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JULY 7, 2004
SPECIAL REPORT: TECH & MEDICINE

The Dawning Age of "Silver Tech"
Networked devices that keep tabs on at-risk elderly patients living at home could soon provide better care -- and cut costs


At the end of June, 11 pairs of elderly adults from Portland, Ore., and from Las Vegas became lab rats. A team from the world's largest semiconductor maker, Intel (INTC ) descended on their homes and stuck special chips and sensors onto their chairs and beds. The sensors were then connected wirelessly to a laptop, which was loaded with solitaire, but was there to play a much more serious role in this game.


Over the next three to six months, the laptop will notify the retirees' caregivers and Intel researchers whether the seniors, who suffer from cognitive decline, have stayed in bed at night, have gone to the bathroom, and visited the kitchen. The idea is for the caregivers to know just when they need to intervene. The sensor network could, potentially, allow the seniors to live independently longer in their own homes, says Eric Dishman, manager of the proactive health research group at Intel. And that's something both these folks and their health-care providers want.

Welcom to the dawn of the "silver tech age," when chipmakers, software developers, medical-device manufacturers, and network suppliers focus their smarts and growth plans on helping the elderly where they live. Until now, most efforts have been aimed at improving care within hospitals and doctors' offices. Now the focus is shifting to the home -- and for good reason. Surveys show that 95% of older adults want to live in their own home for as long as possible.

UPWARD SPIRAL.  That suggests they would be willing to pay for technologies that can keep them out of senior residences and convalescent hospitals. Intel's Dishman says he has received more than 50,000 e-mails in the past six months from baby boomers wanting to buy Intel's wireless sensor network for their parents' homes.

Health-insurance companies support at-home care as well, hoping it will help keep medical costs from snowballing. The rule of thumb: Each additional year of life increases health-care costs by 3%, says Rich Ostuw, principal with management consultancy Towers Perrin. And the U.S. population is aging: The number of Americans aged 45 to 64 increased 38% during the past decade, according to the AARP.

Health-care costs already account for 15% of U.S. gross domestic product, and they could reach 20% within a decade. "It is clear that with the retirement of the baby boomers, the existing way of delivering health care is unsustainable," says Kent Larson, director of House_n: The MIT Home of the Future research project at the Massachusetts Institute of Technology. "The gravity of health care will shift from the hospital and clinic to the home."

PRIVACY ISSUES.  The idea is often referred to as "self-care." Essentially, the patient will use at-home medical technology and supplement that by getting help from their social network -- children and friends -- reducing doctor bills and hospital stays. Many studies by the likes of Kaiser Permanente show that at-home technologies can reduce health-care costs by 20% to 30%.

That's the theory, at least. Many of these technologies still have to be perfected. At-home monitoring could also raise a hornet's nest of privacy issues over who can access the medical data and when. Experts believe, however, that many older adults will be willing to opt for less privacy in exchange for living independently longer.

If they're right, that could prove to be a major market opportunity for a wide range of companies. Utilities and phone and cable companies could, potentially, offer remote monitoring services, says Larson. Consumer-electronics and components makers like Koninklijke Philips Electronics (PHG ) of the Netherlands are developing cell phones with embedded biometric sensors that can take their wearers' vital signs and beam them to their doctors. These might become commercially available within several years.

The total medical-devices market could jump from $293 billion in 2002 to $450 billion in 2007, figures analyst Bill Martineau of market researcher Freedonia Group in Cleveland. And at-home gear will be a major engine behind that growth.

SMART HOMES.  Innovative startups are already piling into the market. New-York-based Living Independently (LI) offers infrared motion detectors to accomplish what Intel has set out to do, if only a bit more crudely. Its systems report abnormalities -- such as no movement at the house for a prolonged period of time -- to a caregiver's pager, cell phone, or e-mail account. And though LI began selling its $59.95 to $89.95 monthly service (the initial cost to install the hardware is $298) only four months ago, it should turn profitable by yearend, says co-founder George Boyajian. LI already has hundreds of customers.

The home-monitoring technology will grow in sophistication and capabilities. LI's sensors also measure and report temperature within the house. By late 2004 or early 2005, the company plans to begin providing caregivers with readouts from the resident's glucose monitor, blood-pressure monitor, and scale, Boyajian says.

Companies like Intel and health-care instrumentation maker Siemens Medical, a division of Germany's Siemens (SI ), envision a smart home that will eventually collect and analyze data on its owner's well-being unobtrusively and automatically, while the user goes about his daily life. This smart home would sound an alert if its resident falls down and can't get up. During a favorite TV show, it would pop up a reminder for the patient to take a pill. Using voice commands, the system would walk an Alzheimer's patient through the process of preparing a meal.

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