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The Integration of Healthcare and Smartwatches in Taiwan

By Phil Sweeney
Published: Mar 16,2015

In the tech industry, smartwatches are set to become both new sought-after products and potential drivers of growth during the next few years. With the slowdown in demand and market saturation of smartphone mobile devices, new wearable products will be crucial to maintaining growth in the technology industry.

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A key initial selling point to convince consumers of the value of smartwatches is the benefits of health monitoring, and some analysts anticipate that 75% of medical patients will use some type of wearable mobile device in the future. Taiwan is in an excellent position to be a key player in the development of the smartwatch industry because it has both a strong technological sector and one of the top healthcare systems in the world.

Traditionally, health care has been based on periodic health-checkups at doctor’s offices and the treatment of patients after they have experienced injuries, become sick, or developed chronic health conditions. Smartwatches have the potential to change this model and make medical care become more preventative instead of reactive and based on the constant monitoring of patients’ vital signs instead of through occasional doctor’s visits. This will be more convenient for people with busy schedules and extremely helpful in medical emergencies where prompt treatment is the key to a successful recovery.

Figure 1 :   Since the start of the National Health Insurance in Taiwan in March 1995, the penetration has nearly reached 99%.
Figure 1 : Since the start of the National Health Insurance in Taiwan in March 1995, the penetration has nearly reached 99%.

For example, the prognosis for victims of strokes and heart attacks is far better if their condition can be detected and treated immediately. Smartwatches are an excellent mechanism for instantly transmitting medical data and emergency distress signals to hospitals and ambulance services during these types of medical emergencies.

Currently, companies, such as Samsung, Apple, Intel, and HTC are developing hardware for wearable products with sensors that are capable of constantly monitoring wearers’ physical conditions by detecting and measuring pulse rate, physical activity, level of fatigue, and sleeping patterns. These types of devices are expected to be especially useful for patients with chronic illnesses, such as epilepsy, diabetes, and high blood pressure. They will also be helpful for workers who have to engage in activities that involve paying attention for long periods of time. For example, truck drivers can wear devices designed to warn them if they are becoming too tired and are in danger of falling asleep while driving.

Meanwhile, other companies, such as Google and Baidu, are developing software and database platforms designed to collect and analyze medical data which will be transmitted from a wide variety of wearable devices. When integrated with electronic databases of patients’ medical records, this will be an invaluable research tool in understanding the prognosis of diseases based on large data sets. It will also be a useful tool in tracking epidemics, such as flu strains and potentially lethal diseases such as SARS and Ebola. Despite their numerous advantages for healthcare, however, it will take some time to integrate IoT cloud databases with medical record databases and create procedures for protecting the privacy of users’ medical data.

Figure 2 :   Taiwanese Smartwatch Supply Chains
Figure 2 : Taiwanese Smartwatch Supply Chains

Currently Taiwan is the third most prominent producer of smartwatches in the world and is home to 8% of all smartwatch companies. This stems from Taiwan’s status as a major producer of electronics, with both world-renowned companies such as HTC, Acer, and Asus, which produce their own brand-name products, and companies such as Quanta, which manufacture computers and mobile products for other well-known brands, such as Apple, Dell, Compaq, and Hewlett-Packard. In addition, Taiwan is also a major hub for small and medium sized enterprises that are capable of quickly producing innovative products in response to market demands.

Although the number of Taiwanese smartwatch companies is clearly smaller than the top two producers of smartwatches, with Mainland China at 26% and the United States at 25%, Taiwan has a strong advantage over these competitors because of its more highly developed healthcare system. In the United States, in particular, consumers are uneasy about having their health data monitored, collected, and shared with other organizations. This is because the health care system is a for-profit system, and patients are always at in danger of having to pay higher insurance rates should the insurance company decide that they are at higher risk of being insurance liabilities. The high insurance costs are a serious burden on much of the population. For example, over 60% of bankruptcies are due to patients’ being unable to pay their medical bills.

As a result, consumers in the United States are very protective of their private medical data because it could be used as the basis for companies to charge higher insurance rates or other types of discrimination. For instance, it is not unusual for healthcare providers to refuse to insure people who already have pre-existing medical conditions when they apply for insurance programs. In addition, patients will also be fearful that if banking and credit organizations are able to track their health conditions, it may be used against them when their credit ratings are calculated. Therefore, at first, consumers in the United States will be more reluctant to wear smartwatches that are capable of tracking their health conditions and possibly sharing it with other organizations.

On the other hand, residents of Taiwan have a much better situation because since 1995, they have been covered by the highly-affordable National Health Insurance program, which charges uniform standardized rates to all patients regardless of their medical histories. Therefore, for Taiwanese people, wearing smartwatches is not a risky activity because any data recorded will not have a negative impact on users’ access to affordable healthcare. In fact, according to a study by the Economist Intelligence Unit of London, Taiwan had the second best healthcare system in the world, in contrast to the United States, which was ranked number twenty.

In addition to providing the population with easy and convenient access to physicians, Taiwan also has a highly developed Health Information Network (HIT), which has been in operation since the 1980s. All hospitals and clinics are connected to the Bureau of National Health Insurance database, so that patients’ medical records can be easily accessed with just a swipe of their electronic health insurance ID cards. This advanced health-care infrastructure makes Taiwan the ideal location to begin implementing health monitoring of patients using smartwatches and other wearable devices.

In the past decade, Taiwan has donated US$120 million in humanitarian and health aid to 78 countries. Now Taiwan has the potential to revitalize the tech industry by encouraging smartwatch sales through its pioneering role in the integration of wearable devices with cloud data systems. By doing this, Taiwan can both mold itself into a high-tech role model in healthcare to be emulated by the rest of the world and be a key player in the smartwatch industry.

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