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Baby Boomers: Here’s How Digital Health Tools Can Save You Money – And Save Your Life
Tuesday, July 8, 2014

Baby Boomers: Here’s How Digital Health Tools Can Save You Money – And Save Your Life

The digital health revolution could not be arriving at a better time. The U.S. population is getting older, sicker, fatter and more sedentary. As the population ages, and the number of people with serious chronic conditions grows, the financial strains on the economy mount. These are mammoth issues, which defy easy solution.

That said, there are promising new digital health tools that provide cost-effective options for monitoring patients and promoting better health habits. The most successful devices in this market to date play on the “quantified self” trend, tracking how many hours we sleep and how many steps we take every day. But the opportunities run far deeper – and entrepreneurs are actively working on new technologies that are more engaging, utilizing tools that allow consumers to make tracking their health a daily habit.

While dire predictions about the nation’s health and the sustainability of the U.S. healthcare system have been circulating for years, the worries are increasing in both frequency and fervor. Of particular concern is the aging of the roughly 76 million members of the Baby Boomer generation, those born between 1946 and 1964. As a group, Boomers are significantly less healthy than those who came before them. And that could have severe consequences for us all.

Boomers have higher rates of chronic disease and lower self-rated health than members of the previous generation at the same age, according to a 2013 JAMA Internal Medicine study. Obesity is significantly higher amongst Boomers (38.7% vs. 29.4%); rates of hypertension, diabetes and hypercholesterolemia also are higher. Boomers exercise less than the previous generation (35.0% vs. 49.9% exercise more than 12 times a month). Half of all Boomers report zero regular physical activity.

Forecasters say the number of Boomers with multiple chronic diseases will quadruple by 2030. Note that chronic conditions account for nearly 75% of total healthcare spending. Also sobering: it costs, on average, up to 7x more to treat a patient with multiple chronic conditions than one with a single condition.

This situation has dire implications for taxpayers. Each day for the next 15 years, 10,000 Boomers will turn 65 and become eligible for Medicare. That’s more than 3 million new beneficiaries a year. When the last of the Boomers turns 65 in 2030, nearly 20% of Americans, or some 80.9 million people, will qualify for coverage, up from 14% of the population now.

To offset the additional costs, individual financial responsibility for care will increase. Today, roughly 86% of Medicare beneficiaries have supplemental coverage, a number that will likely grow over time. More than half of the top quintile of healthcare spenders have out-of-pocket expenses topping 10% of family income.

Despite the grim outlook, there is reason to believe Baby Boomers could save the system rather than break it. Boomers are far more connected, engaged and tech savvy than previous generations. If you believe digital technology can transform the healthcare industry and that aging adults will have strong financial incentive to adopt it, then there is reason for optimism.

Let’s take a look at a few current digital health products that have the potential to improve healthcare outcomes and patient satisfaction while lowering costs.

• Activity and nutrition tracking could help stem the obesity epidemic. A recent Pew survey found that 68% of adults 50 to 64 track their weight, diet, exercise routine or other health indicators, although not necessarily online. Companies like Jawbone* and FitBit have introduced intuitive and accurate activity tracking tools that are being adopted rapidly. In 2013, the number of steps taken by FitBit users reached 2.4 trillion – roughly the distance from the Earth to Saturn – up from 47 billion in 2011. MyFitnessPal*, a calorie-counting app that is growing users at a 50% annual rate, today has 65 million people registered; together they have lost over 100 million pounds.

• Telemedicine and advanced sensor technology can improve management of chronic care patients. Baby Boomers want to remain independent for as long as possible. A recent AARP study suggests that 90% want to stay in their homes as they grow older; 82% would prefer to age in place even after they need daily assistance. Digital health technology will help make that possible. A 2010 study conducted at Tufts Medical Center found that the cost of four days of in-hospital heart monitoring (~$25,000) could be reduced by up to 72% through the use of telemedicine and remote monitoring. Savings from using services like Doctor on Demand ($40 per visit) or Teladoc* for regular visits and consultations can be substantial as well.

• Cost transparency tools can meaningfully address system-wide financial pressures. Today, the price and quality of care can vary greatly by location. An analysis in the California Bay Area found prices for a CT scan to vary by a factor of 16, and knee arthroscopy by a factor of 10. As aging adults assume increasing responsibility for healthcare costs, they will embrace tools like those developed by Change Healthcare, Castlight Health and ClearCost Health that provide objective cost data to make better, more informed care decisions and save money for both payers and themselves.

So do the aging Boomers represent a beacon of hope – or will they break the bank? The answer will depend, at least partially, on their adoption of digital health tools. With increasing financial incentives and a demonstrated proclivity to embrace engaging, smart and intuitive technology, I am more optimistic than ever before.

*Disclosure: Jawbone, MyFitnessPal and Teladoc are KPCB portfolio companies.

Beth Seidenberg, M.D., is a general partner with Kleiner Perkins Caufield & Byers, focused on life science and digital health investing. Before joining the firm in 2005, she worked at a number of pharmaceutical businesses, mostly recently as chief medical officer at Amgen.