Strategic Analysis of the European Telemedicine Markets

  Improved Security for Patient Data set to spur Telemedicine Uptake as a Mainstream Technology

The European telemedicine markets are at a critical growth phase where vendors need to capitalise on growing opportunities and gain the early-mover advantage over competitors. However, they must first counter the resistance of patients and healthcare professionals who remain doubtful regarding the security and long-term viability of the technology.

"Patient confidentiality is a key issue that hinders full-fledged adoption of telemedicine and restricts it to specialist applications," notes Chris Cherrington, Research Analyst at Frost & Sullivan (http://healthcare.frost.com). "In order to succeed in the mainstream market, telemedicine vendors must give immediate attention to removing the insecurities that surround the transmission of patient information over a public network."

Such concerns are being addressed by improved data security standards and encryption techniques. Virtual private networks (VPNs) or controlled networks such as the United Kingdom 's NHSnet have been extremely successful in providing managed secure networks.

Patient Smartcards are also gaining prominence as tools to secure patient data, especially in France . However, this technique is under scrutiny due to a lack of standards and interoperability issues and is, therefore, unlikely to be realised in the near term.

Encouraging signs are now present about the gradual dissolution of resistance to telemedicine, thereby accelerating its mainstream acceptance. While better security has allayed fears about personal data being compromised among both healthcare professionals and patients, governments have also become more open to funding healthcare technology that creates noticeable improvements in service quality at no extra cost or at reduced costs.

This growing interest is expected to push the telemedicine market growth at a CAGR of 42 per cent from EUR 72.2 million in 2003 to EUR 1.50 billion in 2010.

Besides an ageing population, the growing demand for home-based treatments is creating a conducive atmosphere for the uptake of telemedicine as a mainstream technology - especially in remote patient monitoring (RPM). This would benefit patients in terms of convenience and simultaneously allow healthcare facilities to control costs.

The proliferation of more affordable broadband Internet access and high quality telephony and videoconferencing throughout Europe is set to underpin the continued expansion of transmission technologies such as telemedicine.

In order to benefit from the favourable healthcare environment, telemedicine vendors need to work with professional and trade associations to generate greater excitement about the technology. This is achievable through offering training programmes and educational packages, and giving end users a 'hands-on' experience with telemedicine technologies through various events and conferences.

With end users demanding proof of the positive impact of telemedicine in terms of return on investment and cost savings, sponsoring or supporting of high profile projects, developing lease and private-public partnership schemes and making provisions for 'pay-as-you-go' options for smaller volume end-users is also likely to sustain interest in telemedicine.

Pilot schemes/specialist applications such as the use of telemedicine to provide emergency cover in remote parts of Scandinavia have been successful. Now these applications are poised to be realised on a larger scale.

"Emergency medical care and training applications for remote sites and viewers are making their way into the mainstream market with their ability to provide cost savings and convenience to healthcare providers," adds Mr. Cherrington.

Telecardiology remains the largest contributor to the growth of telemedicine. Increasing cardiac problems, coupled with the popularity of RPM, are projected to push its revenue contributions to the telemedicine market from 49 per cent in 2004 to 71 per cent in 2010. Teleradiology's contribution, on the other hand, is expected to fall from 48 per cent to 28 per cent during the same period.

"The telecardiology market is set to experience high levels of growth in the coming years as they are now working with healthcare facilities to meet the patients demand for at-home treatments," concludes Mr. Cherrington. "If the industry can use this to develop other applications, the future for telemedicine is indeed a very bright one."

(30/8/04)