Smart Diagnostic and Monitoring Medical Device Market Trends

Growth Drivers

• Rising disease burden: The largest demand driver for continuous and remote monitoring devices is based on the rising chronic disease and aging populations. As per the CDC report in October 2024, nearly 6 in 10 people in the U.S. live with a chronic condition, resulting in the demand for long-term monitoring in cardiology, respiratory care, and diabetes. The government favors ambulatory management and early detection to reduce hospitalizations, providing a demand for innovative devices. Manufacturers align with the chronic care pathways and provide reduced admission rates to unlock payer uptake.

• AI and analytics value-stack: AI-enabled analytics in health devices convert the streaming device data into actionable triage and risk scores, increasing clinical value and payer willingness to reimburse. Manufacturers are actively embedding validated analytics to justify the premium pricing and subscription models. Further, NIH and EU research funding for AI diagnostics accelerates clinical validation pathways that support payer value cases. As per the NLM report in July 2025, nearly 1016 FDA-approved AI-enabled devices are developed in the U.S., marking a remarkable growth in the market.

• Patient affordability and reducing out-of-pocket burden: According to the Health System Tracker article released in August 2025, the out-of-pocket spending for physician and clinical services in the U.S. is estimated to be $245 per capita. Despite reimbursement, high out-of-pocket costs surge the adoption of home monitoring in developing markets. These financial burdens emphasize the importance of tiered pricing and subsidized programs to enhance the adherence of smart diagnostic device use. Further, the subscription models, evidence-based tiered pricing, and public-private procurement can mitigate affordability challenges.

FDA-Approved AI-Enabled Medical Devices: An Overview, 2024

Source: NLM, April 2025

Geographical Origin of AI enabled Medical Devices, 2024

Source: NLM

Challenges

• Regulatory barriers and market entry lag: Regulatory complexity is the major burden on diagnostic devices. According to the WHO, fragmented medical device regulations slow down the innovation adoption in low- and middle-income nations. For instance, Japan's new digital health device regulations of 2022 lag in certain smart monitoring approvals, which restricts timely access. Firms such as Philips countered this by establishing a robust regulatory-focused team, accelerating the implementation in several jurisdictions. Strategic alliances with regulators as well as pilot reimbursement programs have helped to avoid delays by assisting entry.