than they raised in all of 2013.[2] By the end of 2014, wearable companies will have shipped a projected 7.6 million units within the US, an almost 200% increase over the year before.[3]
Many consumers believe wearables can dramatically improve their health, according to a recent survey of 1,000 adults commissioned by PwC’s Health Research Institute (HRI) and Consumer Intelligence Series. About half said they believe wearables will lengthen the average life span by a decade, reduce obesity and turn the average person into a better athlete. Almost half of respondents said that they were “very” or “somewhat” likely to purchase a fitness band in the next year.
Still, these are the early stages of the technology and product adoption lifecycle. Just one in five American adults owns a wearable, our survey found. Just one in ten uses it every day. At the Rock Health Innovation Summit in August, Genentech CEO Ian Clark called health wearables “a bit trivial right now.”[4]
“I don’t doubt that the wearable piece is going to be a productive business model for people,” Clark told an audience packed with health wearables entrepreneurs. “I just don’t know whether it’s going to bend the curve in terms of health outcomes.”
Yet glimpses into the health wearable future are visible. More than one million customers transmit data from fitness trackers to Walgreen Co., in exchange for points that can be used like cash in the company’s stores and through its website for many products.[5]
Physicians at Dignity Health use Augmedix’s Google Glass program to enter patient information into electronic medical records. Ochsner Health System’s “O Bar” sells a curated selection of wearables and apps that can be “prescribed” by physicians.
Companies may need to rethink assumptions about wearables. The survey found that most consumers are not willing to pay much for their wearable devices. They would rather be paid to use them. Companies—especially insurers—offering incentives for use may gain traction. The survey found that 68% of consumers would wear employer-provided wearables streaming anonymous data to a database in exchange for breaks on insurance premiums.
HRI also found that simple social strategies might not work well for health wearables. Few consumers are interested in sharing health data with friends and family, the survey found. Social media strategies for health wearables must be engaging, interoperable and intelligent if they are to succeed.
And, unsurprisingly, consumers remain concerned about privacy. But they trust clinicians more with their data than any other entity, according to the survey. To retain that trust, companies will need to be transparent about what is being done with the data.
As wearable technology becomes cheaper and more sophisticated, and data quality improves, these devices and their associated apps will be woven into many consumers’ lives and the health ecosystem. A wearable world is emerging, slowly, helping build a New Health Economy.
Paul D’Alessandro is a principal at PwC Health Industries and Trine Tsouderos is a director in PwC’s Health Research Institute.
Footnotes:
[1] http://www.apple.com/live/2014-sept-event/
[2] Rock Health, “2014 Midyear Digital Health Funding Update: Obliterating Records,” http://rockhealth.com/2014/06/2014-midyear-digital-health-funding-update, June 30, 2014
[3] IDC, “U.S. Wearable Computing Device 2014–2018: Forecast and Analysis” March 2014.
[4] Lee, Stephanie M., “Genentech CEO wonders if wearables craze is ‘a bit trivial,’ San Francisco Chronicle, http://blog.sfgate.com/techchron/2014/08/21/genentech-ceo-wonders-if-wearables-craze-is-a-bit-trivial, Aug. 21, 2014.
[5] Interview with Dr. Harry Leider, Chief Medical Officer, Walgreen Co.