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New research: FDA-regulated digital health devices could save U.S. healthcare billions

Last year, the FDA seemed to lean toward deregulation of wellness, wearable and mobile devices when it downgraded — from Class III high-risk to Class I low-risk — mobile device data systems, which include app-tethered wellness devices.

But recent research from Accenture, an IT services company, shows that FDA-regulated digital health solutions—which include Internet of Things devices and software created for detection or treatment of a medical indication — are estimated to save the U.S. healthcare system more than $100 billion in the next four years.

Accenture estimates that in 2014, FDA-approved digital health devices and software saved the U.S. healthcare system $6 billion, and that number is expected to rise to:

  • $10 billion in 2015
  • $18 billion in 2016
  • $30 billion in 2017
  • $50 billion in 2018

Accenture made these estimates based on the idea that regulated digital applications and devices will improve medical adherence, make health-related behavioral changes in patients as well as decrease emergency room visits therefore reducing spending in these three areas.

The company also predicts that FDA-approved digital health solutions will triple by the end of 2018 from 33 last year to 100.

Accenture found that there are several factors that will accelerate the growth of FDA-approved digital software and devices:

  • Increased use of healthcare IT—driven by meaningful use mandates– by physicians and patients. Accenture found in a recent survey that one in four U.S. physicians use telemonitoring devices for chronic disease management.
  • The growing demand by patients to manage their own care, as seen by the rising number of people who own and use wearable devices. Accenture estimates the number of consumers who own a wearable fitness device will double in the next five years.
  • The shift to value-based reimbursement is creating a prime environment for clinical and business strategies that incorporate digital health devices. Accenture estimates that by 2018, funding for value-based care will reach $6.5 billion.

”The proliferation of Internet-connected solutions and evolving regulatory guidelines are blurring the lines between clinical and consumer health solutions,” Rick Ratliff, managing director of digital health solutions at Accenture, said in a press release. “As consumer health platforms support more ‘medical’ devices, rather than just today’s wellness trackers, they’ll create a viable self-care model in a segment that today is occupied by chronic-disease monitoring companies.”

Whether the FDA will further regulate digital health software and devices is yet to be seen, but the agency’s move towards deregulation last year sparked criticism among advocates who are worried that some of these devices could be under-regulated once wellness systems enter medical settings.