Why Digital Home Health Care Technology May Be Good for Your Business
Presto’s products convert electronic communications from family into printed multimedia letters for seniors.
We’re getting older, and that’s good. That was the message from the dais at the Digital Home Health Panel that took place during CEDIA EXPO in Atlanta this past September. More specifically, referencing data that shows 70 million Americans reaching senior status by 2030, Ken Kerr, president and CEO at Home Controls, which distributes Grandcare, Presto, and ClearSound elderly care and connectivity devices, put it bluntly: “New needs in huge numbers in an aging population equals new opportunities.”
That was the point that a half dozen or so technology companies that are targeting the home health care industry wanted to get across. All market sectors start off small, and if home health care does develop into a major source of revenue for residential systems integrators, the approximately 50 systems specialists who comprised the panel’s audience might be looked back on as the beginnings of the small army that the product manufacturers and distributors believe will grow into in the coming two decades.
In contrast to the acrimonious health care insurance debate that took place a year earlier, proponents of home health care technology got down to the economic brass tacks early on. Kerr compared the cost of assisted living or nursing home stays–he cited the approximately $75,000 it costs to maintain one person annually in a nursing home environment–with the cost of outfitting a home with sensors that monitor, record, and transmit information about location, medications, and other key daily necessities and said it would be a fraction of the ongoing costs of living outside the home.
“That’s the value proposition to the customer,” Kerr explained. But the numbers are equally good for the integrators that will sell and install those technology products. “Digital home health products are not yet commoditized, so the margins are very, very good right now, like the home theater business when it started out,” Kerr pointed out.
What Integrators Will Need To Know
Aging-in-place as a systems proposition is most analogous to security integration; in addition to the sale and installation of technology products, there is also a recurring revenue stream derived from monitoring data recorded and transmitted by system sensors. These system/monitoring combinations, from companies like Grandcare and Halo Monitoring’s MyHalo fall-detection system, will be worth $20 billion in North America by 2020, according to Laurie Orlov, founder of the Aging in Place Technology watch blog. Grandcare’s system is an example of the active system/monitoring approach that will take the place of, “I’ve fallen and I can’t get up!” passive alert transmitters.
Motion sensors–wireless X10 and Z-wave modules work on the Grandcare system–placed around an elderly parent’s home will send to the caregiver’s laptop or PC information about the occupant’s movements, or lack thereof. That information is important, said Charles Hillman, CEO at Grandcare.
“If someone gets up to use that bathroom in the middle of the night, you expect them to be back in bed within a few minutes,” Hillman said. “If they’re not back in certain amount of time, an alert is sent to the person who monitors them.” The same type of information is also recorded and sent by active pillboxes that show the occupant what to take and when to take it, as well as indicate to the caregiver that the medication has been dispensed.
Programming is typically of the “if this, then that…” type: door sensors can be programmed so that if a particular door is opened between 2 a.m. and 6 a.m., an e-mail or text notification is sent to the caregiver. Blood pressure and weight information are also sent via Bluetooth to Grandcare’s main processor, which includes a display large enough to be read by aging eyes, and then on to the caregiver. However, they will have to learn what to watch for and which bits of information are significant. For instance, Hillman points out that a gain of eight pounds in three days could be an indication of impending congestive heart failure. Thus, user education will play an important role in the successful application of these systems.
The cost of these systems is within reach of many if not most families; a typical Grandcare system will cost between $3,000 and $8,000, plus a $49 charge per month for monitoring services. However, that cost may still be out of the reach of a substantial number of seniors and their families. That’s where Medicaid and Medicare, the federal health systems, come into play, or not… Home healthcare technology is still so novel that it hasn’t been approved by federal administrators. “[Medicare approval] is going to be a state-by-state situation,” Hillman told the CEDIA audience, noting that the federal programs are administered by the states.
Another pitfall that systems integrators will have to reckon with will be liability issues, including system performance and access to a customer’s medical records, which could potentially run afoul of the Health Insurance Portability & Accountability Act (HIPAA) regulation (see sidebar).
Health insurance coverage of aging-in-place technology may fall in line with whatever federal overseers decide on the subject, so that outcome will take some time to manifest itself. However, longterm care insurance may become a factor sooner. “Long-term care insurance companies have been collecting premiums for years now, and it’s going to come time soon for them to start paying out,” Hillman said. “Covering aging-in-place technology will result in lower overall payouts in the long run.”
And that was an underlying theme throughout the presentations: the fact that, as America’s population ages, the existing healthcare proposition will no longer be able to viably support it.
Motion sensors–wireless X10 and Z-wave modules work on the Grandcare system–placed around an elderly parent’s home will send to the caregiver’s laptop or PC information about the occupant’s movements, or lack thereof.
The Psychology of the Sale
While much of home health care’s technologies are based on systems similar to those currently used in home automation, there are significant differences in the culture of that technology. For instance, where home technologies are viewed as a mostly male domain but subject to the industry’s quaint but nonetheless very real “wife acceptance factor,” decisions made about agingin- place technologies will be heavily weighted toward female family members, because women tend to take on the caregiver role. The target demographic for these types of systems will be 45 to 65 years old, says Peter Radsliff, president and CEO of Presto, whose product converts electronic communications from family into printed multimedia letters for seniors.
“The family caregiver is usually the oldest daughter, and she’s the quarterback when it comes to choosing healthcare systems,” he said. “But it’s always going to be a multigenerational sale.”
The psychology of the systems sale is similarly affected; the buyer isn’t generally the person being monitored but the person or persons doing the monitoring. Technology can be used not only to assure a senior’s safety but also to assuage the guilt that family members who now live in other parts of the country can feel about not being nearby anymore.
“The family may feel guilty about lessening the connection between themselves and the senior members of the family,” Kerr said. “Technology can help bridge that gap.”
That brings up an interesting element of aging-in-place as an integration sector. Several products integrate social networking features. Grandcare’s GC Trillium processor lets family members and seniors send and receive pictures, voicemails, letters, videos, and music, as well as brain fitness games in what Grandcare’s director of business relations Laura Mitchell says is a “nonintimidating technology solution.”
Jack York, president of It’s Never 2 Late, a Colorado-based company that creates customized computer systems with therapeutic and entertainment content for use in nursing homes, assisted-living communities and adult-day programs, says companies that have tried to develop the aging-in-place market and failed had focused too much on the technology.
“We’ve seen many of them come and go because they think it’s the technology that will sell the idea,” the former Silicon Valley entrepreneur said as part of a presentation titled, “Connecting The Greatest Generation.” “The reality is, you need to connect on the personal level. You need engagement software that can connect people as well as offer person-centered therapy to help stabilize cognitive decline.”
Hillman agreed, stating, “Socialization is the Trojan Horse; it gets the senior past the technology aversion. It’s the connectivity that will sell to the senior.”
All of the companies that made up the home health care pavilion at the CEDIA Show are small, independent firms. Some are also obvious candidates to become the entry point into home health care technology for larger companies by way of mergers and acquisitions. Larger entities, however, are also beginning to target this emerging sector. In August, technology giants Intel and GE announced a 50/50 joint venture to develop and market products, services, and technologies that promote healthy, independent living at home and in assisted living communities, though these are commercial propositions aimed at connecting seniors at home with institutional caregivers. There’s also interest stirring in technological academic circles: at CEDIA, Georgia Tech showed a prototype of a bathroom mirror that can monitor and analyze skin tone using IR scanning, which can alert users to potential skin cancers and other diseases.
Ken Kerr, president and CEO at Home Controls, which distributes Grandcare, Presto, and ClearSound elderly care and connectivity devices, puts it bluntly: “New needs in huge numbers in an aging population equals new opportunities.”
The residential systems industry is beginning to take notice. In September, the CEA added an awards category for Home Health Products to its Mark of Excellence Awards. The upper tier of residential systems manufacturers is aware of the potential for an aging-in-place market, and there’s been some proactivity in that regard, such as ELAN’s contribution of automation components for the Eskaton National Demonstration Home in Sacramento, California. But they likely will not be market makers.
“The bigger you are, the longer you wait for new markets to emerge,” Joe Lautner, manager of business development and product management at ELAN, said candidly. But Lautner says the agingin- place market is one that is high on his agenda to monitor, which he’s doing by talking with insurance companies and the CEA. “We’re trying to test the market, to get stuff in front of seniors and see what we can learn from it and what dealers can make money on,” he said. “We have to build a business case first.”
Thus, the group of independent companies that gathered at CEDIA is the point of the residential home-care technology spear, collectively focused on using technology to keep seniors safely in their homes longer and connected to family. They have a reason to be bullish on that opportunity. As Peter Radsliff of Presto put it, “This is market that’s not going to start contracting anytime soon.”
What You Need to Know About Privacy Rules
When integrating an aging in place system, ES Cs will have to consider liability issues, including system performance and access to a customer’s medical records, which could potentially run afoul of the Health Insurance Portability & Accountability Act (HIPAA ) regulation. This rule sets national standards for the security of electronic protected health information, and the confidentiality provisions of the Patient Safety Rule protect identifiable information being used to analyze patient safety events and improve patient safety. Grandcare CEO Charles Hillman suggests that integrators anticipate these issues and have waivers for clients to sign ready as part of project documentation. “I’d also suggest involving the family as much as possible in this,” he added, noting that they can open doors to government and healthcare agencies, thus cutting through some of the bureaucracy.
A Few Questions To Ask Yourself
Peter Radsliff, CEO of senior connectivity device maker Presto and nominal head of the home healthcare technology trade group AGETE K.org, says these are the issues that integrators need to address as they consider the agingin- place market.
■ Do you need new skills, and if so, how to acquire them? Will it be via new training or by adding new personnel?
■ Will you need a new brand or division to enter the market? “You may want to differentiate your home theater or automation business from this,” he said. “A separate brand may make you more credible in the senior market.” It may also help you leverage an existing client base.
■ Who will do the selling? “In many cases it might be better to bring in someone who has healthcare sales experience,” he suggested.
■ Will you sell into residential or commercial markets, or both? Unlike other systems sectors, home healthcare technology’s lines are blurred as more seniors move into assisted living homes and independent living facilities, where homes are part of larger communities.
CEDIA Sees Huge Opportunity in Home Health Care
Noting that many ES Cs are of an age when family members begin to require extra health attention and referencing a family member of his own in that situation, Dave Pedigo, senior director of technology for CEDIA , says that home health care and aging-in-place technology represents “a huge opportunity for systems integrators.”
Pedigo says the first-ever health care technology pavilion indicates CEDIA ’s belief in the potential for the sector, and he confirmed that the organization is working in tandem with home health care manufacturers’ trade group AGETE K to develop the market. However, he cautioned, significant legislative and regulatory issues remain to be addressed, such as insurance and Medicare coverage of technology products and installation, and complex liability issues for ES Cs. But, Pedigo concluded, “I think we’ll look back a few years from now at this year’s CEDIA show and realize this was the beginning of a potentially very big new market, one in which ES Cs can do well with by doing good.”
Dan Daley is a freelance writer in Nashville, Tennessee.