The Unlikely Leader of the Next Health Care Revolution

It usually takes years to become an overnight success. The world of health care should see this maxim at work soon with a technology that many have predicted for years would be huge -- telemedicine.

I recently attended the annual meeting of the American Telemedicine Association, or ATA, which is the largest gathering in the world focusing exclusively on telemedicine, mHealth, and telehealth. Based on the technology now available combined with economic and political winds changing, I suspect that the time for this technology to disrupt health care in a major way has finally arrived.

Here's why the telemedicine revolution hasn't taken off yet but looks primed to do so now -- and why Qualcomm (QCOM -0.85%) now stands as perhaps the most prominent and unlikely leader of this revolution.

A long road to the revolution
Telemedicine certainly isn't new. The ATA was founded way back in 1993, when the word twitter referred only to sounds that birds make. At least 20 years before that, some hospitals were using remote technology to provide care to patients in remote areas. 

The technology has seen considerable successes. The U.S. Veterans Health Administration operates a massive telemedicine program that monitors more than 50,000 veterans, most of them with chronic conditions. This program has reduced hospital stays by 25% and admissions by 19%. And patients like it, with satisfaction ratings of 87%.

Despite this long and often impressive track record, telemedicine still isn't used nearly as widely as you might expect. Technology research firm Gartner found that most projects currently under way are still in the pilot stage. Few, says Gartner, have achieved a level where benefits clearly outweigh the costs.

The problem isn't technological, though; it's largely political. Money is the root of much of the lack of progress. Many applications for which telemedicine could be used aren't reimbursed. If hospitals and physicians don't get paid to do something more efficiently, they're not going to do it. Regulatory hurdles also frequently prevent physicians in one state from providing care in another state unless they obtain multiple credentials.

This situation appears to be changing. A California congressman is pushing passage of a bill that would promote reimbursement for telemedicine and clear some of the regulatory roadblocks for providers. Nineteen states now have laws that require private insurers to cover telemedicine services. Four of those states enacted these laws just last month. 

Unlikely leader
Mobile technology giant Qualcomm, perhaps sensing that the tide was turning, formed a new business unit, Qualcomm Life, in late 2011. The new subsidiary's mission was to focus on remote health management and market its new 2Net cloud platform for capturing biometric data from medical devices and delivering that data to the cloud. Judging from the industry reaction to Qualcomm's platform, that mission is succeeding. 

At least 18 medical applications, 49 medical devices, and 80 service providers have aligned themselves with Qualcomm's platform in a little more than a year. At the ATA show in Austin, Texas, Qualcomm partnership signage was prominently displayed at vendor booths throughout the exhibit floor. And that's not counting the 17 different companies that demonstrated their products inside the large Qualcomm booth. Other organizations with longer tenure in telemedicine would appear to be more likely candidates for industry leadership, but Qualcomm has quickly and somewhat quietly taken the most prominent position.

It's not surprising that leading online health information provider WebMD (WBMD) chose Qualcomm recently as its partner in building a expansive new offering. WebMD plans to integrate digital health apps and third-party devices across various disease categories and lifestyle interests to target consumers and physicians.

My take is that Qualcomm has rapidly established itself as the de facto standard for connecting with medical devices. The company isn't doing it alone, though. It teamed with Ingram Micro (IM), the world's largest technology distributor, to support the implementation, logistics, and financial services related to the 2net hub and platform. This partnership should help propagate Qualcomm's technology more effectively than the company could have done on its own.

A perfect storm
In some ways, a perfect storm seems to be happening for telemedicine. Reimbursement and regulatory obstacles could be moved out of the way soon. Demand is building for solutions to health care provider shortages and for controlling medical costs. Health reform is pushing hospitals to reach patients outside their walls increasingly more to reduce readmissions. The technology is better than ever before.

ATA CEO Jonathan Linkous thinks that use of telemedicine will double within the next few years. Research firm InMedica projects a six-fold increase in telemedicine and related technologies by 2017. I suspect they're both correct.

Telemedicine will revolutionize health care. In doing so, it will create tremendous opportunities for companies leading the way -- like Qualcomm and a few others -- as well as their investors. This slowly unfolding revolution is primed and ready for its "overnight success."