Health Care November 5, 2009, 5:00PM EST

Elder Care by Remote

(page 2 of 2)

GE is marketing the product through home health-care companies and to assisted-living facilities. For an individual who wants the system at home, it's not cheap—the cost would be about $70 to $110 per month, depending on the size of the unit and the length of the monitoring agreement.

Amsterdam-based Royal Philips Electronics is also focusing on the aging-in-place market. Since 2006 it has spent $6 billion snapping up home health-care companies, including Lifeline, a maker of personal emergency alert systems that cost subscribers from $35 to $75 per month. Philips also purchased breathing device maker Respironics, as well as Raytel Cardiac Services, a provider of remote cardiac monitoring services. And recently Philips developed the smartBed, which contains tiny, high-tech electronic sensors that can measure patients' vital signs, movement, and breathing as they sleep. (The product is part of a research project and not commercially available.)

As helpful as aging-in-place technology may be, there is one big question yet to be answered: Who is going to pay to put the systems into seniors' homes? "Right now this is a niche market made up of affluent people who want to monitor their parents," says Scott Lundstrom, vice-president for research at IDC Health Insights. "The technology is going nowhere without a reimbursement model that supports it."

Intel and others are trying to convince public and private insurers that it is an investment worth making. During a road show to launch Health Guide, Intel referred to a study published by the Veterans Administration late last year. It found that remote patient monitoring decreased hospital visits significantly—for instance, 20% for diabetes patients and 56% for patients with depression. The technology cost $1,600 per patient per year on average, it reported, as opposed to $77,745 for nursing home care. Intel says it's currently talking with health-care organizations that may provide the full package of service and support directly to consumers. It is also evaluating monthly service programs.

Intel has pilot-tested Health Guide with Aetna and other insurance companies. Lang, who lives in Cypress, Calif., was part of a test conducted by SCAN Health, a nonprofit health plan in California and Arizona. "It became obvious, as we looked at the growth of the aging population and the number of caregivers we had, that relying on an entirely people-based model would be untenable," says Hank Osowski, senior vice-president for corporate development at SCAN. Osowski isn't ready to commit to any specific system, but says remote monitoring will be part of SCAN's model. "We're willing to fund these tools," he says, "because at the end of the day it will result in better [patient] outcomes."

With Kerry Capell in London

Weintraub is a senior writer for BusinessWeek's Science & Technology department.

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