This Insight is part of the Signify Premium Insights (SPI)-Digital Health service, which will launch on 9 January 2023. From that date, this and all SPI-Digital Health Insights will be available only by paid subscription. Click here for a free one month trial of this service.
Last month’s announcement of a tie-up between GE Healthcare and RPM vendor AMC Health is the latest signal that the healthtech giant has finally come to the RPM party. The partnership also demonstrates how GE is taking a pragmatic approach to growth in an extremely fragmented RPM market.
The Signify View
In linking up with AMC Health, GE Healthcare takes another step towards building its out-of-hospital ambulatory capabilities. Amid the feeding frenzy of start-ups vying for RPM market share, the GE-AMC partnership is striking for its relative sobriety – bringing a multinational conglomerate alongside a well-established US RPM vendor with a large customer base (including the huge US Department of Veteran’s Affairs). As well as mutual synergies between the two companies, GE’s shift towards out-of-hospital monitoring also aligns with its decision to spin off its healthcare unit early next year. This will see the creation of a new Patient Care Solutions segment of the healthcare business, which will include monitoring and digital tools.
Partnership Made In Healthcare Heaven?
The GE-AMC partnership will take GE hospital data (the company has one of the largest installed bases of devices for clinical monitoring coverage in US hospitals) and remote data from AMC’s RPM platform. This data will then be integrated onto GE’s Edison Healthcare database, giving clinicians a longitudinal view of patients throughout their journey of care from the hospital into the home.
The partnership is a clear signal of GE’s intent to go with an established vendor rather than a start-up. AMC Health’s customer base has been built over two decades, and the company is an experienced hand in device logistics and patient engagement. Its device and condition-agnostic platform offer a large potential Total Addressable Market (TAM), simpler integration with existing healthcare IT, and the flexibility to move with the market. The company claims its RPM platform will integrate with ‘hundreds’ of FDA-approved vital signs monitoring devices associated with ‘over 100’ chronic and acute conditions. This agility is particularly important given the breakneck pace of advancements in remote monitoring device capabilities and the high incidences of patients suffering with multiple chronic conditions. In our recently-published global RPM Report (see details here), we found that most RPM platform vendors, if not already agnostic, are on that path. AMC is at the forefront of this.
Picking Up Pace
GE Healthcare enters an RPM market which is evolving at pace. In our aforementioned Global RPM Report, we noted that revenues from RPM technology and service provider sales (including monitoring service providers) are projected to grow from $1.31B in 2021 to $2.95B in 2026. Greater financial and political commitment from governments, the launch of fee-for-service reimbursement frameworks (especially in the US) and wider structural shifts in healthcare (for example the shift towards value-based care) are driving the market. Covid-19 was a big RPM driver in 2020 and 2021, but clinical backlogs will now spearhead adoption as health systems increasingly look to digital technologies. Globally, an estimated 6.37M of lives will be monitored by 2026, almost three times the current figure.
Barriers To Entry
Despite this backdrop, vendors face significant barriers to market entry. ‘Plumbing issues’ for providers (and therefore vendors) include challenges around patient enrolment and how to integrate RPM programmes into existing clinical workflows and healthcare IT; how to provide the extra clinical resources needed to monitor and manage RPM programmes and integrate them into EHRs; how to manage and maintain patient engagement (ensuring that patients comply with the use of their assigned solution to enable consistent reporting, a key consideration for all at-home medical solutions), and device logistics and supply chain management.
In response to these issues, many RPM platform vendors offer an array of services beyond platform access, particularly in the US reimbursement-driven independent primary care practice market. In this case the vendor charges the clinician on a per-patient-per-month basis for a full turnkey ‘RPM as service’ model. This includes patient identification, onboarding, engagement and monitoring. The grouping of RPM platform access with clinical monitoring services will persist as a defining feature of the market, remaining in demand among buyers of RPM solutions across the provider, payer and employer ecosystem.
All the above speaks to GE’s decision to team up with AMC rather than a newer, ‘shinier’ vendor.
Greater Consolidation Inevitable
Strategic tie-ups, and acquisitions, are the logical response to overcoming market barriers for small RPM vendors that lack scale or portfolio. As we noted in our Global RPM Report, the market is already awash with M&A, VC funding and partnerships, and this will be a recurring feature of the market over the medium term.
As healthcare systems transition towards providing broader RPM services, a vendor (or group of vendors) that can offer solutions throughout the continuum of care will be well placed to flourish. We predict that acquisitions and partnerships will continue to enable core vendors to remain competitive by offering complete solutions. Furthermore, new relationships will enable new in-house solutions to be developed.
Drawing Comparisons
At first glance, the GE-AMC partnership draws interesting comparisons with Philips in the journey beyond the hospital and into ambulatory markets. Last year, the Dutch conglomerate paid $2.8B for BioTelemetry, a major remote diagnostic cardiology and RPM vendor. Press coverage at the time said Philips had paid a premium for BioTelemetry, but this was a far cry from the premium Teladoc paid for Livongo in 2020. Interestingly, Teladoc’s share price (seen as a barometer for the virtual care boom during Covid) peaked on 8 February 2021 – the day before Philips announced the BioTelemetry deal – before falling sharply (though the price has started to recover following Teladoc’s recent quarterly results).
GE, by contrast, shows no such appetite for acquisitions, even for a company of AMC Health’s credentials. GE has its own restructuring plans (and IPO) to focus on in the near future, and it is unlikely that York Capital, AMC Health’s private equity backers, would in any case have been ready to sell just 18 months after investing in AMC. Furthermore, digital health is an emerging area for GE. The company has made a number of large acquisitions in its much more established medical imaging business, and so a similar approach can also reasonably be expected in digital health down the line.
For now, it suits GE better to go down the partnership route, and see where things lead. If they work out, there’s nothing to stop York Capital cashing out (as private equity firms do) in the next four to five years. If it does, we’d imagine GE would be an interested party.
GE’s partnership with and then investment in AliveCor in the diagnostic cardiology market also offers another parallel with GE-AMC (this Insight). AliveCor has developed a clinical grade, ECG hand-held device which can be used by patients outside hospital settings. GE is the leading vendor by a big margin in the traditional, hospital-based Resting and Stress ECG markets but has achieved minimal penetration in the ambulatory market to date. However, in March 2022 it entered into a partnership with AliveCor to integrate readings from AliveCor’s devices into GE’s cardiac monitoring data platform, Muse. Then in August GE led a new funding round into AliveCor.
Playing It Safe
By partnering with AMC Health, GE is playing it safe as it navigates its entry points into RPM. Its new partner may lack the headline-grabbing funding rounds of its contemporaries, but AMC Health offers tried and tested credentials to take advantage of the massive growth forecasts for the US and global RPM markets over the coming years.
Click here for a free one month trial of Signify Research’s SPI – Digital Health service.