As baby boomers age and the health care industry moves to a system that emphasizes wellness and prevention, the global market for consumer medical devices ranging from pedometers and personal scales to blood glucose and cholesterol meters will boom to more than $10 billion within four years.
A new report from information and analytics firm IHS IHS +0.5% said revenue expansion of the consumer medical device industry will grow from 5 to 9 percent annually “for the next few years,” reaching $10.6 billion by 2017. This year, IHS forecasts revenue to rise four percent to $8.2 billion from $7.9 billion in 2012.
The trend toward consumer medical device growth will also be driven by the private sector and the Affordable Care Act, which is moving hospitals and doctors away from fee-for-service medicine where they are paid based on volume of services to reimbursement based on the value of care they provide.
“Given the changes brought by the Affordable Care Act and the intent of moving away from a fee-for-service model, healthcare in the US is shifting towards the idea of “value over volume” and where reimbursement is based on quality,” said Roeen Roashan, IHS analyst for consumer medical devices and digital health.
Furthermore, consumer medical devices are low cost and can largely be purchased by consumers over the counter.
“Preventive care and home monitoring will play an important role in increasing the quality of healthcare and decreasing the costs,” Roashan said. “The Affordable Care Act brings free preventive care to the table and this is a driver of growth for consumer medical devices.”
Globally, spending on consumer medical devices is expected to surge thanks to an increase in chronic conditions such as high blood pressure, diabetes and obesity. At the same time, lifestyle changes are giving rise to more “fitness-conscious consumers,” the report said.
The increased spending could be a boon to companies like Roche, Johnson & Johnson JNJ +0.79% (JNJ) and Siemens SI -0.02% (ADR) among others.