Boomers fuel growth of technology-based home healthcare solutions

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January 21, 2006 The baby boomers are heading for senior citizenship and the most populous generation in history is about to give life to yet new markets. The news this week that giant Dutch technology company Philips has purchased 'personal emergency response' company Lifeline is an indication of the growing importance of technology-based home healthcare solutions as the boomers seek to prolong their independence. Lifeline has over 30 years' experience of monitoring seniors living independently at home and has a broad presence in the North American market with a turnover of US$150 million growing at 15%. In addition to the strong growth offered by the underlying market, the new business will draw on Philips' strengths in technology and innovation to create new products and services in an area it has been studying and developing for many years. These new offerings will have a clear consumer focus that differentiates them from 'traditional' healthcare services paid for by insurers. Longer term, Lifeline will serve as a platform for a broader array of home healthcare solutions, such as Motiva, Philips pioneering interactive healthcare system.

There are also important growth opportunities in new regions where Philips can build on its global presence, functional expertise and distribution channels The acquisition fits perfectly with Philips' focus on home healthcare, which in turn is part of its strategic focus on healthcare, lifestyle and technology. Philips has identified the rapidly growing home healthcare market as an important sector based on consumer insights and major market trends. These trends are a natural consequence of ageing populations and the increasing move of medical treatments from hospital to home. By 2050, the number of over 60s worldwide is predicted to reach two billion. Many of these seniors will want to continue living independently at home. What's more, like consumers in general, older adults increasingly wish to take greater control over their health, and are willing to pay for goods and services that maintain good health. For example, more than 90% of Lifeline revenues result from direct purchases by seniors or their caregivers.

Reassurance and personal control over health

As established companies with trusted brands, Philips and Lifeline can address these needs. The new company, which will remain headquartered in Framingham, Massachusetts, will be known as Philips Lifeline. It will continue and expand Lifeline's existing Lifeline emergency response services. These services involve subscribers wearing a Personal Help Button. In an emergency, subscribers just press the button and they are immediately connected to a caring, specially trained operator. These operators have instant access to the caller's health history and personal history and will ensure appropriate action is taken - whether notifying a family member or neighbor, or calling the emergency services.

The company markets its services through a network of more than 2,500 hospitals and other healthcare providers and serves a subscriber base of about 470,000.

"Our many years of understanding consumers and their needs have led us to identify 'healthcare at home' as a key sector for us," stated Ivo Lurvink, CEO of Philips Consumer Health & Wellness. "Lifeline is a market-leader which offers us a platform for other home healthcare products and services. As such it complements our existing presence in telemedicine, showcased in Motiva, our advanced interactive healthcare system. We believe our brand, global presence, technology and innovation capabilities will accelerate the growth of the company and we're very much looking forward to working with their experienced management team and talented employees."

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