Market Potential for Ambient Assisted Living Technology: The Case of Canada


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By Robert Savage*, Yongjie Yon, Michael Campo, Ashleigh Wilson, Ravin Kahlon, and Andrew Sixsmith


* Published under my former surname Savage


Publication Information: M. Mokhtari et al. (Eds.): ICOST 2009, LNCS 5597, pp. 57–65, 2009. © Springer-Verlag Berlin Heidelberg 2009


Abstract. An Ambient Assisted Living (AAL) environment is an integration of stand-alone assistive technologies, with elements of smart homes, and telehealth services. Successful development of this emerging technology will promote the ability for older people to live independently and age in place. This paper focuses on the socio-technical challenges associated with implementing the AAL market with specific reference to Canada. The strategy used to gather information was a case study design. Market facilitators include the vast Canadian geography, the number of older people living in rural communities, and the development of several provincial initiatives aimed at enabling seniors to remain independent. The principle of universality in Canada’s healthcare system bodes well for these technologies, as AAL has the potential to assist in equalizing services to these communities. Barriers include fragmentation of the market, where in Canada more than 100 different health authorities serve individuals across ten provinces and three territories.


Keywords: gerontechnology, health monitoring, smart homes, aging-in-place.


Introduction


Aging in place and remaining independent in one’s home is a goal held by the majority of older people as they age [1]. Interestingly such a goal is congruent with efficient health care delivery because care for individuals in the home is less expensive than in institutional health care settings [2]. Using technology to meet this goal is the focus of current research within the Ambient Assisted Living (AAL) realm. The general purpose of AAL is to provide individualized support services and health care to older people. Successful development of emerging AAL technology will promote the ability for older people to adapt to their environment [3], live independently, safely, and age in place.


Ambient Assisted Living


An AAL environment is an integration of stand-alone assistive technologies, with smart home innovations, and telehealth services. In particular, this involves systems for monitoring older people at home and a range of services from traditional community alarms to the passive monitoring of individuals using multi-sensor data acquisition technologies [4]. Telehealth is defined as using information and communication technologies (ICT) to assist health care practitioners with diagnoses, treatment, consultations, and patient education [5]. This paper draws on work carried out within SOPRANO (Service-oriented Programmable Smart Environments for Older Europeans), a European Union funded project to develop such an ambient assisted living system. SOPRANO is an international consortium of corporations, service providers, and academic institutions with over 20 partners from countries including Greece, Germany, UK, Netherlands, Spain, Slovenia, Ireland, and Canada.


While there has been much research and speculation regarding the widespread adoption of SOPRANO-type technologies in the United States and Europe, knowledge of how this market may emerge is still in its infancy. The case of Canada is particularly interesting. Surveys in North America have found a strong desire for inclusion of health services into AAL technologies [6]. Additionally, new market projections on the integration of nutrition, health monitoring, grocery shopping, emergency services, and telemedicine have been viewed positively [7]. The current level of technology use however (e.g. existing technologies such as alarms or personal response systems) in Canada is relatively low and the question remains whether there is potential for the AAL market in Canada.


This paper is not intended to focus on the hardware or software associated with these systems, but rather will explore the notion of AAL as a potential equalizer to health services via the examination of its market potential within the Canadian context. This socio-technical approach allows us to develop a better understanding of the usability and challenges faced by those individuals who will eventually interface with the system. Here we will begin with an examination of the Canadian health care system, followed by a discussion of the facilitators, barriers, and market potential of SOPRANO-type technologies in Canada.


Methodology


A case study design was used to gather information concerning the potential for ICT adoption in Canada. Given that the ICT industry is in the midst of rapid expansion, our approach must be viewed as ideographic, meaning the data collected is unique to time and place. The data was gathered between September and November of 2008. Internet searches were performed to yield product information, while numerous government websites such as Health Canada and the British Columbia Ministry of Health were consulted to accumulate policy and program information. Additionally, phone calls were made to identify agencies available for providing financial assistance to Canadian seniors with regards to ICT-based services. Our team of six researchers reviewed the data collectively and identified the themes most salient to the development of AAL technologies in the Canadian setting.


Health Care in Canada


The current state of the Canadian Health Care system is a product of the Canada Health Act, introduced in 1984 by the federal government. This system will be described here in detail as its principles provide a moral and ethical framework that may prove to be a key facilitator in the development of the AAL market in Canada. All ten provinces and three territories adhere to a set of five overarching principles: universality, public administration, comprehensiveness, portability, and accessibility [8]. Universality in particular mandates all insured residents are entitled to the health services provided by the provincial or territorial health care plans under uniform conditions. These five principles form the publicly funded program known as Medicare, were designed to ensure all citizens and permanent residents have reasonable access to medically necessary hospital and physician services.


While the Canada Health Act sets out the defining principles regarding the delivery and financing of medical care, such services are the responsibility of each province and territory [8]. In order to receive federal health care funding, each province and territory must adhere to the principles described. The delivery of health care services is regionalized further into smaller organizations called health authorities [9]. Although each respective provincial Ministry of Health outlines province-wide goals and standards, the actual planning, integration, and delivery of medical and social care services are the responsibility of the health authorities. For example, in British Columbia, the Ministry of Health Services oversees five geographical health authorities whereas Ontario’s Ministry of Health and Long Term Care oversees fourteen health authorities that are responsible for local service delivery [8]. Interestingly, while the Canada Health Act may be viewed as a facilitator in principle, the manner in which services are delivered may be seen as a barrier to the initiation of the AAL market.


Provinces and territories also finance additional services and programs outside of the Canada Health Act definition but within their health insurance plan legislation [8]. As a result, there are some variations between provinces in the services provided and covered through public funding. These are often geared towards specific groups including older adults and those with low incomes. For example, within British Columbia there are no publicly funded provincial government agencies or ministries that administer programs to subsidize ICT-based services for seniors [10]. However, Alberta’s Ministry of Seniors and Community Supports administers a one-of-a-kind program called the Special Needs Assistance Program for Seniors. Under this program, low-income seniors who have exhausted all other government resources, and still have financial difficulties, may be eligible for funding of one-time extraordinary expenses. This program provides a maximum of $5000 of funding per year for seniors. To be eligible, the applicant must show that they have applied to other benefit programs, have resided in Alberta for a minimum of three months, have completed the Special Needs Assistance Program application form, and fall within current annual income eligibility guidelines.


Given the vast geographic differences in Canada, particularly the urban and rural disparities, Canada Health Infoway is recommending the adoption of telehealth to assist in the reduction of health care costs [11]. These examples display that such programs may act as either barriers or facilitators towards the implementation of SOPRANO technologies. On one hand, there is a potential that AAL expenses could become subsidized, on the other, a comprehensive bureaucracy may inhibit the actual number of users who may benefit from accessing such programs.


Facilitators


There are number of facilitators driving the adoption of ICT-based services in Canada. First, Canada has an aging population, and the percentage of older individuals over the age of 65 is projected to grow from its current 13% of the population to an estimated 21.4% by 2026 [12]. In fact, Canada leads the industrialized world with regards to its rate of increase in the older adult population. It is estimated that between the year 2000 and 2030, there will be a 126% increase in this demographic [13]. This is considered to be a facilitator due to the fact that the expected AAL market is to be made up of a proportion of Canada’s over 4.5 million seniors.


Second, while much of the population lives condensed in close proximity to the U.S. border, geographically Canada is the second largest country in the world, with a total land area of 9,093,507 km2 [14]. Depending on which Statistics Canada definition is used, between 22% and 38% of Canadians may be classified as living in remote or rural communities [15]. Geographic location has been established as a determinant of health and many surveys display a dichotomy whereby residents of remote and rural communities experience poor health in comparison to their urban counterparts [16]. One potential factor playing a role in the unmet healthcare needs of rural residents could be proximity to a physician. In a study by Ng, Wilkins, Pole, and Adams it is reported that there is less than one physician per 1000 residents in rural regions, compared to two or more physicians per 1000 residents in large urban centers [17]. Further, two-thirds of rural and small town residents live within 5 km of a physician, while 7 percent live more than 25 km. Finally, the special case of the northern remote regions should be mentioned. Here it is reported that two-thirds of individuals live more than 100 km from a physician. Translated this leaves between 6 and 11 million Canadians at risk of poor health due to geographic location. Recall that under the Canada Health Act’s principle of universality, all insured residents of a province or territory must be entitled to Medicare services [8]. This bodes well for AAL technologies as they have the potential to help equalize service provision to insured residents [18]. More specifi- cally, AAL has the potential to increase access to one’s health and social network by electronically reducing the distance between both service providers and family members.


Third, Canadians have been very receptive to the use of new technology. This is evidenced in the growth in Internet use from 12.7 million users (or 40.3% of the total population) in the year 2000 to 28 million users (or 84.3% of the total population) in 2007 [14,19]. These general policy and population features may all contribute to the facilitation of ICT growth in Canada.


Fourth, examining the issues of medication compliance among older adults in Canada, demonstrates how even a single component of the SOPRANO system has the potential to reduce costs to the health care system. For example, Samoy and colleagues have reported that 25% of hospitalizations in British Columbia's largest hospital are drug related [20]. Further, 16.2% of these drug related incidents were the result of non-compliance. Non-compliance is simply, the inability to use a medication as it was prescribed, and in elderly populations, noncompliance rates run approximately 60% [21]. The overall cost of non-adherence in the United States in 1997 was estimated to be approaching $100 billion [22]. Given that Canada's population is

approximately one tenth the size of the U.S., and factoring in a modest 3% inflation rate in the healthcare sector, it is possible that costs of non-compliance in Canada in 2008 may have been as high as $14 billion. Taking the scenario described into consideration, the remote monitoring of medication use in SOPRANO, certainly possesses the potential for widespread utilization.


Finally, there is a trend within numerous provincial health ministries towards care in the home rather than in an institutional setting. While the Canadian Home Care Association has argued that financing has yet to follow government rhetoric in this area, several recent government strategy frameworks suggest a more promising outlook [2]. For example, the Healthy Aging and Wellness Working Group, a consortium representing most provinces, have outlined a strategy for healthy aging in Canada [23]. This strategy includes supporting and caring in the community, as well as enabling seniors to remain independent by promoting self-care in the home. Additionally, the government of British Columbia has recently published the Seniors Healthy Living Framework, where under the cornerstone of healthy living, the province is searching for new tools and supports for those who are providing in-home care to seniors [24]. Further, in the province of New Brunswick a long-term care strategy has been developed. Some of the key goals include a desire to reduce the burden of care among family members, to reduce the need for long term care services, and to increase the range of options available to manage care in the home [25]. An AAL environment such as SOPRANO may be viewed as one potential tool to assist and achieving these goals. Overall, these facilitators justify our call to examine the market potential within a socio-technical framework. It is simply not worthwhile to progress with the development of these technologies in isolation of the social context in which they will be embedded.


Barriers


On a general level, a number of constraints towards ICT adoption exist. The major barrier is clearly the fragmentation of the delivery of health care in Canada. While the country has Health Canada at the Federal level, the realm of responsibility is to establish criteria and conditions to be fulfilled by provinces and territories. These

jurisdictions may receive cash contributions by way of the Canada Health and Social Transfer payment [8]. Thus, each province or territory has a different strategy to administer health initiatives at a local level. In Saskatchewan, for example, health is delivered regionally via 12 provincial health authorities. This feature may act as a constraint because companies developing technologies that may improve health and health care delivery cannot look to Canada as a single market. In fact, it is not unlikely that each of the country’s over 100 health authorities [26] would have to be dealt with individually.

Additionally, with regards to the adoption of innovation, Canada currently ranks 13th out of 17 industrialized nations and has been a below average performer since the 1980’s [27]. This is problematic since emerging technologies such as AAL are subject to further upgrades as the technology develops. Thus, countries that do not adopt innovative technology early run the risk of being one or more generations behind and always trying to catch up.


Finally, the key barrier in the socio-technical framework concerns itself with policy and legislative implications. Through ICT-based services such as telehealth it is now possible for patients from remote or isolated areas to be treated by out-of-town physicians. This situation will give rise to the question of licensing and whether the physician is licensed to practice in one area to the next. Currently there is no inter- jurisdictional agreement on licensure and regulation of practice and standards on the use of telehealth between patients and physicians [28]. Silverman has identified four challenges relating to policies that would prevent the widespread proliferation of telehealth [29]:


  1. 1.The lack of doctor-patient relationship agreement or protocol, particularly for online telehealth services. There is a need for agreement on what constitutes in- formed consent for online medical services.


  1. 2.There is a lack of protection from liability and malpractice surrounding telehealth and practice in cyberspace. Specifically, there is no jurisdiction on licensure re- garding who is qualified to provide health services. It is unclear whether physi- cians would currently be protected under the malpractice insurance policies for al- legations arising from telehealth care.


  1. 3.There is a lack of standardization of practice and patient privacy for electronic health information and telehealth.


  1. 4.There is no legislation on the reimbursement of service for telehealth and Internet health consultation.


In using a socio-technical framework, barriers have emerged and are highlighted which may not have otherwise been salient. Thus, it is important to continue looking at such items from a multidisciplinary perspective and include those stakeholders in the policy, research and development, and end-user realms. In short, there is little use in forging ahead with the development of AAL technologies, without careful consideration of these issues.


Market Potential


In Canada, the market for AAL may progress by means of two different pathways. First, the subsidy/reimbursement path, where some organization (e.g. government, charity, corporation) pays all or a portion of the costs associated with the implementation and maintenance of an AAL environment. Second, AAL has potential to emerge within the private consumer market. Both of these paths hold great promise for the implementation of AAL generally and the SOPRANO system specifically in the Canadian context.

To gain insight and understand the subsidy/reimbursement path, an examination of Canada’s Electronic Health Record provides a potential roadmap. As is true with any innovation, the concept of an electronic health record, like AAL, was at one time only an idea. The Federal Government of Canada formally recognized the importance of the Electronic Health Record in 2001 with the development of Health Infoway Incorporated [26]. Subsequently, at the provincial level in British Columbia, an agreement was reached in 2006 between the government and the British Columbia Medical Association (BCMA) to standardize and facilitate the implementation of electronic medical records [30]. To provide contrast and set the tone, the Canadian Home Care Association [2] has clearly lobbied for change in the domains of home care and informal care with less than spectacular results. The political power of the BCMA [31] which represents physicians, medical residents, and medical students in British Columbia is by comparison, vastly superior. Considering this organization represents some of the wealthiest members of the province, the Physician Information Technology Office (PITO) may be viewed as an absolute coup d’etat. Under the PITO program, the gov- ernment has chosen six vendors eligible for reimbursement and physicians simply choose one of these vendors to implement the electronic medical record in their office [32]. The costs of implementing the program include one time implementation costs and annual operating costs, both of which under the PITO program are funded at the 70% level by the provincial government. This program provides clear evidence of the funding bias towards medical and acute care in British Columbia and in Canada. Thus from a strategic perspective, if the reimbursement channel is sought, market exploitation has the best chance if it could in some manner be aligned into the realm of medical care.


It is not beyond comprehension that a private market for AAL solutions may exist in Canada. Consider, for example, that the number of Canadians over 45 years of age, caring for seniors has increased from 2 million to 2.7 million between 2002 and 2007 [33]. If affordable systems are developed, it is not unlikely that these caregivers would be willing to pay for such a service. Another factor to be taken into account in the private market is the usability of technology. To illustrate, the total number of consumer electronic returns (where no trouble in the device is found) in the United States market totaled $13.8 billion [34]. It is clear then, that if AAL technologies are to successfully penetrate the consumer market, the focus must be on developing user-friendly technologies that will integrate seamlessly with existing devices and networks.

While a number of barriers have been identified, many promising developments are currently taking shape in Canada that may mitigate their detrimental effect. First, Canada may be poised for change as 2007 was a record setting year in terms of ICT mergers and acquisitions in the Canadian market [35]. The benefits of these changes will translate to economic gains in the long-term and will enable Canada to take advantage of its ability to innovate in the future. Second, the 2009 Canadian Federal Budget outlines new investment that bodes well for the Canadian technology sector [36]. This Budget calls for $750 million to be invested in leading edge research infrastructure through the Canada Foundation for Innovation. Moreover, an additional $500 million is to be spent by Canada Health Infoway to encourage the implementation of Electronic Health Records. This is relevant because AAL is a logical step beyond the Electronic Health Record in terms of the integration of health care. In conclusion, there is great potential for AAL systems such as SOPRANO in the Canadian market and such potential may be realized most efficiently if future research continues to pay attention to the socio-technical framework.


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Acknowledgments. The authors wish to thank the SOPRANO consortium.


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Note: This article was accessed via the publishers website and therefore most of the web links in the reference section may not be accessible due to password protection.


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