Digital Health

Impact of SCOTUS Healthcare Ruling on the Smart Home Market

by Harry Wang | Jennifer Kent | Jul. 1, 2015

In a 6-3 decision in King v. Burwell, the Supreme Court upheld a key provision of the Affordable Care Act (ACA, aka Obamacare). The Court ruled that the Federal Government can provide subsidies to qualified people who buy health insurance on the Federal exchanges in states where the state government has declined to set up such an exchange.

Because most ACA requirements are interconnected, the elimination of subsidies in states that have federally run exchanges would have crippled the health exchange markets and led to a chaotic transition for health insurers and healthcare providers. Without a sizable individual insurance market, hospitals would continue to see increased use of emergency care facilities from the uninsured, and insurers would see an increase in their overall risk pool as younger, healthier consumers would be the first to drop out of the insurance market.

Parks Associates predicted that a negative ruling from the Court would have had a ripple effect throughout the connected health market. Investors and entrepreneurs spearheading new healthcare programs would have experienced delays, changes, or outright cancellations because the insurers and care providers directly affected by a negative ruling are the major buyers of these new technology solutions, care management services, and consumer engagement tools. Fortunately for the industry, the Supreme Court has upheld this key piece of the ACA, which has returned a sense of stability to the market – for now. The 2016 elections offer another opportunity for the GOP to attempt to alter the ACA, though the longer it is in effect, the more difficult it will be to make drastic changes to the new healthcare system.

So how does this affect smart home players?

The smart home industry is in its infancy and currently focused on the core value proposition of home security. Resource management (reducing energy consumption, implementing smarter sprinkler system controls, etc.) is also a popular play. However, as smart home providers expand their platforms, they are evaluating the prospects of connected health, wellness, and personal safety value propositions. The aging-in-place market, for instance, is particularly attractive as the aging boomer segment represents a large market of relatively tech-savvy older consumers who may need assistance to stay in their homes. Smart home platforms can include, but also go beyond, typical panic-button services; they can assist with management of multiple medications, provide virtual consultations with doctors, and offer remote management of chronic diseases like diabetes.

These three use cases are important to care providers and insurers as well. The ACA has an incentive/penalty system in place to encourage care providers both to fill the “gaps” in care between office visits and to reduce hospital readmission rates. As long as the ACA is in place, there is potential for smart home providers to play a role in connecting consumers with care services. Of course, smart home providers are likely to compete or cooperate with many types of players trying to tackle these problems, and it’s likely that other players – device manufacturers, app developers, innovative start-ups – will play a much more dominant role. But smart home providers are actively looking for ways to add value to their platforms by enhancing the functionality and expanding their app ecosystems.

So long as there is some certainty that the healthcare system will continue to develop along the ACA model, connected home-health use cases will be an attractive crossover opportunity for smart home players to increase the value of their solutions.

At Connected Health Summit, connected health and smart home industry executives will converge to discuss recent changes in the healthcare landscape and how those impact the quickly expanding reach of the connected home. Speakers will tackle topics including patient engagement, personalization, innovation in technology, and integration challenges. Register Today.

Harry Wang

Harry Wang

Senior Director of Research

Harry Wang oversees Parks Associates’ mobility and apps research, which covers mobile/wearable devices and services, apps and APIs, and mobile commerce/marketing, payment, and connected car industries. He is also the founder and lead analyst of Parks Associates’ digital health research program since its inception in 2006. He and his team cover emerging health technologies, applications, and services in areas such as chronic/preventive care, independent living, wellness and fitness, and virtual/convenience care.

Harry has published more than 40 industry reports and white papers and presented his mobility and digital health research at numerous industry events including CES, Mobile World Congress, CTIA, Open Mobile Summit, World Health Congress, the American Telemedicine Association Annual Trade Show, and Parks Associates’ CONNECTIONS™ and Connected Health Summit conferences.

Harry earned his MS degree in marketing research from the University of Texas at Arlington. He also holds an MBA degree in finance from Texas Christian University and a BA degree in international business from Guangdong University of Foreign Studies, P.R. China.

Industry Expertise: Digital Health Products and Services, Portable and Mobile Access Platforms and Applications, Digital Imaging Products and Services

Jennifer Kent

Jennifer Kent

Senior Director

As Senior Director, Research Quality & Product Development, Jennifer manages Parks Associates' process for producing high-quality, relevant, and meaningful research. She acts as an internal advocate for Parks Associates clients and leads the company’s efforts at conceptualizing and implementing digestible, relevant research presented in an optimal manner. Jennifer is always looking at the most effective ways to provide research to Parks Associates clients.

Since joining Parks Associates in 2009, Jennifer has worked on the mobile and health research team, specializing in the connected health, mobile payment, and connected car markets, as well as the consumer research team, analyzing consumer data related to the connected home and consumer electronics markets.

Jennifer earned her Ph.D. in religion, politics, and society and an M.A. in church-state studies from Baylor University. She earned her B.A. in politics from the Catholic University of America in Washington, D.C.

Industry Expertise: Digital Health Products and Services, Portable and Mobile Access Platforms and Applications

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