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This article discusses the impact of the new “iPhone market model” on the mHealth market. A full market report on mHealth will be published end of October.
mHealth solutions have been discussed since the end of the 90s. The benefits for patients and doctors of solutions that ease their daily lives are obvious. To give one example: the ability to use a mobile phone to allow doctors to remotely monitor the health condition of their patients offers clear benefits for improving healthcare delivery.
- eases the life of the patient (e.g. don’t have to stay at home)
- allows doctors to reduce regular visits
- enables hospitals to reduce their bed capacities ( patients can leave hospital earlier)
- allows health insurance providers to reduce their case related expenses
- improves patient outcomes through improved compliancy
The mHealth market never took off
There were very positive market projections indicating that the mHealth market would soon become a billion Dollar market at that time.
Based on those market estimates and the foreseen benefits for the users / patients, first movers developed mHealth solutions. They generally made use of existing PDAs and handheld computers or used SMS platforms to deliver their services to simple phones. The mHealth solutions which were developed between 2000 and 2008 very much resemble today’s mHealth applications in the various app stores. But with a few exceptions projects didn’t progress beyond the trial stage. Quite a few early mHealth solution providers discontinued their mHealth business. Even global players like Qualcomm have paused their LifeComm project which aimed to become the dominant mHealth platform in the world. The market was not ready to come out the trial phase at that time and did not manage to gain significant size.
What impact will mobile applications have on the mHealth market?
The question is now, what impact does the new smartphone application market model created by Apple in 2008 have on the mHealth market. Will smartphone apps become the killer application of the mHealth market? To answer the question one has to understand what stopped the early mHealth market from being successful and determine what impact the new market model has on those barriers.
The following table shows the main barriers which prevented the mHealth market from growing in the past and the changes the new model will bring:
1. Devices: Early solution providers had to live with limited device capabilities and in order to achieve successful market entry and profitability had to find hardware partners to develop the mobile device. Furthermore, reach was very limited for any kind of smarter phone. Many of the features that early solutions providers had to find special solutions for are now included as standard on smartphones (e.g. GPS or sensors). Reach of smartphones, although limited today, won’t be in 2 years time with the number of smartphone users projected to be 1 bn in 2013.
2. Distribution: In the “early days” mHealth solutions providers had to seek partnerships with MNOs in order to gain some support with the distribution of the service or had to do it on their own. The new market model offers global reach without having to deal with an MNO. Still, traditional distribution channels like doctors, hospitals and health insurance providers are not being affected by the new model.
3. Patients and doctors: The awareness of mHealth solutions was very limited. The new market model offers a better user experience along the entire value chain: discovery and access, billing and usage. The hype for smartphone apps also brings mHealth apps into the spotlight of its potential users. Still, one of the biggest target groups for mHealth solutions, the elderly, will have the biggest issues with technology adoption, although they would benefit most from mHealth application usage. This mismatch will not be changed by the new market model in the near future.
4. Regulations: The new market model has only limited impact on one of the key barriers – regulation. As long as mHealth solutions and services don’t get clearance from national regulators and are thus not reimbursable by health insurance providers, patients must pay expenses themselves. Doctors won’t prescribe e.g. a pill reminder application and will have no financial incentive to propose such solutions to the majority of their patients. The market will remain a consumer driven market, which means that the full potential will remain untapped. Another barrier remains the discussion around security and confidentiality of data. Major projects like electronic health records have been mandated a decade ago in some countries but implementation has been delayed until now mainly because of security and confidentiality reasons.
mHealth market might reach a new level
Looking at this balance of arguments it can be concluded that the new smartphone market model will help the mHealth market to reach a new level. The market will develop from a trial market to a global market, which is about to realize its full potential.
In our new report on the mHealth market, we will analyze in detail the impact of the new market model, the business opportunities for mHealth app publishers, and how the market will look like in 2015. The report will be published at the end of October 2010.
What do you think? Are smartphone apps the killer application for the mHealth industry?