A Personal Emergency Response System (PERS) is an electronic device that enables individuals to secure help in an emergency. The system is connected to the person’s phone and programmed to signal a response center once a “help” button is activated the professionally trained PERS staff assesses the nature of the emergency and obtain appropriate help for the individual as necessary. The typical PERS consumer is elderly or disabled, living alone. The PERS System became a part of American culture in the 1980s and 1990s, popularized by a television commercial by Life Call with the catch phrase, “I’ve fallen and I can’t get up.” The PERS sector is also expanding to include mobile, telemedicine and telehealth offerings.
Industry Overview and Drivers:
PERS systems are primarily marketed to senior citizens through two main channels, each of which represents approximately half of the market.
The Institutional Channel includes hospitals and government subsidy programs.
- A single contract may involve thousands of units.
- A direct sales force is the primary sales and marketing approach.
The Retail Channel markets directly to private-pay individuals.
- Separate contracts are signed by each subscriber, typically for a month-to-month commitment, or no contract at all.
Key Sales Approaches Include:
- Print, especially direct mail and catalogs
- Dealer programs
- Mass media advertising, especially TV, radio
Strategic partnerships (e.g. CVS, Walgreens, Wal-Mart, etc.) Other markets for PERS systems include domestic abuse programs and latch-key children. Also, emerging services like telemedicine and telehealth are now included as branches of the PERS industry. The product offerings in the PERS industry are expanding.
Traditional PERS provide emergency response services using the following technologies and equipment:
- POTS lines and VOIP
- 2-Way voice
- 600 -1000 feet of transmitter range
- Console/communicator equipment
- Pendant transmitter
Expanded PERS Offerings add safety monitoring and healthcare monitoring to the traditional emergency response services, using newer technologies and equipment.
- Extended Voice – wireless remote speakers
- 1000’ of transmitter range
- Mobile PERS – using GPS technology
- Multiple wearable devices
- The PERS Market in North America was estimated to be $963.9 million in 2010 by Frost & Sullivan. It is expected to grow at 10.4% per year to $1.86 billion by 2017 and over $3 billion when telemedicine and telehealth are included. Some of the factors driving this growth rate include:
- Aging “baby boomers” who expect to live independently are increasing the need for effective and affordable solutions to support an “action care link” with healthcare providers and with patients’ families.
“Boomer” Growth Demographics for U.S.
The population of 65+ individuals is expected to increase significantly over the next 20 years, with the fastest growth expected to come in the number of people who have lived 80 or more years.
ESTIMATED US RESIDENTS AGE 65+ (millions)
|% annual growth rate from 2010 to 2040||2.4%||2.7%||2.8%||3.2%|
|Source: U.S. Census Bureau|
The average age of an in-home PERS subscriber is 81.
Health Care and Nursing Care Cost Pressures
- In 2013, the average annual cost was $52,000 for a resident in an assisted living facility and $85,000 for nursing care.
- Consumers (patients and family care providers), federal and state government, and insurance companies are collectively looking for ways to reduce health care
- Allowing people to remain in their homes provides significant healthcare cost savings compared to institutionalized health care facilities.
- Most elderly individuals prefer “aging in place” versus “senior living.”
Telehealth Care Opportunities
- Telehealth technologies have greatly increased the amount of health data that can be transmitted from the home.
- These new technologies have allowed an expansion of PERS services from the original core service of “emergency response”.
- Expanded services include health condition monitoring, medication management, and patient tracking / location.
- Several vendors now offer systems with automated fall detection capabilities. Fall victims who receive help quickly have shown significant reduced mortality rates and hospital stays.
- Other vendors provide user compliance tracking which detects when the device is not worn.
- Technology now allows for easier caregiver notifications, notifying adult children or others via text or email messaging of the status of the user.
- Mobile PERS is capturing an increasing percentage of the market. In MPERS, the customer is provided with a cell-phone-like device with one-button two-way communication and a GPS locator.
Other Important Factors that Could Accelerate the Current Rate of PERS Market Growth Include:
- Center for Medicare and Medicaid Services determining that PERS becomes reimbursed by Medicare
- Telehealth services increasingly being reimbursed under the Affordable Care Act based on innovations that reduce the cost of healthcare services.
There were approximately 1,600,000 monitored PERS accounts in 2011, with over 300,000 activations occurring annually. The traditional PERS pendants, linked to a home base station, are expected to grow 2% per year from 2012 to 2015. MPERS (mobile PERS) linked to mobile networks are expected to grow 35% per year from 2012 to 2015. IP technology advancements are driving the growth in the MPERS market segment.
Philips Lifeline is the largest player in the PERS industry in North America, dominating the industry with an estimated market share of more than 40% in the U.S. Philips Lifeline is part of Royal Philips Electronics of the Netherlands. They are also a major producer of PERS equipment.
Ranking Company Estimated Number of Customers
- Phillips Lifeline 850,000-1,000,000
- Connect America 165,000-250,000
- Life Alert 150,000-225,000
PERS Monitoring Providers:
Most of the major security alarm industry monitoring stations advertise that they offer third-party PERS monitoring services. However, it does take a meaningful investment in staff training to proficient in providing the specialized monitoring associated with PERS.
Philips Lifeline produces its own equipment. Historically, Linear and Visonic (A Tyco International Company) have been the other major manufacturers of traditional PERS equipment. Recent entrants have focused on specific improvements to the traditional system such as Mobile Help which provides mobility away from the 500-feet distance limit from the base station, Halo Monitoring which transmits vital signs from a chest strap, or Wellcore which has developed a fall detector.
Although a customer can buy a PERS system outright (from $100 to $1500), most customers sign a lease agreement. A standard PERS system lease agreement requires a nominal (sometime zero) activation fee and monthly monitoring fees of $25-$45. The standard system includes a two-way voice console, a personal activator button (radio transmitter) worn on a pendant or bracelet, and telephone line or cellular access to a 24 hour emergency response center. Most companies offer a discount for subscribers who pay annually rather than monthly.
Global Market PERS Expectations for 2020:
The market for Emergency Response Systems has a strong foothold in North American regions, USA and Canada primarily due to the expenditure made by government in the healthcare field belonging to these regions. Hence the market in USA is expected to grow at a CAGR of 12% and will be a leading nation until the end of this decade. The global Medical Alert Systems market size is expected to grow from around $1.23bn in 2013 to $1.85bn by 2018. The market is expected to reach the $2bn mark by 2020. Considering the USA alone, the population above 65 years of age will be touching 74 million by 2020.