On the surface, technology-enabled home health care should be thriving in the United States. The country’s aging population and the transformation of acute illnesses such as heart failure into chronic diseases mean that the number of patients is growing. In addition, new medical-technology devices could help keep patients at home rather than in costly institutions, such as assisted-living facilities or nursing homes—leading to potentially big savings for the health care system.
Instead, the full potential of the technology-enabled home health care market remains to be tapped. In the United States, home care accounts for about 3 percent ($68 billion a year) of national health spending. The market is increasing by about 9 percent annually,1 solid but hardly booming growth, especially since labor (mainly nurses and aides) accounts for about two-thirds2 of the expenditure and home-monitoring technology represents a small fraction of it. What’s holding the market back?...