The health care sector poses unique challenges and opportunities, said John Davies, MD at Time and Data Systems International (TDSi). “After all, you have to provide security while, at the same time, guaranteeing access to patients and family members. You simply cannot go over the top in locking things down.” Davies estimates that the Americas account for 50 percent of the global market for electronic security products and systems sold to the health care sector, followed by EMEA with 30 percent, East Asia 20 percent, and the rest of Asia 10 percent. While EMEA is growing at 4 percent and the Americas around 6 percent, growth in East Asia has been compounding at 10 percent. “In the next three years,” Davies said, “Asia is going to start to outstrip the other markets in terms of size.”
For a US$5-million hospital project with 500 beds, Davies estimates that 30 percent would be spent on video
surveillance, 30 percent on fire detection systems and alarms, 20 percent on access control (half of which for biometrics), and 20 percent on system integration. The latter might include building and records maintenance and management. Looking at access control, the market is about $200 million per year, and Davies expects this to grow to $300 million by 2016. Extrapolating his figures for total global sales, one arrives at around $1 billion per year.
Defining the health care sector, particularly in terms of market research statistics, is somewhat problematic. “After all,” said one industry executive, “the health care sector also includes clinics and private medical and dental practices.” These generally small premises do require unique security solutions. “Sales to small- and medium-sized players are often listed under retail sales,” he explained.
Taking the pulse of biometrics
One major beneficiary has been biometric players. According to Phil Scarfo, VP of Worldwide Sales and Marketing at Lumidigm, hospitals and pharmaceutical prescriptions are creating new opportunities. For example, the Electronic Prescriptions for Controlled Substances rule was issued by the US Drug Enforcement Administration as an amendment to the Comprehensive Drug Abuse Prevention and Control Act of 1970 (commonly known as the Controlled Substances Act). According to the rule, doctors or pharmacists writing prescriptions must authenticate two of the following: something they know (a knowledge factor) with something they have (a hard token stored separately from the computer being accessed), and something they are (biometric information). “For increased security, less complicated management and ease of doctor and pharmacist use, most health care organizations prefer that one of the authentication factors be biometric,” Scarfo said.
Secured access to medical equipment and supplies is an ever-increasing priority for hospitals. “Maintaining adequate control and an effective audit trail is both a cost-saving and compliance issue,” Scarfo said. “Biometrics is an ideal solution to both problems.”
All of this is music to the ears of biometric products and systems providers. One forecast of next-generation biometric technologies, for example, puts the annual global market at $14 billion by 2017. That is a CAGR of nearly 20 percent.
While the markets are there, East Asian companies may not be the ones reaping the benefits. Eric Assouline, Export Sales Manager at CDVI, pointed out that, while East Asia has some strong players, especially the Koreans, North American and European companies tend to dominate both low-end and high-end markets.
“While much has been made of Indian companies' prowess in software,” Davies said, “most important R&D is occurring in matured markets like North America and Europe. It is about innovation through software, not just the hardware and the features that you offer.”
Too many access control products (readers, controllers and cards) at the lower end of the scale, Davies added, are also sold as mere commodities. He emphasized that the value in access control is in software integration. Companies taking advantage of this approach include Prysm, Synectics, Lenel, Maxxess, Hirsch and TDSi. Another big access control player, HID, is big in credentials and readers, but less so in terms of system integration and software.
Emerging markets
Davies sees the Middle East and Africa as rising new markets. “There has been a lot of growth in the health care market, not only in East Asia but also the Middle East and, very soon, parts of West and East Africa. We have been getting a lot of work in Nigeria, Angola, Ghana, Tanzania and Kenya.” Another key market has been Saudi Arabia, where hospitals are being built “left, right and center,” Davies said.
Some 95 percent of Chinese had government-provided health insurance in 2011, and the medical services market is growing 18 percent annually. In fact, as of last year, China had 3.7 million hospital beds, up 54 percent from 2005. Today, 12 percent of hospital beds are in facilities run by private corporations. Government targets could generate 400,000 new private hospital beds per year with annual revenue from private hospitals in China reaching $377 billion by 2015. The increase in hospitals is increasing demand for medical gear, as well as electronic security equipment and systems.
Legally speaking
Not all growth, however, happens for the same reasons. In North America, federal mandates requiring health care providers to secure sensitive patient information are driving much of the momentum. “Security solutions providers,” said one industry professional with a wry laugh, “really need to thank the high number of lawyers in the U.S. The threat of legal challenges has really forced large hospitals, in particular, to establish much greater security and control over patient records. Doctor handwriting has long been a source of jokes in the U.S., but no more,” he said. “It is absolutely essential that other health care professionals, including other doctors, nurses, orderlies and, most definitely, pharmacists, understand exactly the type of medical service or medication required.”
In the U.S., another major impetus is the federal goal envisioning citizens having secured electronic medical records by 2014.
Challenges vs. opportunities
For those who successfully make the transition to IT-based systems and networks, an added plus is that integration of a number of different requirements, from building maintenance and management, access control, fire and safety to reduced energy usage, has delivered real benefits in terms of reducing costs. That said, key challenges like scalability, availability, performance and compatibility — some prefer to call it interconnectivity — remain.
That was more than evident in the findings of two recent reports by the US Office of the Inspector General, which found a lack of IT security controls. Major vulnerabilities included unencrypted wireless connections and easy passwords, as well as those due to careless oversight, such as taped-over door locks.
The auditors classified 124 as high-impact breeches; these resulted in costly losses, injury or death. According to the report, unauthorized parties could have accessed or did access systems and patient data. Loss of information contained in supposedly secured records could lead to manufacturing of false identities and fraudulent medical charges.
As health care centers move to adopt network-based or wireless technology, more problems or risks might have emerged. Medical devices and security systems connected to the Internet are vulnerable to being hacked; as site usage increases, larger or more data centers are needed, creating greater challenges to medical and security practitioners alike. There will not be a single winner that takes it all, but those who integrate physical and logical access solutions seamlessly and cost-effectively will have a better chance of standing after this new round of economic and financial turmoil.