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Falls are a major problem in older adults worldwide with an estimated 30% of elderly adults over 65 years of age falling each year. The direct and indirect societal costs associated with falls are enormous. A system that could provide an accurate automated assessment of falls risk prior to falling would allow timely intervention and ease the burden on overstretched healthcare systems worldwide. An objective method for assessing falls risk using body-worn kinematic sensors is reported. The gait and balance of 349 community-dwelling elderly adults was assessed using body-worn sensors while each patient performed the “timed up and go” (TUG) test. Patients were also evaluated using the Berg balance scale (BBS). Of the 44 reported parameters derived from body-worn kinematic sensors, 29 provided significant discrimination between patients with a history of falls and those without. Cross-validated estimates of retrospective falls prediction performance using logistic regression models yielded a mean sensitivity of 77.3% and a mean specificity of 75.9%. This compares favorably to the cross-validated performance of logistic regression models based on the time taken to complete the TUG test (manually timed TUG) and the Berg balance score. These models yielded mean sensitivities of 58.0% and 57.8%, respectively, and mean specificities of 64.8% and 64.2%, respectively. Results suggest that this method offers an improvement over two standard falls risk assessments (TUG and BBS) and may have potential for use in supervised assessment of falls risk as part of a longitudinal monitoring protocol.