It could be both. 'Conditions' could refer to the "state of something" (as in the state/condition of the patient's stomach) or it could refer to a "medical illness" ( as in "the patient's condition is terminal; he has lung cancer.")
In the context of your example, 'traditionally tricky conditions' refers to a medical circumstance/state of being that is often difficult to diagnose or to treat with complete confidence. For example, a patient may tell the doctor that his stomach hurts. The doctor may suspect internal bleeding in the stomach but he can't be sure without performing additional tests, some of which might actually make the patient's 'condition' worse. The video pill is designed to provide the doctor with an inside view of the stomach that he wouldn't traditionally be able to see without performing invasive surgery.
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