New Report Tempers Rosy Outlook For Wearable Health Devices

Is all the excitement about wearable digital devices actually worth it? A new report out this month from PricewaterhouseCoopers examines the state of wearables right now, revealing that fewer than half of people who own such a device actually use it every day.

In fact, for all the optimism put forth by producers and regular users of wearable devices – things like fitness bands, Google Glass, and other digital tools worn on the body – they don’t have much to show for it. About 21% of consumers in the U.S. own one, according to the report, but about 52% of those don’t use theirs every day – and that number includes the approximately 10% of owners who no longer use their device at all.

Those numbers stand in opposition to the seemingly unceasing hype surrounding wearables right now from companies like Jawbone, Fitbit, Nike, and now Apple . “We tried in this report to be very grounded in reality,” Ceci Connolly, managing director at PwC Health Research Institute, told me over the phone. People like the idea of these devices. They just don’t want to bother with them.

The report, which culled its information from a survey of 1,000 people, as well as focus groups and interviews, claims that 56% of those surveyed believe the average lifespan will increase by a decade thanks to wearables’ ability to monitor vital signs. 42% think that wearables will dramatically improve the average person’s athletic ability – but notice that that number is twice as high as the percentage of people who said they actually own one.

Connolly and Vaughn Kauffman, principal in PwC's Health Industries practice, ascribe this to the fact that wearable technology is still in its early days. Users right now are spending a fair amount of money on devices that are currently pretty limited in function. “Consumers are not going to be the ones to shell out much of their own money,” Connolly said. “They think it’s kind of neat.”

Yet investors are pumping money in. By the middle of this year, digital-health startups had collectively garnered $2.3 billion in funding, with $200 million of that going to devices like those covered in the report. One potential solution to bridge the gap between cost and consumer? Make the devices an employer- or insurance-provided benefit.

At this point in the tech-adoption cycle, most consumers are clearly unwilling to shell out money on a wearable for its own sake. (In fact, only 38% of those surveyed were very or somewhat willing to buy one even for $100.) But if the device were provided as a health benefit and associated with the user’s healthcare provider, the number could increase – according to the report, up to 68%.

“Physicians are in that trusted circle of patients,” Kauffman said, “and to the degree that companies are trying to enter that trusted circle they have to be upfront about how the information is going to be used to benefit the patient.” If your digital-health company wants users, you had better make friends with their doctors first.

And there are still more hurdles: the technology to make sense of all the data collected by a wearable still needs fine-tuning. Users are concerned about privacy and want to know who has access to their health data. Wearables, right now, simply don’t live up to the hype. So don’t feel too bad about that Fitbit languishing in your bottom drawer. You are far from alone.