Source: Research2Guidance mHealth Developer Economics 2016
A new digital health report this week reads like a sherpa guide to the healthcare app landscape. It reveals that a startling 58,000 groups are behind 259,000 apps, most of them available for both iOS and Android stores. Some findings in Berlin-based Research 2 Guidance’s mHealth Developer Economics 2016 weren’t all that mindblowing. People with chronic conditions are by far the most common app target according to more than half of the 2,600 app developers surveyed, surpassing health and fitness user groups. But there were some surprising findings as well.
More insurance companies should develop apps Eighty-two percent of developers said they would like to see more apps from health insurance companies. Just a couple of years ago this may have seemed a surprising conclusion. It’s fair to say that at least some health insurers app development efforts have suffered from teething problems, such as Aetna. But only last month Aetna became the first healthcare organization to subsidize Apple Watch purchases. The apps that have come from payers have received “mediocre ratings” from healthcare app publishers. More than one in four of the groups surveyed for the report said they were of a lower standard compared with other healthcare apps and yet the majority of respondents said the quality is improving.
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It seems like a good idea for payers to cultivate marketplaces of apps they actually like help them and their members achieve their goals, especially if they can reduce healthcare costs. If they’re really that interested in developing their own apps, health insurance companies could use the marketplaces to gain insight into building more effective tools for their members. After app stores, payers are deemed to be the second most important distribution channel for health apps over the next five years, the report noted.
Who are the app developers? App publishers that have spent a few years developing healthcare apps dominate, accounting for 64 percent of companies in this segment. They have two to 10 healthcare apps in their portfolios. The percentage of newbies to healthcare apps spiked in 2015, with 22 percent launching their first app that year. More than half of healthcare app developers are technology companies without a background in healthcare but counter this obstacle by having a management team member with a healthcare background, investors or advisers with one. Although app development among traditional healthcare industry companies has increased to 28 percent, particularly medical device business (20 percent), followed by a split between pharma (14 percent) and hospitals (14 percent).
What’s the motivation? The survey of app developers revealed they are almost equally split between helping people better manage their health conditions (53 percent) to making money (52 percent) and gathering data is a close third (51 percent).
Revenue models This year app publishers are expected to generate more than $12.5 billion in sales from the services their apps provide from staff training to remote monitoring. The service with the highest value perception and
enforceable price is direct, one-time expert feedback through email, chat, or video
from a doctor, the report observed. For companies raking in more than $1 million in revenues, licensing is the preferred business model. These companies are also more likely to add on development fees, service sales, and sponsorship fees.
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Although the majority of the 43 percent of the publishers surveyed that claimed to have achieved “more than expected” with their healthcare apps, with annual revenues touching upwards of $5 million, 79 percent of mobile health app publishers achieved only lackluster revenues — $100,000 in revenues or less.
Source: research2guidance
Health APIs are becoming mainstream The portion of groups publishing mobile health apps connected to an API to push or pull data rose to 58 percent in 2016, the report found. compared with 42 percent last year. Apple HealthKit dominates at 69 percent, followed by Google Fit (44 percent) and Samsung S-Health (18 percent).
