RPM Market Overview
Telehealth is a broad term these days. It refers to any number of digital innovations in clinical healthcare delivery utilizing telecommunications or internet-based technologies. Often, remote-patient monitoring (RPM), or remote-physiological monitoring, is included as a subset of telehealth. As it has been said many times, Covid-19 accelerated both healthcare professional awareness and patient awareness of telehealth-based care models. Just as RPM is a sub-term under telehealth, there are a variety of business models and technologies that exist under RPM terminology. Grandview Research estimates that the RPM market will grow at 20.2% CAGR until 2030. I fully agree given the established clinical outcomes from RPM-based care models. Thus, as the market continues to mature, it is important to segment companies into groups.
RPM companies can be segmented via a few key criteria:
1. Indication/Patient Population
2. Technology Suite vs Service Offerings
3. Target Customer
Indication
While I prefer to not use pharmaceutical terminology, many RPM companies build solutions for specific conditions that are very similar to the concept of an FDA indication in pharmaceutical and medical device products. RPM companies often focus on both highly prevalent conditions such as hypertension or diabetes or niche conditions like certain mental health conditions. This is a key area to use when segmenting and evaluating RPM companies and care models.
In some circumstances, RPM companies seek to build more comprehensive solutions such that they can sell into facilities to be their single vendor. Historically, and even in present times, health systems and multi-specialty practices may purchase RPM vendors independently within a single service line or department. This creates obvious issues with respect to multi-vendor management and software integration with both the electronic health record systems and between vendor systems. In most cases, RPM companies that can provide a single software solution for multiple high-value use cases will be most successful in the long run as purchasers gain sophistication and market awareness during the procurement process.
Healthcare has historically thought about service lines and programs by disease. Each disease has a unique etiology, diagnostic criteria, and treatment pathways. Thus, a one-size-fits-all RPM solution is a complex offering.
Technology Only RPM Vs Full-Service RPM Offerings
There is significant interest among investors related to software-as-a-service (SaaS) companies which has fueled a renaissance of market entry by SaaS RPM companies. RPM companies exist on a spectrum from SaaS technology-only offerings to full-service clinical partners that come with staffing and additional resources like device management (i.e., Avenue Health is an example of a full-service RPM offering). The degree to which a company offers additional patient tech support, patient onboarding support, clinical services, and device management is a good way to segment companies operating in the RPM market.
Target Customer
Target customer is also a useful segmentation tool. RPM-based clinical models are most mature in the employer-sponsored benefits market. Companies like Livongo, Omada, and Lark Health have been operating as solutions for employers looking to innovate in hypertension and diabetes care. An RPM company's target customer can be viewed from three different angles: insurance market, provider size, and provider specialty.
Insurance Market: companies may choose to differentiate by targeting self-insured employers, Medicare Advantage Plans, or Medicaid Managed Care Plans. Under these three larger categories, are additional sub-segmentations that companies may choose to target.
Provider Size: For those companies that target healthcare providers and health systems, they may choose to segment by provider size. Providers range from single-physician practices to large national health systems.
Provider Specialty: RPM companies building solutions for a particular indication may segment their target market by physician specialty. Thus, a diabetes RPM solution would target primary care and endocrinology practices.
Each of these target markets has different user-experience requirements and integration capabilities, thus they are truly unique offerings. As the market matures, we will likely see some of the larger providers enter additional target markets once scale is achieved in one.
Conclusion
RPM is a rapidly growing market, and it will become increasingly important to segment companies whether you are a purchaser, a provider, a partner, or a solutions company looking at the competition.
I hope you had a nice weekend! I look forward to providing more details on some niche topics in healthcare.
All the best,
Robert