Mobile health business models: Still a work in progress

Which mobile health business models are companies having success with? One takeaway from the digital health panel at MidAmerica Healthcare Venture Forum is that everyone, from startups to big players, is still trying to figure that out, and it’s not a one-size-fits-all matter. Payment reform is just one of the factors still in flux that […]

Which mobile health business models are companies having success with?

One takeaway from the digital health panel at MidAmerica Healthcare Venture Forum is that everyone, from startups to big players, is still trying to figure that out, and it’s not a one-size-fits-all matter.

Payment reform is just one of the factors still in flux that will affect the business of mobile health.

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Julie Kling, director of mHealth at Verizon Wireless, talked during the panel about one of the company’s products, a video-conferencing technology that allows physicians and patients to communicate and conduct virtual visits.

“[…] The (per-member-per-month) kind of service, and then a small fee for a visit, was the model that we initially determined,” she said. But, along the way, the company found that providers and payers weren’t interested in the service fee model.

“I’m finding that more customers are interested in, I’ll pay as I go,” Kling said. “I want to pay for that specific treatment and diagnosis, not for a service fee that may or may not bring any value.”

But, considering the growth of high-deductible health plans, companies must also consider consumers who pay out-of-pocket.

“They’re looking for convenience and they’re looking for something at a lower cost,” Kling said. “We then also have a whole different model of payments.”

Jack Young, director of the Qualcomm Life Fund at Qualcomm Ventures, illustrated the challenge of other mHealth business models with the example of a connected glucose monitor. If a normal blood glucose meter costs $20, but a connected one costs $100 plus service fees, what would drive the consumer to a connected one? Even if it would save costs down the line by driving better compliance and reduced waste, the up-front costs are hard for consumers to swallow.

“I think this industry has to work in gradual steps to realize the savings in small, incremental ways,” Young said.

One way is for companies to generate evidence that products will bring value to patients through pilot projects. “It’s becoming more critical for entrepreneurs to show returned value to be relevant,” said Amy Len, director of Healthbox. “It’s difficult; this is an industry that is very complex and very nuanced. It’s also an industry that’s not used to working with early-stage companies.”

That’s difficult, but more collaboration between stakeholders can help.

Kling added that as incentives become aligned, consumers will be willing to take on more costs. “And I think that as we build this industry and bring in those folks who have figured out the consumer experience, like Verizon or Apple or Google) […] I think we can combine what we know as clinicians with those people who understand consumerism.”

[Image credit: Flickr user Grant Kwok]