Medicine's Next Big Battlefield: Your Home

Cardiac medicine is moving to the home: An implanted electronic device constantly monitors a patient's well-being. Software makes a potentially life-saving prediction and, through a wireless network, alerts the doctor to the urgent problem. The device adjusts treatment as ordered by the physician on the other end.

Such wireless networks, known as telehealth or remote patient monitoring, are not only advancing care, they're turning into marketing tools that companies can use to sell surgeons on their pacemakers and other implanted cardiac devices (ICDs). The pitch? Home-monitored patients should have fewer health problems, but only those with compatible implants can sign up for each provider's service.

Medtronic (MDT) dominates the cardiac telehealth market with its CareLink patient network. Launched in 2002, it boasts 350,000 patients in 20 countries, with 12,000 more enrolling each month. But the company's lead may narrow. St. Jude Medical (STJ) is now rolling out the latest update of its competing network. The new product should help St. Jude grab 5 to 7.5 percentage points of the global $6.5 billion ICD market over the next five years, projects UBS Securities (UBS) analyst Bruce Nudell.

Marketed as an all-in-one package, St. Jude's Merlin line includes several implanted devices that connect to, an Internet-based repository from which authorized doctors have access to patient information. The third version was approved by the U.S. Food & Drug Administration on Mar. 22.

Market-Share Fight in Western Europe

The new software can combine hundreds of measurements taken from medical devices with other information stored in electronic health record databases such as Microsoft's Health Vault (MSFT) and Google Health (GOOG) to predict changes in a patient's health. St. Jude, based in St. Paul, Minn., says the system also has better doctor alerts and comes in more languages. The network is a free service to those with enabled devices.

(On Apr. 7, the Merlin products won a Medical Design Excellence Award; to see other winners click here.)

St. Jude began selling the network across Western Europe in late April. Though Medtronic's CareLink is already on the market in Europe, St. Jude beat Boston Scientific (BSX). So far, the $4.36 billion company has signed on more than 40,000 patients and 1,200 clinics, with patient enrollment growing 17% month over month and clinic enrollment growing 19%. "St. Jude is continuing to advance toward the cutting edge of technology and should gain the most share in 2009," says Christopher Warren, an analyst at Caris & Co. in New York.

Medtronic, though, doesn't seem too worried about St. Jude's advance. The Minneapolis company had $13.52 billion in 2008 revenue and commands about 45% of the global ICD market, with the other 55% split almost evenly between St. Jude and Boston Scientific. Having Europe well covered, Medtronic plans to introduce CareLink to another 10 countries this year. (It's also free for patients with a Medtronic device.)

Medtronic says its head start and scale give CareLink an edge. Users have provided 4 trillion pieces of health data, enabling Medtronic to write better algorithms to keep watch on patient care. "There's always been someone coming after us, but we have been the leader and will continue to be," says Pat Mackin, Medtronic's senior vice-president of cardiac rhythm disease management.

Awaiting the Stimulus Impact

While companies have been expanding into telehealth for some time now—Boston Scientific began its Latitude Patient Management System in 2004, with St. Jude following in January 2008­—the pace may pick up. President Barack Obama's economic stimulus package includes $19 billion for health information technology. The idea is to reduce health-care costs by replacing cabinets of paper charts and files with easy-to-access electronic records and to provide doctors with a more holistic view of each patient's health.

Exactly how much money will be funneled into telehealth ventures hasn't been determined yet, but the funding could encourage more doctors and hospitals to join remote monitoring networks. Says Darren Selsky, St. Jude's director of connectivity and market research: "There's a huge push right now to get this stuff moving forward."

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