Smartwatches are rising in popularity, and that trend is likely to continue, especially as they gain more features. One industry that could benefit the most from wearables is healthcare, where smartwatches could change the way doctors monitor and keep track of patients, all while maintaining a safe distance. Here's a look at how wearable devices like smartwatches could change the healthcare industry for better (and worse).
New Apple watches can help doctors monitor patients from afar
Apple (AAPL 1.56%) is the industry leader when it comes to smartwatches. During the first quarter of 2020, the company shipped out 5.2 million smartwatches -- more than one-third of total smartwatch shipments. So when Apple makes changes to its smartwatches, its competitors take note.
On June 22, Apple issued a press release stating that its latest smartwatch software, watchOS 7, will add a number of health and wellness features. In addition to helping users track their sleep and ensuring they're washing their hands for long enough, the new technology also tracks mobility metrics. This includes walking speed and a variety of other metrics aimed to help medical professionals monitor a patient's mobility.
One metric doctors use to gauge a patient's recovery and health is how far a patient can walk in six minutes, and that new smartwatch software helps to track that.
This could be just the start
Tracking motion is one thing, but researchers from the University of California recently designed an adhesive film that could soon give smartwatches even more information. The double-sided film is able to attach to a smartwatch and detect and analyze molecules that are present in body sweat.
A smartwatch could then use that information and display even more metrics to its users. For example, doctors could monitor a patient's metabolism by assessing glucose and lactate, information that the adhesive film could help collect.
And that's just one example. On July 6, Abbott Laboratories (ABT 2.20%) announced it had received approval from the U.S. Food and Drug Administration (FDA) for its Gallant devices, including implantable cardioverter defibrillators and cardiac resynchronization therapy defibrillators, which help monitor and correct a patient's heart rhythm. But what makes the devices unique is that they utilize Bluetooth technology that makes it easy to track the information through an app.
Smartwatches are undoubtedly less intrusive than most medical devices, especially those that need to be implanted. But regardless of how the data is collected, doctors, patients, and perhaps even health insurance companies could soon have access to much more health-related information.
There could be a downside to all of this
When more information is made available, it usually comes at the cost of privacy.
Health insurance company Aetna, which is now owned by CVS Health, offers an app, Attain by Aetna, which is available on the Apple Watch and that rewards users for meeting healthcare-oriented goals. The app also helps patients find low-cost testing centers if they need MRIs or other diagnostic tests. It's a harmless app that helps encourage people to stay fit while making it easier for them to access certain healthcare services.
But as more information is available on a smartwatch, that could give health insurance companies access to more data, especially if they cover the cost of those smartwatches in their plans and require the healthcare metrics to help assess a patient's individual risk. And for someone with less-than-ideal health metrics on their smartwatch, that could result in higher health insurance premiums.
It also means more sensitive data out there in cyberspace that companies will need to safeguard.
What does this mean for investors?
From an investment standpoint, it's clear that the industry is headed toward more remote data. And that makes companies like Apple and Abbott appealing investments, as they're making devices that can benefit from that trend.
Smartwatches look as though they'll be leading the charge in the change toward remote healthcare monitoring, and other devices will likely follow suit. Investing in companies, especially those in the healthcare industry that are already making these next-generation devices, could pay off over the long haul.
Shares of Apple and Abbott are outperforming the S&P 500 and its 1% gains so far this year, rising 31% and 16%, respectively.