In my last post, I highlighted some of the stories that got the most attention on the Health Tech Insider site this year. In this article, I’m going to call out the three most important developments in 2016, as I see it.

FDA Becomes Friendly to Wearables: The Food and Drug Administration (FDA) tends to move slowly when it comes to approving new treatments and therapies for medical conditions. In recent years, it has been noticeably slower to clear new technologies than its European Union equivalent, the “Conformité Européenne” (CE) mark. 2016 saw an apparent shift, however. The FDA has been proactive in trying to be clear about which types of products it will regulate, and what sort of requirements companies will have to meet in order to earn clearance. For example, the agency released guidance for “low-risk devices” that could help speed some products to market. The FDA approved a system that closes the loop between a continuous glucose monitor and an automated insulin pump, only requiring finger prick blood samples to calibrate the system twice a day. And the agency recently announced that it will not be enforcing regulations that require patients to get a prescription for hearing aids. The FDA is to be commended for its efforts to remove obstacles for innovation, while protecting consumers from ineffective or dangerous products.

Wearables Save Money: Wearable Health Tech devices have the potential to create enormous savings in healthcare costs, in the U.S. and around the world. In order to justify the investment in such products, however, we need solid data that demonstrates the return on investment. Research has been going on for years, but it feels as though the pace accelerated significantly in 2016. We saw more announcements of research projects and publication of new results. For example, one study demonstrated improved outcomes for heart patients who used a smartphone app as part of their rehabilitation. A new study in the U.S. was launched in the wake of U.K. National Health Service (NHS) research that showed “substantial reduction in diabetes care costs within 12 months” when using a Cloud-based system to monitor blood sugar levels and adjust insulin doses. And another study recorded significant reduction in hospital readmissions for cardiac patients, simply by monitoring their blood sugar (even if they had not been diagnosed with diabetes). The evidence is piling up rapidly, but we continue to need good quality studies that can clearly demonstrate the savings that can be generated by wearable Health Tech devices and other digital health technologies.

Consumer Infatuation May Be Waning: The initial drivers for the wearable industry included the low-hanging fruit of exercise and fitness enthusiasts, and of technology aficionados who want to have the latest and greatest gadgets. Apple Watch sales were not what many expected, raising questions about whether its market is saturated already. Fitbit continues to struggle in spite of its dominant market share (and its acquisition and dismantling of the Pebble smartwatch). Microsoft has bailed on the fitness band business, and Samsung has failed to gain traction with its products. While some in the media view this as the Death of the Wearable Industry, I view it as an inevitable transition to a more sustainable market. Companies that have a stake in healthcare costs — insurance companies, healthcare systems, and large employers — already have taken notice of the cost benefits of wearable and digital health technology. Aetna’s plans to subsidize Apple Watch purchases for its employees and some of its insurance clients is likely a bellwether for a new business model. Instead of selling one device to each of thousands of consumers, wearable companies will be looking to sell thousands of units to one client company.

So where does this lead us for 2017? I’ll share my thoughts about what the year ahead holds for wearable Health Tech devices in my next post.