Cost-Benefit Analysis of Wearable Biomedical Devices

Abstract

The wearable fitness tracker market has been on a path of continuous growth for the past ten years, from $20 billion in 2015 to $60.2 billion in 2025 [1], this represents an opportunity to explore the potential wearables have to reduce healthcare expenditures and improve patient outcomes. This paper addresses the question of whether wearables create significant healthcare savings through preventive health monitoring and chronic disease management. Analysis of the dataset from Zaleski and coworkers (2023), which includes 113,632 participants in a score-matched cohort study, shows that users of wearables have lower medical spending of $10 per user per month (P=0.02) [4]. This translates to $6.8 million in lower healthcare costs per year [4]. A strong negative relationship exists between device-assessed physical activity and healthcare expenditure reduction. Based on the 2014 study conducted for UnitedHealth by the research firm SavvySherpa, the Pearson correlation coefficient value is -0.986, meaning as physical activity increases, healthcare costs decrease, with high-activity individuals sustaining less than $5,000 in healthcare costs per year compared to $12,000 for inactive individuals [6]. These findings show that wearable devices are cost-effective interventions that increase quality-adjusted life years (QALYs), which evaluates the effectiveness of wearable usage at improving life length and quality [7]. As wearable adoption expands and technology integrates with preventive care, these devices have the potential to substantially lower population-level healthcare costs, support proactive disease management, and reinforce value-based care models [8]. The evidence positions wearables as scalable interventions capable of reshaping healthcare economics and outcomes.