Business and Revenue Models

The technological and regulatory shifts described above are catalysing the emergence of new business models. The market is moving away from selling hardware (devices) to selling outcomes (health).

Future Market Strategies

The forecast for business models in Connected Health suggests a move towards transdisciplinary communities that envisage how to create and implement a research agenda to support this sector. This involves integrating digitalisation for consumers and consumption into healthcare. An advantage of these new models is the creation of genuine patient focus in the most efficient way possible. A challenge or disadvantage lies in designing revenue models that are profitable yet ethical, ensuring that the drive for profit does not compromise the goal of evidence-based public health campaigns.

The Rise of the "Payvider"

The most significant structural shift is the convergence of Payers (Insurers) and Providers into "Payviders." In a traditional Fee-For-Service model, a hospital benefits from a filled bed, while an insurer benefits from an empty one. This misalignment stalls preventative innovation. The Payvider model aligns these incentives: the organization benefits financially from keeping the patient healthy and out of the hospital.

Examples include UnitedHealth Group (via Optum), Humana (via CenterWell), and large health systems launching their own insurance plans. These entities are the primary customers for Connected Health technology because they directly capture the ROI of prevention. By 2030, these non-traditional providers could capture up to 30% of the US primary care market.

Reimbursement Evolution: CPT Codes and Beyond

In the US system, the existence of reimbursement codes determines the commercial viability of a technology. The expansion of Current Procedural Terminology (CPT) codes for Remote Patient Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) (e.g., 99453, 99454, 99457) has created a burgeoning industry.

Revenue Potential: A primary care practice can generate over USD 100,000 annually per 100 patients enrolled in RPM programs. This new revenue stream is a lifeline for small practices facing thin margins and rising labor costs. However, by 2030, we expect these discrete fee-for-service codes to be increasingly bundled into "capitated" payments, where providers are paid a flat fee per patient per month to manage their health using whatever tools they see fit.

Health-as-a-Service (HaaS)

Technology vendors are shifting from selling capital equipment (CapEx) to service subscriptions (OpEx), a model termed "Health-as-a-Service." Instead of selling an MRI machine or a fleet of patient monitors for a large upfront sum, a vendor like Philips or Siemens might install the equipment with no upfront cost and charge a "per scan" fee or a monthly subscription that includes the hardware, software updates, and maintenance. This model lowers the barrier to entry for hospitals and aligns the vendor's incentives with the hospital's uptime and efficiency.

The Retail Health Disruption

Major retail players (Amazon, Walmart, CVS, Walgreens) are attempting to capture the "front door" of healthcare by leveraging their massive physical footprint and consumer data. Their strategy relies on offering low-cost, convenient primary care that serves as a funnel into the broader health system. While the sector has seen volatility—evidenced by the closure of Walmart Health clinics—retailers are expected to refine their models, functioning by 2030 as the "triage layer" of the health system. They will likely utilise Connected Health kiosks and nurse practitioners to filter low-acuity cases before they reach expensive hospital systems, competing on accessibility and price.