How will businesses capitalize on the consumerization of healthcare?
While mHealth and wellness applications may appear to be interchangeable concepts, there are key differences in how they affect the life of the user as well as the business success of their providers. If your doctor advises you to begin a walking regimen for better health, you might choose to track your steps with a device to keep track of your progress. If the device and applications keep the data siloed with the individual, it would be considered a wellness product (e.g. activity trackers such as a FitBit or Jawbone. or diet apps like Lose It).
If the collected data was transmitted to your doctor directly or added to your medical record, it would be considered amobile health (mHealth) product. mHealth apps may help individuals track fitness, but the extra step of transmission to a third party like your life partner, children or Health Care Provider (HCP) is a critical differentiator and a potential marker for long-term viability of the product.
The widening gap between “wellness” (self-directed actions aimed at preventing illness) and “mHealth” (technology-based applications that allow a patient and a HCP to clinically interact from different locations) is dramatically impacting how startups, investors, healthcare professionals, and patients approach the joining of health and technology.
mHealth vs. Wellness: Transitioning Towards a Full View of Patient Health
Most wearables and wellness apps will only reach profitability when they are seen as a must have to control one’s health alongside a medical professional. Although the figure of 70% of Americans that tracked at least one health indicator in 2013 may statistically seduce an investor or entrepreneur into the wearables craze, wearable self-improvement devices are still subject to a continuous innovation cycle.
Despite the low cost of acquisition and high engagement, these devices and apps suffer from low retention. A reported 42% of people stop using fitness trackers after 6 months. In order to keep the momentum going, wellness products need to successfully transition to mHealth by integrating health data with a third party and or an EHR/physician. This will lead to a much higher retention rate and provide access to a market expected to grow to $59B by 2020. Biofeedback correlated with health data, such as medication adherence, wearables and all Internet of Things (IoT) health products, will be the only way to make the data useable.
By transitioning to an mHealth approach, the wearables and wellness markets will also have a new definition of success. “At the highest aspirational level, the goal is to improve the health and wellbeing of the public, but other measures of success depend on who you are in the health ecosystem,” said Scott Amyx founder and CEO of Amyx+McKinsey, a leading wearable strategy agency. “Success KPIs will differ depending whether they are patients, hospitals, healthcare providers, ancillary medical services, home care, ACOs, government, regulatory bodies, technology and service providers or IT infrastructure and hardware firms. Unfortunately, not all parties in the ecosystem are aligned on delivering affordable, high-quality care for the masses. Profit maximization is holding back healthcare reform and innovation, to an extent.”
One advantage of the ubiquity of wearables and wellness apps is the way it can support mHealth product penetration. Wearables like FitBit and Jawbone, accompanied by Bluetooth-connected apps, have flooded the consumer market, satisfying the demands of a growing segment of “Quantified Selfers”. The fact that millions of people independently buy, download, and track their steps and sleep suggest that this cultural movement emerged from a convergence of our narcissism, a desire to improve our health, and technological innovation.
From Apple’s HealthKit, which integrates with dozens of wellness apps, to Google’s Fit and Samsung’s S Health ecosystems, an increasing number of platforms have created new B2B2C marketing channels for future innovations. Yet, the question remains: do wellness apps that you personally monitor change your unhealthy behaviors? The downside of wellness solutions: if you control the data, it means you can hide it from the people monitoring your health and remove external accountability. That is why having mHealth solutions that fit within healthcare workflows is so vital to their long-term success.
Integrating mHealth into the U.S. Healthcare System
The products and services generated by mHealth companies should reduce overall healthcare costs as they help providers address some of the biggest healthcare issues head on. Currently, the U.S. healthcare system is complex, bureaucratic, and financially plagued by trends that include chronic disease, obesity, and longer life spans. To mitigate the financial impact of these trends on the U.S. healthcare system, providers must leverage real-time data analysis for intelligent and location-neutral diagnostic assessments.
By identifying and addressing health concerns on a proactive, location-neutral basis, mHealth will eliminate the time gap that often results in explosive costs for hospitals, HMOs, physicians, and insurers, who struggle to maintain profitability in the face of growing consumer demand for healthcare.
Furthermore, new applications will replace expensive diagnostic tools and reduce the need for unnecessary procedures.
The products and services generated by the mHealth market will improve outcomes as well. Health illiteracy in the U.S. ranges from 25%-50%, and medication non-adherence costs the U.S. healthcare system roughly $290b annually. For the first time in history, digital communication channels allow healthcare providers to track and analyze the extent to which patients are adhering to their medication regimens, offering guidance and support to patients who may suffer from forgetfulness, lack of support, emotional distress, and/or information overload.
Furthermore, new wearable monitors or apps gather biometric data that can be integrated with a healthcare provider’s EHR system, generating real-time assessments of patients that physicians from anywhere in the world can analyze and respond with immediate recommendations.
According to Amyx, while the requirement that wearable devices must be able to communication with EHR systems is certain, the real question in his mind is how it will be done in practice. “EHR vendors guard their closed systems, making high switching costs a credible deterrent for vendor change. That goes for APIs and interfaces too. Even those EHRs that do have API services, such as Epic, do not make their APIs available to the public,” said Amyx. “According a New England Journal of Medicine article: Escaping the EHR Trap—the Future of Health IT by Kenneth D. Mandl, M.D., M.P.H., and Isaac S. Kohane, M.D., Ph.D, EHR vendors stifle competition and innovation by controlling all of the data within their systems.”
“While there are open API initiatives underway such as Substitutable Medical Apps & Reusable Technology (SMART) Platform, OpenVista and EncounterPRO, the reality is that the oligopoly is not going away anytime soon, added Amyx. “In the meantime, it would behoove wearables and IoT firms to comply with the IHE Technical Frameworks and standards to access and integrate with EHR vendors.”
By combining cloud computing, big data, and digital communications, businesses can create sustainable enterprises catering to the consumerization of healthcare. However, in an ecosystem as complex as healthcare, success may require many different elements to come together.
The traditional healthtech startup approach has been to be acquired by the likes of McKesson, AthenaHealth, Cerner, Epic, GE, or Allscripts,”said Amyx. “However, to make a true, sustainable, industry-level impact, a startup will require support from all tiers of payers and providers to demand fundamental change and innovation from the bottom up.”
Ultimately, the rate at which outcomes improve and costs decline will be a function of how quickly HCPs adopt mHealth technologies. According to a recent survey from Research Now, 72 percent of healthcare professionals embrace the use of mobile applications for tracking patient health, predicated on the belief that mobile applications will encourage patients to take personal greater responsibility. In addition, 86% of physicians believe that mHealth will increase patient knowledge, contributing to higher rates of medication adherence and lower appointment cancellations.
“Successful adoption will require insiders to move the needle. Part of the reason Amyx+McKinsey partners with doctors and healthcare providers, in addition to traditional wearable and IoT startups, is because we recognize that in order for disruption to take a foothold. We need doctors creating solutions for doctors,” said Amyx. “Leadership and adoption will be divergent, but already wearables are nipping at their heels of the establishment, starting with medical device manufacturers.”
mHealth in 2015 and Beyond
mHealth-capable devices will penetrate user/patient data demand and make hospital operations a more efficient hub for the consumer, providing a better method and level of communication between providers and patients. Rather than relying solely on office visits, physicians who apply mHealth to their practice will easily monitor patients and engage with them wherever and whenever needed.
mHealth companies will transform the world of fitness apps and calorie trackers into customized, quantified, and health-oriented solutions for patients, providers, and physicians. As physicians acclimate to the mHealth movement and use mHealth tools to guide their patients, we will witness a healthcare revolution. Investors and businesses that can keep ahead of this trend are sure to capitalize on the opportunity.
Photo Credit: Fitbit/Wiki Commons