Report Highlights

U.S. Connected Healthcare: Market Overview

The U.S. connected healthcare market generated an estimated USD 58.4 billion in 2024 and is forecast to reach USD 121.7 billion by 2032. Spending spans connected medical devices, remote patient monitoring platforms, telehealth infrastructure, and interoperable clinical data systems. Medicare and Medicaid reimbursement, rather than consumer demand, sets the commercial boundaries of this market. Government payers, not retail buyers, determine which devices reach scale, and private insurers largely follow Medicare coding decisions.

Market structure reflects policy history. The HITECH Act of 2009 created the Medicare and Medicaid EHR Incentive Programs, which later evolved into the Medicare Promoting Interoperability Program administered by CMS, and it funded the hospital data infrastructure that connected devices now plug into. Private sector firms, including Medtronic, Philips, and Abbott, lead device engineering and hardware manufacturing, while federal agencies set connectivity standards and payment rules. Government has been the dominant force in demand creation, and the private sector leads in product engineering and software platforms.

Policy-Driven Growth in U.S. Connected Healthcare

The 21st Century Cures Act, signed in December 2016, required the Office of the National Coordinator for Health Information Technology to establish information blocking rules and certification criteria for electronic health records. Information blocking provisions took effect in 2021, creating a legal incentive for device makers to ship data through standardized FHIR interfaces. The Trusted Exchange Framework and Common Agreement, recognized in 2022, adds a national exchange layer that lets connected devices feed hospital records without bespoke integrations.

CMS created separate Current Procedural Terminology codes for remote physiologic monitoring (CPT 99453, 99454, 99457, and 99458) and pays for them under the Medicare Physician Fee Schedule, turning device data into billable services. The FCC's Rural Health Care Program, funded through the Universal Service Fund and administered by the Universal Service Administrative Company, subsidizes broadband for eligible rural clinics through its Healthcare Connect Fund. Together these three mechanisms convert policy into predictable device volume, because each creates a reimbursable or subsidized purchase path.

Regulatory Barriers and Compliance Costs

Connected devices that transmit diagnostic data must clear FDA premarket review, and Section 524B of the Federal Food, Drug, and Cosmetic Act, added by the Consolidated Appropriations Act, 2023, requires manufacturers to submit cybersecurity plans and a software bill of materials. The FDA's Center for Devices and Radiological Health administers these reviews, and industry estimates place added cybersecurity delays at three to six months on a 510(k) clearance timeline. Manufacturers must budget for penetration testing and ongoing vulnerability disclosure programs for every product line.

The HHS Office for Civil Rights enforces the HIPAA Security Rule, and its January 2025 proposed amendments would make encryption and multifactor authentication mandatory for covered entities and their business associates, which includes many device vendors. Non-HIPAA wearable and app data falls under the FTC Health Breach Notification Rule, updated in 2024, while Washington's My Health My Data Act, effective March 31, 2024 and enforced by the state Attorney General, requires separate consent for consumer health data collection. Multistate compliance therefore adds legal review cost to every product launch, and this cost falls heaviest on smaller device start-ups.

Policy-Created Opportunities in the U.S.

The Rural Health Transformation Program, created by Public Law 119-21 (the One Big Beautiful Bill Act, enacted July 2025), allocates 50 billion dollars across fiscal years 2026 to 2030, administered by CMS through state applications. State proposals for remote monitoring fleets and broadband-enabled clinics create procurement demand for connected devices in counties with limited hospital capacity. Vendors that bundle hardware, connectivity, and clinical analytics will win the largest state awards.

The Acute Hospital Care at Home waiver, first authorized under Section 1135 of the Social Security Act during the COVID-19 emergency, allows hospitals to treat qualifying patients at home with connected monitoring equipment. CMS's Health Tech Ecosystem initiative, launched in July 2025, invites technology firms to pledge interoperable, consumer-facing applications that connect to certified EHRs. Firms that certify early position themselves for hospital-at-home contracts.

Market at a Glance

Leading Market Participants

• Medtronic
• Philips
• GE HealthCare
• Abbott
• Dexcom
• Masimo
• iRhythm Technologies
• Teladoc Health
• Oracle Health
• Omron Healthcare

Regulatory and Policy Environment

The primary legislation is the 21st Century Cures Act (Public Law 114-255), administered by ONC, the CMS Interoperability and Patient Access Final Rule (CMS-9115-F), administered by CMS, and the Federal Food, Drug, and Cosmetic Act as amended by the Consolidated Appropriations Act, 2023, administered by FDA. Key compliance requirements include certified health IT under 45 CFR Part 170, FHIR-based patient access APIs, premarket cybersecurity documentation, and HIPAA safeguards enforced by HHS OCR. Upcoming changes include the HIPAA Security Rule final rule, expected in 2026 according to the HHS regulatory agenda, and ONC's HTI-series rules on decision support transparency.

Compared with regional peers, the U.S. framework is sector-specific and fragmented, whereas the European Union combines Regulation (EU) 2017/745 on medical devices with the European Health Data Space Regulation, which entered into force in 2025, creating a harmonized pre-market and data-access regime across member states. Canada licenses devices under the Medical Devices Regulations (SOR/98-282), offering a single national licensing pathway. The U.S. retains an advantage in reimbursement speed, since CMS payment codes are updated through the annual Physician Fee Schedule cycle, but it trails the EU in harmonized patient data-access rights.

Long-Term Policy Outlook for U.S. Connected Healthcare

By 2032, the HIPAA Security Rule amendments are expected to become binding, requiring annual compliance audits, restoration of critical systems within 72 hours, and asset inventories that cover connected devices. Congress must also decide whether Medicare telehealth flexibilities become permanent, a decision that determines whether remote monitoring codes retain their current volume economics. Both outcomes will define device portfolio planning for the forecast period.

The Rural Health Transformation Program will channel 50 billion dollars through fiscal years 2026 to 2030 to state-administered projects, favoring remote monitoring and broadband-enabled care in underserved counties. Consolidation is expected among device vendors that cannot meet Section 524B lifecycle obligations, while state privacy statutes modeled on Washington's My Health My Data Act spread across additional states before 2032. Vendors that document compliance early will capture the most durable public-sector contracts.