Patient Monitoring & ConnectivityWhere is it Heading?

Mike Arani, Market AnalystPatient Monitoring

San Antonio, TX October 14th, 2008

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Wireless Patient Monitoring Market (North America)

Agenda:

1. Connectivity

2. Major Challenges

3. Innovation Trends

4. Competitive Landscape

5. New Regulations

6. Major Developments and Trends

7. Outlook

8. Survey

9. Q&A

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Connectivity (Wired or Wireless)

Data; Vital Signs, Patient Info, Medication…

Collection; Bedside Monitor, Infusion Pump, COWs

Storage & Allocation; EMR

Analysis; Central Stations, War Rooms (VISICU)

Access & Alarms; Desktop, PDA, Pagers

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Wireless LAN Spending (U.S.)

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Major Challenges

Interoperability and Standards

According to Tim Gee, “The medical device companies are becoming chimeras, where they’re part IT company, and they’re part embedded system company,” Gee noted. But, as long as their mindset remains that of an embedded system company trying to protect the “black box” of proprietary system design, it will be difficult to move forward.”

From Wireless Monitoring & Mobility…To Chasing Data

Wireless solutions have enhanced monitoring by adding more flexibility through increased mobility. But now that the wires are gone, the challenge is to “Ensure” real-time data collection without interference not loses!

Security

As networks become more open, data encryption becomes more vital.

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Innovation Trends

The “Winning” key for new solution is “Operability Enhancement”Solutions that allow Hospital expand the use of their current systems are expected to not

only gain ground but also shape the future of Medical Device/IT industry.

Example: OBS Medical’s VISENSIA (OBS Medical is the North American Subsidiary of UK’s Oxford Biosignal)

- Compatible with existing Monitoring Solutions Regardless of Brand

- Utilizes a Fusion of 5 vital signs to trigger Alarms

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Competitive Landscape

Patient Monitoring Companies:

• GE Healthcare

• Philips Healthcare

• Datascope (Mindray)

• Draeger Medical

• Spacelabs

• Nihon Kohden

Healthcare IT Companies:

• Mobile Access

• Innerwireless

• Integra Systems

• Airwave

• Meru Networks

IT & Micro-Computing Companies:

• Cisco

• Microsoft

• Intel

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Competitive Landscape (Cont.)

Undoubtedly, the most notable competitive trend is the acquisition of IT vendors by major

Medical Device Companies.

By acquiring successful Healthcare IT firms, Medical Device companies are able to

strengthen their Enterprise Solutions, morphing into “One-Stop” shops for all medical

technology needs.

Major Event:

• Philips Healthcare Acquires Emergin

• GE Healthcare Acquires Agility

• Cisco becomes a Registered Medical Device Vendor

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IEC 80001

This Standard specifies general requirements for the application of risk management of IT-

networks incorporating medical devices that achieve essential properties such as safety,

effectiveness, data & system security and interoperability. It defines responsibilities for

parties such as medical device manufacturers, non-medical device manufacturers, the

responsible organization, IT-network integrator, and potentially others, engaged in

installing, using, reconfiguring, maintaining and decommissioning IT-networks

incorporating medical devices. This Standard addresses risks related to patients,

operators and / or third parties. (To Buy a Copy go to aami.org)

IEC 80001 is a Risk Management Process Standard for Medical Device and IT vendors as

well as Healthcare Providers.

It’s Ultimate Goal is to help maintain Network Safety and Effectiveness as Changes are made

in the Medical Device – IT systems.

The Process beings from Pre-Purchase to Installment, Maintenance and Upgrades

Although not Mandatory, IEC 80001 may become a requirement by accreditation bodies such

as the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) or

Center for Medicare & Medicaid Services (CMS).

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FDA & MDDS

• MDDS or Medical Device Data Systems are applications that used to Transfer,

Exchange, or Display medical device info.

• Feb. 2008: FDA published the 1st proposed draft to redefine or reclassify some of the

medical device data application.

• SUMMARY: The Food and Drug Administration (FDA) is proposing to reclassify, on its

own initiative, the Medical Device Data System (MDDS) from class III (pre-market

approval) to class I (general controls). This action does not include medical device data

systems with new diagnostic or alarm functions. FDA is also proposing that the MDDS be

exempt from the pre-market notification requirements when it is indicated for use only by

a healthcare professional and does not perform irreversible data compression.

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Outlook

• Healthcare IT and Medical Device (Especially Patient Monitoring)

is becoming more integrated driving the rapid evolution of solutions.

• The confusion caused by this rapid change is normal and by time

the industry will arrive at more clear state.

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Your Feedback is Important to Us

Growth Forecasts?

Competitive Structure?

Emerging Trends?

Strategic Recommendations?

Other?

Please inform us by taking our survey.

What would you like to see from Frost & Sullivan?

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Exciting New Patient Monitoring Topics Published!

• Emerging Medical Device Markets: The Grass IS Getting

Greener on the Other Side! – Available to Vital Sings Subscribers

• North American Hospital Wireless Patient Monitoring Market –June 2008

• North American Home Healthcare and Disease Management

Market – April 2008

• North American Fetal & Neonatal Monitoring Markets – Summer

2008

• Cardiac Monitoring Products and Services: Market Outlook

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For Additional Information

• To leave a comment, ask the analyst a question, or receive the

free audio segment that accompanies this presentation, please contact Stephanie Ochoa, Social Media Manager at (210) 247-

2421, via email, analystbriefings@frost.com, or on Twitter at

http://twitter.com/stephanieochoa.