Connect America’s Summer Acquisitions Reflect a Shake-Up in Home Healthcare

This summer, Connect America—the U.S.  connected senior home care company—set about strengthening and expanding its offerings by acquiring a key competitor in its traditional business and a startup that extends Connect America’s operations into medical monitoring. In July, Connect America acquired its key rival and North American Personal Emergency Response System (PERS) market leader Royal Philips’s Aging and Caregiving business for an undisclosed sum. The following month, Connect America acquired the Remote Patient Monitoring (RPM) company 100Plus. The first deal speaks to competitive pressure and consolidation in the long-standing PERS market while the second points to the future of home healthcare. Reflecting the momentum and potential for this market, ABI Research has extended its Smart Home Research Service to include home healthcare.

Connect America’s acquisition of Philips’s business unit includes the Philips business Lifeline PERS. Lifeline PERS delivers emergency communications to a care specialist through a 24/7 monitoring service. The long-standing basic offerings—typically for seniors—support a panic-type button or a wearable device. This device can detect falls and also opens up communications with the call center. This acquisition includes Philips’s smart medication dispensing monitoring device and service. Philips will maintain an equity stake in the company.

100Plus focuses on senior care but with a connected RPM suite of devices. Their back-end system enables patients and physicians to communicate patient behavior and key medical parameters and is designed to improve the health outcomes of senior patients and to deliver more efficient engagements. The 100Plus system bundles devices including a blood pressure cuff, a glucose monitor, a weight scale, a pulse oximeter, a thermometer, and a wearable activity tracker/fall detector. These devices are preconfigured and communicate to 100Plus’s monitoring system through cellular connectivity embedded in each device. On the back end, 100Plus has developed an artificial intelligence integration to track patient behavior and to enable physician alerts. 100Plus launched its RPM bundle in April 2020 after the company had raised US$15 million during 2019 from venture capital firms that include 8VC.

The societal demand to drive-in home healthcare and its technical capabilities have been getting stronger for years. However, adoption has been stifled by a range of factors:

• Lack of awareness/unproven solutions: While cost and inefficiencies related to managing an aging population with traditional outpatient strategies have been clear, the impetus to fund and test new approaches has been limited.
• Structural change required within healthcare: Healthcare providers and their patients needed to be convinced that shifts to focus on long-term remote care can be made without impacting the quality of care or working practices.
• Changes to reimbursement: How to charge and who would pay for new remote care provisions have been unclear; consumers were often left to pay the bill.
• Entrenched providers: The PERS industry has long been well understood and financially rewarding, bringing in new functionality and requiring significant investment from PERS players who risk losing existing revenue lines.

Many of these barriers are now lifting. The necessity to engage with patients remotely throughout the COVID-19 pandemic has given a boost to the potential for remote care in healthcare services. Healthcare providers have embraced a range of new approaches in delivering care, proving that remote services can integrate with existing healthcare practices. In 2018, the American Medical Association issued five CPT codes for RPM services—a key factor for monitoring services as they set out criteria for setup and recurring monthly payments for RPM. This year, an additional code was added to support remote therapeutic monitoring.

With its two acquisitions this summer, Connect America’s evolving strategy emphasizes that the home healthcare market is entering a key period of investment and adoption. However, that development also threatens existing PERs players, highlighting the need for players in the market to expand and develop their own home health monitoring offerings.

PERS has always supported strong Recurring Monthly Revenue (RMR) but typically for relatively short-term contracts. PERS faces pressure from emerging Ambient Assisted Living (AAL) services that also offer RMR but for longer-term care. While AAL has struggled for acceptance over the past decade, the commonality between smart home equipment and smart home services will bring a new wave of service providers into the market, further impacting PERS offerings. Philips’s decision to quit the market highlights the challenges these companies face—even for a company that is a leading player increasingly focused on wider remote healthcare provision.

Some PERS players have been adding AAL services to their offerings—most notably, GreatCall acquired AAL player Lively in 2015 and subsequently announced in May its rebranding as Lively. In 2018, GreatCall was itself acquired for US$800 million by the electronics retailer Best Buy as it expands PERS and AAL services into the retail setting.

Connect America’s deal with 100Plus takes this integration further into RPM capabilities. RPM is a space that has already started to shift. Ideal Life—a stalwart in the RPM space—was acquired in March 2020 by fellow remote care player Raziel Health.

Increasingly, the ability to support a range of services from PERS through AAL and into RPM will be the key to any home health services players seeking RMR. For example, 100Plus notes that its offerings are free to Medicare patients while service providers can realize approximately US$720 per patient per year in revenue with the program. Connectivity is key to all these offerings, but the ability to develop, integrate, and offer these services is not trivial, and neither will it be easy to target and appeal to a broad array of potential customers—from consumers to service providers to payers and even to healthcare providers. Customers will determine how this market develops.

Key value and disruption are set to take place in the home healthcare market, and that development will take place within the wider market of smart home and smart city developments. This has prompted ABI Research’s Smart Home Research Service to deliver expanded coverage that includes PERS, AAL, and RPM devices and services within a new dedicated market data report. Forecasts in this report cover device and service shipments and revenues and can be found in the latest publication, Smart Home Healthcare (MD-HAHC-101).