Health scores: The business of apps that aggregates health and fitness data into one score. Interview with Peter Ohnemus, CEO and founder of Dacadoo.

NEW: Our report “EU Countries’ mHealth App Market Ranking 2015” is out now. Download it for free.

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Health and fitness tracking apps became one of the most talked app categories in the app economy. They track steps, the consumed or burnt calories, glucose level, blood pressure and anything else that can be measured by sensors or connected to an app.

Health scoring apps aggregate health and fitness tracking data into one score, i.e. they use an algorithms to calculate e.g. activities, body information and personal moods into one number (see graph below).

Dacadoo has been one of the first companies that offered a health scoring system. Peter Ohnemus is the CEO and founder of Dacadoo. In the following interview Peter Ohnemus explains the concept and business model behind Dacadoo and shares his view on the main drivers and barriers of the mHealth app market.

Healthscore chart v.6

 

research2guidance (r2g): Mr. Ohnemus, can you please explain what Dacodoo does?

Peter Ohnemus, Dacadoo: We basically provide a health score in real-time on your smartphone on a scale between 1 (bad)  and 1,000 (good).  This health score is based on how you feel, the activities you do and other medical factors. By monitoring your health score over time you can see what impact it has to e.g. walk more, eat healthier or just to be more positive. You can compare and share your score with others if you like. Eventually you’ll find out what is good for you and what brings you closer to your health goals.

We did a lot of research for our Health Score algorithm. It is backed by 80 million man years of clinical data.

Our complete platform service offering combines mobile technologies, social networking and gamification elements to ease daily usage. The reporting views of Dacadoo show a detailed overview of the user’s health score and helps to understand the key influencers that affect it.

To ease data input our users are able to automatically connect with more than 30 sensors to  platform like Fitbit, Withings, Jawbone, Polar, etc.

The data is encrypted with a 256 key and we also run our own social network platform to prevent security issues coming from public social networks.

r2g: When did you start your business?

Peter Ohnemus: Dacadoo AG was founded in 2010. In the beginning we put a lot of effort in developing the Health Score algorithm. All together we spend over 3.5 years in research and development. In 2012 we started to license our product to our first customer a British healthcare operator. The next deal was made with a German health insurance company at the end of 2012.  We are now also working together with a German mobile operator and started to partner with companies in the USA, Australia, Russia and Japan.

r2g: What is your business model?

Peter Ohnemus: We sell our platform to our business customers (B2B licence model). We don’t sell directly to consumers. We offer two different licences. The first licence allows our business customers to make use of our algorithm as a white label solution. The second licence type additionally grants access to our full social media channels and other services that Dacadoo is providing in the digital prevention and lifestyle navigation space.

r2g: How many subscribers do you have?

Peter Ohnemus: At the moment we have 100,000 paying subscribers. At the end of 2014 we want to have 300,000 to 400,000 subscribers.

r2g: Which trends do you see in the health score area over the next five years?

Peter Ohnemus: We see that the data collection for health scores will be totally automated. The end-user will not have anything to do with the data collection. This will be achieved with passive sensors such as the M7 chip of the iPhone.

We think that people will adopt to health score concept – i.e. one cumulated number that everybody understands and which expresses the health status of the user.

Health scores will also allow a new kind of benchmarking.  For example a company could compare the health score of its employees over several years. We can also envision that companies have a health score balance sheet just like they have a financial balance sheet.

r2g: There are many health score businesses opening up. What does a company have to do in order to get the upper hand?

Peter Ohnemus: We think that those companies will win the race which are best able to seamlessly integrate the health, fitness, food, lifestyle and “feeling” data. Also privacy and security is a major issue. The company which offers the highest security standards will have a big advantage in the future.

r2g: Which drivers will shape the mHealth market in the next five years?

Peter Ohnemus: mHealth will become mission-critical. Over the last few years the mHealth market was a “pilot only” market. This will change in the next years as very large players are moving into the industry (disruptive change).

Big pharma companies will enter the market. Due to increasing cost pressure in healthcare, they will have to prove the success of their treatments, products and medical solutions.

Enterprise companies will start to put more effort behind maintaining and improving the overall health condition of their employees. With companies paying money for health services they will want to see a return on investment. With that, healthcare will become much more efficient.

The current “all you can eat” system will not be able to pay for the increasing healthcare costs in the future. In the USA health is already accounting for 17% of the GDP.

Privatization and increased transparency will be the main driver for efficiency in the healthcare market and a driver for the mHealth market as well.

r2g:  Where do you see the main barriers for the mHealth market in the next five years?

Peter Ohnemus: There will be a lot of resistance from the traditional healthcare players.

For example doctors and hospitals have not been used to be benchmarked in the past (no health outcome). A concept like the Health Score balance sheet for private and public organizations or a country is a totally new idea which will cause resistance early on, just like digital movies, books, newspapers, etc.

r2g: Do you see countries which are ahead of the curve?

Peter Ohnemus: I definitely see Denmark as a leading country. They introduced the digital health card already a few years ago. Singapore is also very active in the mHealth space. I believe that Obama Care with its public and private health exchanges will be a big push for the efficiency of the US health insurance system, technology and mHealth will play a major role going forward.

r2g:  What are your favorite apps?

Peter Ohnemus: I’m using Dacadoo and Moves for tracking. I also love Sonos for digital music streaming entertainment at home.

Thank you for the interview.

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