A New PwC Survey Looks at the Explosion in Consumer Adoption of Wearables—Now, What Are the Implications for Providers?

Oct. 4, 2016
What are the implications for healthcare and healthcare IT leaders of the surging interest among consumers in wearable devices? PriceWaterhouseCoopers’ Vaughn Kauffman discusses the results of a just-released PwC survey of consumers

What are the implications for healthcare and healthcare IT leaders of the surging interest among consumers in wearable devices? There are many, even as the current wave of interest in Fitbit, Apple Watch, Google Glass, and many other wearable devices—whether those devices are fitness trackers and fitness bands, smart glasses, smart watches, smart clothing, or any of a number of other emerging personal technologies.

Leaders at PwC (PriceWaterhouseCoopers) released a study on May 12, based on a survey of consumers around wearable devices. The study, entitled “The Wearable Life. 2.0: Connected living in a wearable world,” was authored by a team of PwC industry analysts, and produced as part of the New York-based consulting firm’s “Consumer Intelligence Series.”

The study was based on the findings of a 1,000-respondent online quantitative survey conducted online in March 2016.  According to a PwC spokesperson, “The first 700 respondents were fielded without a quota for wearable technology users in order to obtain natural incidence of ownership. The remaining 300 respondents were terminated as necessary in order to reach the 50-percent quota.” Meanwhile, responses were adjusted to match the demographics of the U.S. population for ethnicity and race, as well as for gender (50 percent male, 50 percent female), and also adjusted for age, with 50 percent of the final sample being consumers 18-34 years old, and 50 percent being 35-64 years old.

Among those consumers surveyed:

>  45 percent own a fitness band
>  27 percent own a smart watch
> 14 percent own a smart video or photo device (such as GoPro)
> 12 percent own smart clothing

Meanwhile, 57 percent of consumers said they are excited about the future of wearable technology as a part of everyday life—up from 41 percent who said so in 2014.Also, 88 percent that wearable technology helps us exercise smarter (88 percent), helps parents keep their children safe (87 percent), relieves stress (81 percent), and makes us more efficient at home (80 percent) and at work (78 percent), with all of those percentages up from 2014.

At the same time, concerns of the use of wearable technology are falling, even as positive perceptions of wearables are rising. In this latest survey, consumers were less likely to agree that wearable technology will make us more vulnerable to security breaches (down 8 points from 2014), will invade our privacy (down 7 points), or hurt our ability to relate to other humans (down 4 points).

What’s more, the percentage of survey respondents saying that wearable technology would increase social interaction tripled between 2014 and 2016, going from 10 percent who said so in 2014, to 33 who said so this year.

Still, amid all this enthusiasm, there were some countervailing results as well. Over time, fewer consumers use their wearables daily. Consumers report a 33-percent decrease in wearing their smart clothing daily; a 22-percent decrease in wearing their smart watches daily; an 18-percent decrease in wearing their fitness bands daily; and a 16-percent decrease in wearing their smart glasses daily. As the report notes, initial enthusiasm can fade because of the lack of perception of a pressing need for their devices; the fact that some devices are easy to lose, or are unattractive or uncomfortable; the fact that they have a short-lived battery life; or because they don’t sync seamlessly with the smartphones they own. As the report’s authors note, “For consumers to commit to wearables for the long term a device, should not only be attractive and comfortable, but should also reach beyond data delivery to provide knowledge and benefits unavailable elsewhere.”

What factors do motivate consumers to make use of their wearables? The following were the most-cited motivators:

> A device has features that reward the frequent user of that device with monetary rewards (54 percent)
> A device has a gaming feature that allows the user to compete with others (45 percent)
> A device provides a consumer with information that that consumer would not otherwise have (45 percent)
> A device allows the consumer to cut back on spending (44 percent)
> A device has apps or features that reward frequent users with loyalty points (43 percent)
> A device looks good and coordinates with the user’s wardrobe (36 percent)

As the report’s authors note, “For a wearable to be ‘sticky’ in tech parlance, it needs monetary or other rewards attached to it. Like loyalty points. That’s what eight out of 10 current users—particularly women and millennials—told us. Meanwhile,” they add, “accountability is a major benefit of fitness devices. Wearables enable social connections for support in achieving fitness goals. And foster healthy competition, which is especially appealing to males and millennials. The ultimate connected device,” they add, “is a wearable with smartphone connective: 78 percent of respondents with a smartphone-connected wearable say they use it more frequently precisely because of that connectivity. And a whopping 97 percent are satisfied with the smartphone application supporting their device.”

Importantly, by 2020, more than 75 million wearables will permeate the workplace, the report notes, quoting the research firm Tractica. The authors also make note of research estimates from Gartner that state that, “By 2018, 2 million U.S. employees will be required to wear health and fitness tracking devices as a condition of employment” (italics those of the authors).

Important statistics around perceptions in healthcare

Perhaps one of the most significant sets of results from the survey, when it comes to the implications of all this for healthcare leaders, is this one. When asked both how excited they would be to receive a wearable device from a particular entity, versus how much they would trust a product provided by that entity, the results were as follows:

> Doctor’s office: 65 percent excited, 41 percent would trust
> Hospital: 62 percent excited, 38 percent would trust
> Health insurer: 62 percent excited, 34 percent would trust
> Cellphone provider: 61 percent excited, 18 percent would trust
> Pharmacy: 57 percent excited, 29 percent would trust
> Teacher: 57 percent excited, 12 percent would trust
> Entertainment provider: 57 percent excited, 10 percent would trust
> Travel agent: 56 percent excited, 8 percent would trust
> Cable provider: 52 percent excited, 11 percent would trust
> Bank: 52 percent excited, 33 percent would trust
>  Car company: 50 percent excited, 9 percent would trust

So—which wearable devices are consumers actually planning to buy in the next 12 months? They are as follows:

> 57 percent: fitness band
> 53 percent: smart watch
> 50 percent: smart video/photo device (e.g., GoPro)
> 41 percent: smart glasses
> 38 percent: smart clothing

Looking at this trove of data, HCi Editor-in-Chief Mark Hagland spoke this week with Vaughn Kauffman, a global practice leader in PwC’s Health Industries Advisory. His practice focuses on the healthcare ecosystem and on value propositions for brands adjacent to the healthcare industry. Kauffman’s recent work includes examining health care reform and the advancements in health care information technology and social influences to identify ways to achieve efficiencies across the health care value chain and improve the quality and accountability of care. He was not one of the authors of the report, but has analyzed the survey’s findings in his work in the Health Industries Advisory unit. Below are excerpts from their interview.

To begin with, the adoption rate of healthcare consumers, as found in this survey results are quite high. Your colleagues found that 45 percent have a fitness band, 27 percent have a smart watch, 14 percent have a smart video or photo device, and 12 percent have smart clothing. Those adoption rates seem quite high, don’t they?

Some of those findings, I was a bit surprised by, too. We did a similar survey in 2014, and back then, we found that about 21 percent of consumers reported that they owned at least one device. So the rate of adoption has more than doubled in two years.

Vaughn Kauffman

Do you have any thoughts on that?

We’re definitely seeing more types of wearable devices being offered to consumers, and there’s still a great emphasis on tracking basic health information. So I think it’s certainly a function in the increase in the number of devices and in the number of companies offering devices, as well as better integration with smart phone functions. And there are other elements, with regard to integration with tablets, and the like. But it is interesting to see in the past two years, more than a doubling effect. And how much is data usage changing, from a healthcare perspective?

What are employers doing? What’s the trend there? I was surprised to see the percentage of employers expected to require their employees to wear devices.

I sort of put these wearables in the category of employers looking at ways to continue to drive down the cost of providing care, especially for those employers that are self-funded. Certainly, the focus around helping employees to manage their chronic diseases, such as diabetes. And when you look at where CMS [the federal Centers for Medicare & Medicaid Services] is going with Medicare, to start to reimburse for prevention, around diabetes, that that has implications for wearables adoption, because wearables provide a really interesting platform for engagement. How do we get consumers to change behaviors? Can these platforms engage consumers who are going down a path towards diabetes and other chronic illnesses? So we’re going to continue to see an increase in employers looking for wearables to play a role there.

What are some of the implications for physicians and other clinicians in the healthcare system, of this increasing adoption, on the part of consumers?

Obviously, wearables have been associated with tracking health and fitness information. On the provider side, I still see a bit of apprehension around taking in that data, per, what happens if they don’t act on that data? So there’s a bit of a concern over risk management there. So the first set of questions around wearables is, how was that data captured, what was the context, etc.? So there’s a whole host of implications. And even if providers take that data in, there is a bit of apprehension around whether they might be held legally liable for having that data from patients. But from the population health standpoint, there is a potentially dramatic set of results when it comes to consumer-facing devices.

And the ability to do the readings is becoming more accurate, because you’re beginning to put in additional sensors that aren’t just on the wrist, for example. So it becomes a channel through which a physician can interact with a patient, including at a lower cost. So in a way, that creates a real-time dialogue with the individual. And you can tell from our research that the consumer is already there, with regard to their willingness to engage. And some providers are further down the road than others around utilizing these kinds of data for engagement. There’s the potential to extend the doctor-patient relationship to beyond the direct doctor visit interaction. And obviously, this would involve individuals opting in, as opposed to kind of a Big Brother phenomenon.

But plenty of providers have begun to explore this already. What’s interesting is how to interact with individuals who are healthy. I’ve talked to my doctor and asked, do you want it? (This data) And the answer usually is, I don’t know how to ingest it, plus, what is the accuracy of the devices, etc.

Do you have any thoughts on how the process of ingesting and using the data might work, among the healthcare IT professionals leading such processes in their patient care organizations?

Well, my first question goes beyond the wearables themselves. If we look at how health data is being generated, no one entity is going to be able to generate all the right data from within their four walls. There will have to be data coming from outside the four walls of a hospital. Some might be from the EHR, some might come through R&D, some might come via retail data. There will be many sources. So if I’m a CIO of a health entity, the question is, how will I manage all the different types of information, to make sure I’m setting the right sets of data in front of the decision-makers, whether it be frontline clinicians, or anyone. It is an important one to talk about in the context of wearables, but it’s broader.

So IT leaders in healthcare data will have to create entire ecosystems of data?

Yes, and some of that will come from outside their four walls. And retailers, telecom providers, and other players, will all become involved. You talk to a retailer—either retail pharmacies or retailers that carry health-related items—whether food, pharmacy, dietary products—they’re gathering data about consumer purchases as they’ve all done. So if I’m a physician and I have a patient, after they go off from a visit for the next six months, they’re interacting with an entire community, and how do I get a good view of that patient while they’re interacting WITH THEIR community? So it could be a wearable device, a community health center, a grocery store—those are all data sources.

So if the problem to solve is interconnectivity with sources of data from outside the four walls of my organization, if I figure out how to solve one problem, I’ll figure out how to solve all of them, around interconnectivity.

Is there anything you’d like to add?

You know, I think that what the data suggests to me when I look at it compared to two years ago, is that the consumer continues to outpace the industry in terms of willingness to adopt. We talk about the increasing importance of the consumer in health, and this confirms the increasing role that consumers will play in leveraging wearables to address issues, including obesity and other problems. So there is this belief that wearables will play an increasing role in managing health. The burden is on the industry to figure out how to leverage all of this. So yes, it’s always difficult to capture a particular audience; but the consumers are willing to move into this area, so we should get over the concerns about their willingness to be involved. And I’ve talked about wearables in the past. And we sometimes have to look outside the US to see where trends are happening. In some countries outside the US, they have to leverage wearables, to create that access.

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