Businessweek Remote Health Care

If Telefónica (TEF) has its way, your knee will one day call your doctor. In partnership with Barcelona’s Hospital de la Esperanza, Telefónica has developed a knee brace embedded with motion sensors that enable physicians to monitor patients’ rehabilitation remotely after they’ve been discharged from the hospital. As they exercise, patients—and there are 200 testing the device right now—watch their movements simulated via a 3D avatar on a computer, which wirelessly sends the data to the doctor for view on a PC or cell phone. Telefónica aims to sell the brace to hospitals worldwide when trials are completed by next year.

Until recently, the only connection between cell phones and health was the fear they might cause cancer or traffic accidents. Now, cellular operators are trying to become providers of wireless-health-care products and services. The market, known as mobile or m-health, spans everything from text messaging services to remind people to take medications to implants that monitor heart patients. There are even pills with edible computer chips; the chips send signals to a skin patch, which in turn transmits data to a doctor’s cell phone or computer. The information helps doctors track when patients take their medicines and whether there are adverse reactions. “Mobile has the potential to revolutionize the health-care system by increasing efficiency, lowering costs, expanding access to care, and improving patient outcomes,” says Alessio Ascari, who leads McKinsey’s mobile-health-care initiative from Milan.

Telecom operators view m-health as one of three future revenue streams, along with content and advertising. “All telcos face the same challenge: the commoditization of our core business of voice and broadband,” says Alvaro Fernández de Araoz, Telefónica’s director of corporate e-health. “We see wireless health care as a major source of new growth.”

So does every other major cell-phone player. France Telecom’s (FTE) Orange, AT&T Wireless (T), Sprint Nextel (S), Verizon, Vodafone (VOD), and Japan’s NTT DoCoMo (DCM) and KDDI all are investing in m-health. Vodafone, the world’s largest wireless operator, spotted the potential two years ago when its venture fund took an undisclosed stake in t+Medical, an Oxford University spin-off that uses mobile technology to monitor health conditions. In January, Vodafone opened its own dedicated m-health business unit at its headquarters in Newbury, England, with an initial staff of 45. While Vodafone will not say how much it will invest in the venture, Joaquim Croca, head of Vodafone Health Solutions, says the company is committed to developing the business.

The cell-phone providers are joining a crowded field. Medical equipment giants such as GE Healthcare (GE), Philips (PHG), and Siemens (SI), chipmakers such as Intel (INTC), and countless startups are developing remote monitoring devices, wearable sensors, and health-related mobile-phone applications as rising costs force a shift in patient care from the hospital to the home.