1 Medical Needs for the Electronics Industry; Market Analysis and Electronic Roadmap Needs. Terrance J. Dishongh, Ph.D. Support from: Intel (Brad Needham,

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Medical Needs for the Medical Needs for the Electronics Industry;Electronics Industry;

Market Analysis and Market Analysis and Electronic Roadmap Needs.Electronic Roadmap Needs.

Terrance J. Dishongh, Ph.D.Terrance J. Dishongh, Ph.D.

Support from:Support from:Intel (Brad Needham, Eric Dishman, Jay Lundell, Margie Intel (Brad Needham, Eric Dishman, Jay Lundell, Margie

Morris), Plexsus (Bill Bartel), 3M, ITF, Morris), Plexsus (Bill Bartel), 3M, ITF,

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Elder care is returning home againElder care is returning home againPoor Houses / AlmshousesPoor Houses / Almshouses

““pauper”pauper”

Insane AsylumInsane Asylum““inmate”inmate”

HospitalHospital““patient”patient”

Assisted LivingAssisted Living““resident”resident”

HomeHome““grandma”grandma”

Nursing HomeNursing Home““senior citizen”senior citizen”

HomeHome““grandma”grandma”

Only way to save costs but Only way to save costs but increase quality is home care.increase quality is home care.

Home care is fastest growing Home care is fastest growing segment of health industry.segment of health industry.

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Percentage of Population over 60 years old

Global Average = 10%

Percentage of Population over 60 years old

Global Average = 21%

20022050

SOURCE: United Nations ▪ “Population Aging ▪ 2002”

To care for an aging planetTo care for an aging planet

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Worldwide age wave is comingWorldwide age wave is coming

Today…Today…

34 million elders in U.S.34 million elders in U.S. 550 million worldwide 550 million worldwide 5 U.S. workers to 1 retiree 5 U.S. workers to 1 retiree 3 Japan workers to 1 retiree 3 Japan workers to 1 retiree

By 2025…By 2025…

74 million elders in U.S.74 million elders in U.S. 1.2 billion worldwide 1.2 billion worldwide 3 U.S. workers to 1 retiree 3 U.S. workers to 1 retiree 2 Japan workers to 1 retiree 2 Japan workers to 1 retiree

Other facts…Other facts…

80+ years old is fastest growing80+ years old is fastest growing “old old” are 2 women : 1 man “old old” are 2 women : 1 man

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Nurses/caregivers in short Nurses/caregivers in short supplysupply

Source: Bureau of Labor Statistics, pub in CNN/Money.com, “Where the jobs will be Greatest employment growth is likely to be in service industries, according to new labor study.” By Jeanne Sahadi, Feb 13, 2004.

“The 10 fastest-growing occupations include medical assistants, jobs for whom are expected to grow by 59 percent, or 215,000 new jobs; network systems and data communications analysts, positions for whom the BLS expects to jump by 57 percent, or 106,000 new jobs; and physician assistants, for whom the BLS projects a 49 percent rise, or 31,000 new jobs.”

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““The biggest growth in health-The biggest growth in health-care spending these days isn't care spending these days isn't coming from today's elderly. coming from today's elderly. It's coming from tomorrow's It's coming from tomorrow's elderly -- the baby boomers elderly -- the baby boomers and their younger siblings.”and their younger siblings.”

““Per capita spending among Per capita spending among Americans aged 30 to 50 rose Americans aged 30 to 50 rose more than 75% between 1987 more than 75% between 1987 and 2000.”and 2000.”

Source: WSJ: “Tomorrow's Elderly Fuel Health-Care Spending And Strain the System” 1-25-04

Boomers spending big on healthBoomers spending big on health

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The global challenge simply The global challenge simply putput

Increase the quality of care & of life…Increase the quality of care & of life… for twice the number of seniors…for twice the number of seniors… while reducing healthcare costs.while reducing healthcare costs.

- Current healthcare system is optimized for treating Current healthcare system is optimized for treating disease; innovation is clinic-and-pharma centricdisease; innovation is clinic-and-pharma centric

- Have to invent system optimized for wellness (prevention, Have to invent system optimized for wellness (prevention, early detection, compliance, caregiver support)early detection, compliance, caregiver support)

- Must put technologies into everyday lives of people; must Must put technologies into everyday lives of people; must put the home, consumer, & informal caregivers “in the put the home, consumer, & informal caregivers “in the loop” and offload formal institutions when appropriateloop” and offload formal institutions when appropriate

- It will take decades to achieve, but must start R&D It will take decades to achieve, but must start R&D (research & debate) now if we ever hope to get there(research & debate) now if we ever hope to get there

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Worldwide healthcare crisis is hereWorldwide healthcare crisis is here

- Every major world economy has health as biggest percentageEvery major world economy has health as biggest percentage- Nursing shortage in many parts of the worldNursing shortage in many parts of the world- South Korea and Japan technology infrastructureSouth Korea and Japan technology infrastructure

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“Healthcare’s costs, coverage problems and demographic pressures mean system overload; it’s formal institutions can’t cope with the future. What will ease the pain? A major shift, enabled by technology, to self-care, mobile care, home care.

- Forrester Report, Dec 2002

Result: Home care inflection pointResult: Home care inflection point

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Market AnalysisMarket Analysis Prismark estimates that medical electronics Prismark estimates that medical electronics

equipment production will be $39.5Bn in 2004, equipment production will be $39.5Bn in 2004, accounting for about 4% of the global electronics accounting for about 4% of the global electronics industry. industry.

This market is expected to continue to increase at This market is expected to continue to increase at an average rate of 4.4% per year through 2008. an average rate of 4.4% per year through 2008.

Growth is primarily driven by the worldwide Growth is primarily driven by the worldwide demographical shift to an older population, which demographical shift to an older population, which indicates a continuing increase in medical care indicates a continuing increase in medical care spending. spending.

Medical care is already the single largest Medical care is already the single largest component of the US GDP. component of the US GDP.

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•Prismark estimates that 62% of medical electronics equipment will be assembled in the Americas in 2004. •This region is followed by Europe 21%, Japan 10%, and the Rest of Asia 7%,

• Most medical electronics systems (by value) are produced in the region where the products are consumed. •However, several major medical electronics companies, such as Siemens and GE, are increasing design and assembly activities in lower-cost regions, such as China.

•As the percentage of medical electronics consumed in developing economies increases, a greater percentage of medical electronics systems will be produced there.

Market AnalysisMarket AnalysisOutsourcing and R&DOutsourcing and R&D

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2002$0

$20

$40

$60

$80$B n

G E O G R A P H IC D IS TR IB U T IO N

A m eric as

$39.5B n4.0% o f

E lec tro n ic s Indus try

2004 4.4% C A A G R2004-2008

$47B n

$37B n$39.5B n

62%

J ap an

10%

E uro p e

21%

A s ia /R O W

7%

0%

10%

20%

30%

40%

50%

60%

70%

2003 2004 2005 2006 2007 2008

M 44.273m w -m ed

Market AnalysisMarket Analysis

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ProductProduct20042004Units Units (Est.)(Est.)

Major SuppliersMajor Suppliers

Hearing AidsHearing Aids 6M6M Siemens, GN ResoundSiemens, GN Resound

PacemakersPacemakers 0.8M0.8M Phonak, Starkey, Oticon, Phonak, Starkey, Oticon, WidexWidex

Implantable External Implantable External Defibrillator (ICD)Defibrillator (ICD) 0.2M0.2M Medtronic, St. Jude, Medtronic, St. Jude,

GuidantGuidant

Automated External Automated External Defibrillator (AED)Defibrillator (AED) 0.13M0.13M Philips, Medtronic, Zoll Philips, Medtronic, Zoll

Medical, Cardiac ScienceMedical, Cardiac Science

UltrasoundUltrasound 0.06M0.06M Philips, GE, Siemens, Philips, GE, Siemens, ToshibaToshiba

Magnetic Resonance Magnetic Resonance Imaging (MRI)Imaging (MRI)

0.0030.003MM

GE, Siemens, Philips, GE, Siemens, Philips, Hitachi, ToshibaHitachi, Toshiba

Market AnalysisMarket Analysis

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NEMI Roadmap Issue NEMI Roadmap Issue Situation Analysis Situation Analysis

–NEMI is addressing the rise in the electronic NEMI is addressing the rise in the electronic healthcare sector.healthcare sector.

–Convergence of Market Demands and Convergence of Market Demands and Regulatory Issues are Driving Action in two Regulatory Issues are Driving Action in two different directions.different directions.

Critical (Infrastructure) Issues – Critical (Infrastructure) Issues – – American Retirees should double by 2025 putting American Retirees should double by 2025 putting

excessive demand on the healthcare system.excessive demand on the healthcare system.

– Demand for Healthcare is outpacing the supply. Demand for Healthcare is outpacing the supply. Especially as ‘boomers’ age.Especially as ‘boomers’ age.

– No-lead issues with chlorine bleach.No-lead issues with chlorine bleach.

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Convergence = new home health platformConvergence = new home health platform• Digital home entertainment infra can be used for healthDigital home entertainment infra can be used for health • Everyday health through everyday devicesEveryday health through everyday devices• Personalized, proactive health info/reminders/agentsPersonalized, proactive health info/reminders/agents

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NEMI Roadmap IssueNEMI Roadmap IssueNeeds in the Industry Needs in the Industry

1.1. Greater IT infrastructure to drive diagnostics Greater IT infrastructure to drive diagnostics and patient records. (Bush has $100M into and patient records. (Bush has $100M into Patient Electronic Records Research)Patient Electronic Records Research)

2.2. There is not a complete architecture between There is not a complete architecture between POC, monitoring, compliance, diagonistics POC, monitoring, compliance, diagonistics and records. (New Technology is not needed and records. (New Technology is not needed as much as integration).as much as integration).

3.3. Growing number of PAN based companies Growing number of PAN based companies show constant monitoring and sensor show constant monitoring and sensor networks are close at hand.networks are close at hand.

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Issues and Future TrendsIssues and Future Trends

MEM’s and Implantable Devices are a growing MEM’s and Implantable Devices are a growing market segment.market segment.

– New Research near to marketNew Research near to market– Ion Sensitive Field Effect TransistorsIon Sensitive Field Effect Transistors

– Inductive rechargingInductive recharging

Impact to national economy on healthcare will Impact to national economy on healthcare will force the need for less expensive systems.force the need for less expensive systems.

– 74 million elders in 202574 million elders in 2025

– Impact is a national trend toward home health Impact is a national trend toward home health technologies in the long termtechnologies in the long term

““Integration and Interface Design are strongly Integration and Interface Design are strongly needed.” Eric Dishman Testimony to House needed.” Eric Dishman Testimony to House Subcommittee on Aging.Subcommittee on Aging.

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Why is Intel here?Why is Intel here? Grow our marketsGrow our markets: supply computing and : supply computing and

communications technologies to a broadly defined home health & communications technologies to a broadly defined home health & wellness market which is poised for massive growth worldwidewellness market which is poised for massive growth worldwide

Healthy workforceHealthy workforce: insure our own 80,000 employees : insure our own 80,000 employees worldwide have tools, technologies, and training to care for their worldwide have tools, technologies, and training to care for their own aging parentsown aging parents

Healthy economy for businessHealthy economy for business: catalyze new : catalyze new paradigms of health care to head off looming worldwide paradigms of health care to head off looming worldwide economic crisis from high-cost, clinic-centric care that cannot economic crisis from high-cost, clinic-centric care that cannot scale to meet the needs of the age wave scale to meet the needs of the age wave

We will never be a healthcare company. We will never be a healthcare company. We supply technology ingredients. But We supply technology ingredients. But we continue to lead R&D in new areas. we continue to lead R&D in new areas. And some new players will shape next And some new players will shape next generation technologies for the next generation technologies for the next

generation of seniors. generation of seniors.

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Intel’s Proactive Health LabIntel’s Proactive Health Lab

Evidenced-Based Technology ResearchEvidenced-Based Technology Research

http://www.intel.com/research/prohealth/http://www.intel.com/research/prohealth/

Evidence-Based Technology ResearchEvidence-Based Technology Research

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Intel’s Proactive Health LabIntel’s Proactive Health Lab

http://www.intel.com/research/prohealth/http://www.intel.com/research/prohealth/

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Intel’s Proactive Health LabIntel’s Proactive Health Lab

http://www.intel.com/research/prohealth/http://www.intel.com/research/prohealth/

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Ion Sensitive Field Effect Ion Sensitive Field Effect Transistor (ISFET)Transistor (ISFET)

Purushothaman and ToumazouPurushothaman and ToumazouIEEE PROC 2001IEEE PROC 2001

DNA Polymerase

Marker for ACGT Nucleotides by pH changes

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Intel’s Precision Biology LabIntel’s Precision Biology Lab

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Intel’s Research Council grantsIntel’s Research Council grants

http://www.intel.com/research/universityhttp://www.intel.com/research/university

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CAST partnership with AAHSACAST partnership with AAHSA

http://www.agingtech.orghttp://www.agingtech.org

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CAST partnership with AAHSACAST partnership with AAHSA

http://www.agingtech.orghttp://www.agingtech.org

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ETAC consortium with Alz AssocETAC consortium with Alz Assoc

http://www.alz.orghttp://www.alz.org

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““Health care is the mother of all big businesses Health care is the mother of all big businesses …. this is life and death—some people will get …. this is life and death—some people will get access to this ‘health-care mainframe,’ and access to this ‘health-care mainframe,’ and everybody else dies.” everybody else dies.”

- Andy Grove- Andy Grove

Source: “Intel's Andy Grove: The Next Battles in Tech: The IT visionary says tech needsSource: “Intel's Andy Grove: The Next Battles in Tech: The IT visionary says tech needs to learn to think bigger,” by Brent Schlender, FORTUNE, Monday, April 28, 2003 to learn to think bigger,” by Brent Schlender, FORTUNE, Monday, April 28, 2003