Healthcare providers are taking telemedicine to new heights, with the market seeing growth of a whopping 237 percent within a five-year period, according to a new Kalorama report.

Officials say the telemedicine patient monitoring market grew from $4.2 billion in 2007 to more than $10 billion in 2012. According to the report, the market itself is considered small- to moderate in size but makes up for it with its notable number of competitors and "increasing awareness of effectiveness."

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Unlike the market for hospital systems, the telemedicine market proves more competitive, with vendors fragmented and a fair number of privately held companies, officials say. Compatibility between devices and applications is of primary concern. AMD, Philips, Second Opinion Telemedicine, Bosch and LifeWatch are among the many vendors competing in this market.

Aging populations, increases in healthcare costs, advancing technologies and the often cost effectiveness of patient monitoring are all reasons contributing to market growth. Sales will continue their upward trend, as older monitoring equipment is replaced by wireless or remote monitors. Growth will increase over the forecast period as compatibility, privacy and security issues continue to be resolved.

"The home healthcare and remote location health monitoring market is different from the hospital market, in large part because reimbursements are lower or are just beginning to take hold, and for some products are still nonexistent," said Melissa Elder, Kalorama analyst and the author of the report, in a press statement. "Unit costs will go up as older units are replaced with wireless, handheld and ambulatory devices."

Elder adds that home healthcare markets vendors sell lower-priced units than hospital patient monitors but the key for successful vendors will be selling a volume.

Heavy hitters in the worldwide telemedicine market include the U.S. and Switzerland. Research analysts say that economic hardships in many European countries have forced the government to review options to control costs in the healthcare system, which will present opportunities for telemedicine.

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