Friday, June 25, 2010

It’s mHealth but will it be a Revolution?

The funny thing about “mHealth” is that it has taken on such a cult-like status among investors, industry and the media. Certainly the potential for the use of mHealth in the delivery of healthcare is huge and it may have an impact on other parts of healthcare such as chronic care management, emergency response services and the role and responsibilities of the consumer in their own health.

The market for mHealth is still in its infancy. There is still confusion about all that is encompassed in the term. It may include a mobile device or a service using mobile technology. The devices include an array of products and services that use mobile, wireless technology: cellular phones, wide-area, local-area and personal networks. These use different parts of the radio spectrum, different standards and protocols and different levels of signal strength or power. Generally the term mHealth does not include the use of satellite technology.

Some parts of mHealth are devices and services focused on direct consumer purchases and use. For example, the vast majority of the 6,000+ health-and-wellness smart phone applications are designed for use by consumers. However, when measured by dollar volume, these applications are probably smaller than other mobile devices and services aimed at the use in the traditional healthcare system.

The wide-spread media attraction in the mHealth market is because it’s new and it’s fun. It is still a bit of a Wild West atmosphere with new ideas and crazy applications coming up every day. Some include incredibly smart and exciting approaches to solving age old health care problems; others appear to be solutions in search of a problem. The investment money is flying out the door. Although there is a positive growth in sales, almost all of the mHealth companies or divisions have not yet made a profit. It reminds me a bit of the dot com (sometimes called the dot bomb) market of the 1990s. Certainly at this point mHealth is close to the top of the “hype cycle” (as described by Gartner, Inc). There are new associations and think tanks devoted to the subject, academic and commercial conferences galore. We are approaching the cycle's "Peak of Expectations."

For those on the sidelines it makes great fun. For developers and investors it is much more serious. It is a bit like a game of musical chairs. Most of the mHealth ventures are hoping to be bought up or merged into another, larger venture. At some point the music, or the outside funding, is going to stop (as we enter the Trough of Disillusionment) and those ventures not bought out or turning a profit will be in trouble.

But here is an important point – mHealth is not a stand-alone market. It is part of a mature, two trillion dollar healthcare business. To be successful, mHealth devices and services have to understand how the healthcare market operates; how it is funded and regulated; and, most important, how buying decisions are made. Developing a way to use a mobile device to measure blood glucose and send the data to another location may be interesting but is not nearly enough.

Further, relying on consumer expenditures for mHealth is probably not the answer for most such ventures. Out of pocket expenditures for healthcare in 2008 were a little below 12 percent, following a steady decline of over fifty years. This still represents a lot of money but it describes a public expectation that insurance, private or public, will pay for almost all of health care. Efforts to have consumers get more “skin in the game” will have only limited success when consumers are not even paying for their own drugs or eyeglasses anymore. Even the use of Flexible Spending Accounts will be restricted or eliminated as health reform is implemented.

Therefore, to recognize the benefits and opportunities offered by mHealth applications for healthcare delivery, they need to be incorporated into traditional healthcare financing and services. Surprisingly, despite the huge increase in health expenditures, the place where health dollars are spent has stayed relatively the same. Hospital care continues to be roughly one third of expenditures, physician services at about 20 percent and prescription drugs about 10 percent. Home health constitutes about 2 percent of national expenditures. What is changing is the source of these funds and who controls the spending. Accompanying the decline of direct consumer expenditures is the growth of public funding. On the horizon are more comprehensive regional healthcare networks with a broad authority to provide integrated, comprehensive care. This will dramatically accelerate with health reform.

The point of all of this is that the success of the mHealth revolution in the United States is directly linked with developments occurring in broader health reform and how mHealth applications may be an option for use in such developments as Accountable Care and Independence at Home initiatives. Such change is coming fast, really fast. In three to five years we may see an incredible change in the way various organizations are involved in health care delivery. It will be interesting to see how much mHealth is picked up and integrated into these changes.

Finally, assuming mHealth becomes recognized as an important component of mainstream health delivery, regulatory oversight is sure to increase. The Food and Drug Administration has played it light so far but the agency's role in reviewing and approving mHealth devices may grow. Similarly the Federal Trade Commission, Federal Communications Commission and all of their counterparts in other countries will also soon take notice and start similar regulatory oversight activities.

3 comments:

  1. Nice insights and review of the current mHealth "revolution". It reminds me of the eHealth "revolution" which over time transformed into the eHealth "evolution". Back in 1992 Federal policy "required" hospitals and other providers to implement electronic medical records (EMR) by 1997. Despite that unfunded mandate 18 years ago, less than 6% of hospitals or providers have EMR that are useful or functional for patient care.

    Now, with the passage of "healthcare reform" law and the new $40 billion dedicated to provide an "incentive" to physicians and hospitals over the next 5 years to implement EMRs perhaps it MAY become a reality with some type of mHealth component, but it needs to be tied to those issues you identified of "Accountable Care", and other payments, clinical systems in order to be "adopted" and "adapted" in the long term. Otherwise mHealth will give way to the next "new, new thing".

    Michael Ryan

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  2. Thank you Jon, for the deep insight in the mhealth opportunities and its present state. Well, talking about mhealth, all I can see is that"There is no Stopping ". With the way the world is moving ahead with mobility and healthcare being no exception to it, be it Life Sciences or Healthcare, the option of it being mobile is certainly going to be the top priority for healthcare institutions.

    Following up on one of your points mentioned in this edition, I would like to state that it is not too late before the details of the mobile devices will move on to regular mobile phones that will not only talk to devices via various mobility enablement technologies like bluetooth, infrared, SMS technology etc.

    The Hype Cycle mentioned by Gartner is going to be the truth that all of us are going to face and it is just that the experience has not come to be real...

    We are talking about healthcare for everyone everywhere... .Mobile technology is going to be the next big wave that has hit the medical and healthcare industry. Compliant systems following the likes of Part 11, HIPPA, HL7 etc make the solution even more robust and credible.

    Thus I would like to conclude by saying that the mhealth revolution is in and long to stay.. on making our lives better !

    Do keep in touch with me. It would be nice to share some information with you as we tread along the path of this new revolution.
    My email address is vikrant.patnaik@nowpos.com

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