Innovation & Technology April 1, 2010, 11:01AM EST

Remote Health Care: Body Parts Make Phone Calls

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"Wireless companies face a huge challenge because they are up against well-entrenched rivals that have been successfully selling technology in this market for years," says Nicholas McQuire, a research director at IDC in London. The number of wireless health devices is expected to increase from 300,000 in 2009 to 5.2 million by 2014, says consultant ABI Research. In the U.S., the m-health industry is expected to grow from $304 million today to $4.4 billion by 2013, says Dallas technology consultant Parks Associates.

Already a number of specialized products are hitting the international market. France Telecom's Orange and Swedish telco Doro have partnered on a handset for elderly consumers, with big buttons and a larger-than-usual screen. Users can press an emergency button to link to an insurer's call center and request everything from an ambulance to help picking up prescriptions. Telefónica is testing mi familia, a service for elderly and Alzheimer's patients and their families in Spain. When customers turn on their cell phone, family members or caregivers can log onto an Internet portal to keep tabs on the person's whereabouts. The phone can be programmed to call the family, ring for medical help, or summon a taxi if needed. "If I ever become disoriented, help is just a button away," says Juan Luis del Arbol Navarro, a 76-year-old customer. "I don't mind if my family follows where I'm going."

An estimated 60% of health-care expenses go toward treating diseases such as diabetes or heart failure, says Donald Casey, CEO of West Wireless Health Institute, a nonprofit medical research group in La Jolla, Calif. "These diseases can be better managed through the use of simple wireless sensors that are inexpensive to manufacture," he adds. Congestive heart failure, the leading cause of hospital admission in the U.S., is an example. Poor control of the disease, the New England Journal of Medicine found last year, means that some 27% of patients are readmitted to hospital within 30 days of treatment, costing $10 billion annually. By monitoring patients at home using mobile technology, doctors can spot irregular heart rhythms and adjust treatment, potentially avoiding rehospitalization.

Before the m-health market can take off, however, hospitals, insurers, and doctors need to work out the business model. To persuade insurance companies or government health systems to cover mobile health costs, hospitals and telcos need to collect more clinical evidence showing that m-health can improve care and save money. So far, t+Medical has conducted 20 clinical trials with health-care providers in Britain, the U.S., and Dubai. In one trial, a Bluetooth-enabled glucose meter improved diabetes patients' blood sugar levels and increased the number of patients that could be monitored. "The profession wants to see that mobile technology not only works but that it improves patient outcomes and doesn't increase their workload," says t+Medical founder Lionel Tarassenko.

Telecom providers believe the way to build the business is to team up with medical equipment makers. Orange has inked a deal with Italian medical device company Sorin Group to develop pacemakers and defibrillators that transmit data on a patient's heart rhythms to the doctor without the patient leaving home. Says Thierry Zylberberg, head of Orange's health-care business: "If we can bring efficiency to the system, we will share in that gain with the customer." And if your knee or heart can talk to your doctor, maybe they won't get sent straight to voice mail.

With Mark Scott in London. Capell is a London correspondent at Bloomberg BusinessWeek.