By: Michael Esquivel
Recently, the Pew Internet & American Life Project (the
“Pew
Internet Report”) reported that nearly 70% of Americans are monitoring one
or more health metrics for themselves or a loved one, but only 21% of those are
using a technology tool to help them keep track.
Furthermore, of those who are using technology to track health metrics, only 7% are using apps or other tools on a mobile device. In contrast, half of the respondents indicated that they track health metrics “in their head,” and another 34% said they track health data on paper.
I recently had a conversation with Pam Dolan at American Medical News about the Pew Internet Report. She covered the findings in a story titled, “Has mobile health monitoring hit a wall?” Despite the title’s implication, what I conveyed to her is my strong sense of optimism in looking at these numbers. When you realize that 70% of people in the U.S. are currently tracking data related to their health and that only a small percentage of that group are using technology to help, the potential for growth is both tremendous and clear. What’s surprising is that most commentaries on the report have characterized the findings as proof that the digital health market has plateaued.
People are buying and using digital health devices and apps in record numbers. The concern is that once the novelty wears off users lose interest and, consequently, engagement wanes. This concern in turn has led to a huge focus on providing actionable and meaningful data that actually improves your health.
As Jack Young of Qualcomm Life Fund has commented, the perfect mobile health device is a bathroom scale that records your weight and transmits the information to your computer where it is tracked over time. It’s passive, usable, actionable, and doesn’t require the user to change their routine.
The take away of the Pew Internet Report is not that Americans’ interest in using digital and mobile tools to track health metrics has plateaued, but rather that we are only beginning to learn how to develop the right technologies that will empower us to more actively engage with our health.
By: Michael Esquivel
The New York Times’ health and science blog, Well,
recently published a post discussing the results of an informal quest to find
the price of a hip transplant. The
post received widespread attention and commentary because of its
unfortunate results: it was nearly impossible to get a price quote, and the
price quotes that were obtained varied by a factor of 10 and bore no
relationship to either the reputational quality of the healthcare provider or
the quality of the surgical services to be provided. Some of the most well-regarded
hospitals quoted some of the most reasonable prices, while some less highly
regarded hospitals quoted very high prices. The bottom line: there is currently
little price transparency or rationality in the healthcare system. As a result,
there is no 'market' in healthcare, yet.
Fortunately there are startups that are seeking to address this lack of transparency. Castlight Health, a Fenwick & West client, is a leader in this emerging space. Some insurers, moreover, are also trying to cut through the pricing opacity. The Arizona Republic recently reported that some insurers, as well as the federal government, are beginning to provide pricing information through web-based tools.
Irrespective of how we get there, price transparency—leading to price rationality—has the potential to jumpstart the transformation of healthcare. Price transparency, in addition to potentially lowering cost, also has the potential to spur behavioral change. Once individual consumers understand the true cost of healthcare, and that they are—one way or another—paying for it, they may become more active in their pursuit of wellness.
And it is becoming easier to pursue active wellness today than ever before. Hundreds of new devices and apps allow individuals to monitor various aspects of their health condition, which has in turn powered the quantified self movement. For now, quantified self is mostly about understanding one's activity level (or lack thereof) and basic biosigns such as heart rate, blood pressure, blood glucose and so forth. But eventually it has the potential to lead to individual empowerment on a molecular level. Spotting a dangerous biomarker before physical symptoms manifest could potentially lead to early detection of serious illnesses, and consequently early intervention. Early detection and intervention leads to better outcomes, which further reduces cost—a beneficial loop for individuals and healthcare as a whole.
By: Michael Esquivel
The question of whether or not smartphone apps can play an important role in the delivery of healthcare services has been more or less answered with a resounding yes. From weight loss to diabetes monitoring to diagnosing ear infections, successful digital health models and pilot programs have provided compelling proof of concept that there is potential to improve users’ well being and health through the use of these apps.
The remaining questions are: who will pay for these apps, and how will the developers make money? For now, the partial answer is that individual patients and consumers are the buyers of these mobile health apps. In today’s healthcare market, consumers do not typically pay directly for products or services; nor do they usually pay for 100% of the actual cost. Those expenses are borne by payers, a combination of private insurance providers, public insurers (e.g., Medicare and Medicaid), and employers who either pay a significant portion of the cost of private healthcare insurance for their employees or are self-insured.
By: Michael Esquivel
According to a recent report
released by Rock Health, Big Data has the potential to save the healthcare
system more than $300 billion per year by improving poorly coordinated care,
reducing fraud and abuse, and improving administrative and clinical efficiency.
Big Data refers to the insights that organizations—in this case providers,
payers, and drug and device development companies—can gain from analysis of
growing sources of structured and unstructured data from electronic medical
records, sensors, and smart phones. Collecting and analyzing the vast amount of
data currently available provides the opportunity to identify trends or
patterns to improve quality and lower the cost of care. Big Data applications
(apps), for example, could identify leading causes of hospital-acquired
infections or readmissions, which could lead to better preventative measures while
lowering the cost of care.
Continue reading "Big Data Could Save Healthcare System $300+ Billion Annually" »
By: Michael Esquivel
The Federal
Trade Commission (FTC or Commission) recently published a guide, Marketing
your Mobile App: Get it Right From the Start, to help mobile app developers understand
FTC advertising and privacy rules. The publication follows agency actions
against two mobile app developers regarding information collection and product claims.
In one such agency action, an app developer paid $50,000 to
settle FTC charges that
it failed to require parental notice and consent before collecting and
disclosing children’s personal information.
A second developer settled with the Commission after claiming without
proper substantiation that its mobile app treated acne. Advertising claims and
privacy issues both have special importance for digital health and mobile
health developers because of heightened advertising and privacy concerns for
products that make health or safety claims or collect medical information.
For marketing and advertising, the FTC focuses on the truthfulness of claims and proper disclosure of the information. Specifically, in advertising their product, app developers should have solid proof of objective claims about what the app can do. The FTC advises additional caution when marketing apps that have health or safety benefits. Such claims may require what the FTC calls competent and reliable scientific evidence. Precisely what constitutes competent and reliable scientific evidence has been subject to some interpretation. In the past, the FTC defined acceptable scientific evidence as "tests, analyses, research, studies, or other evidence based upon the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results” [Brakeguard Products, Inc., 125 F.T.C. 138 (1998)]. For most companies, including app developers, this may mean referencing existing scientific data or studies to substantiate claims about health or safety benefits of a product.
Continue reading "“Clear and Conspicuous” FTC Guidance on Marketing Mobile Apps" »
By: Michael Esquivel
From the minute you stepped off the elevator at Rock
Health’s annual Health Innovation Summit on Tuesday, there was an undeniable energy.
The sold out event was jam-packed with entrepreneurs, investors and health and
technology innovators. An all-star line up of speakers consistently delivered
useful insights throughout the day. But first, Rock Health CEO Halle Tecco, led
off the day with some big
news.
Tecco announced a partnership that provides each startup joining Rock Health with a $100,000 investment from four high profile venture investors: Aberdare Ventures, Kleiner Perkins Caufield & Byers, Mayo Clinic, and Mohr Davidow Ventures. Leading off on a high note, the day continued as Intel founder Andy Grove delivered his keynote.
Grove set the stage for why Job 1 in digital health innovation must be to “Free the Data!” Ending his discussion with that proclamation met with enthusiastic applause from the audience. He also introduced the concept of M(ed)SRP or medical suggested retail price, making an analogy to the auto industry. Historically new car pricing moved from a system with markups and discounts varying significantly to one in which standardized pricing was established and openly disclosed. Grove sees that historical precedent as a path forward for medical services, creating greater price consistency and upfront disclosure.
Over the course of the day, two camps appeared to emerge – those who believe the time is right for massive, paradigm shifting innovation that comes from working outside of the existing healthcare infrastructure. As Vinod Khosla stated – innovation comes from the fringes - start there. Another camp, already established in healthcare, advocated for incremental changes that can be made from within the system and current regulatory framework. Though a dichotomy exists, I don't view these two paths forward as being at odds. Rather, both avenues can and should be explored in parallel.
By: Michael Esquivel
Yesterday afternoon, the 2012 Health Innovation Summit, hosted by digital health seed accelerator, Rock Health, began in San Francisco. The event kicked off with a tour of a few of the leading digital health companies and investors, including: One Medical, IDEO, KEAS, Practice Fusion, Weight Watchers, MedHelp, and Aberdare.
The summit will bring together innovators, strategic partners and investors from diverse disciplines and backgrounds to accelerate the ongoing discussion and actions around changing health. Underlying this acceleration is the central notion that collaboration will help us go beyond simply intertwining healthcare and technology together and instead find convergence.
The new consumer-driven face of healthcare is emerging and creating unprecedented demand for technologies that will help consumers improve and manage their health. I can't help but note that the paradigm shifting innovations in handheld/mobile devices and smart phones that we've seen over the past few years have been fundamental to unleashing this revolution in digital health. As a result, consumers are in the driver’s seat, armed with a new understanding and appreciation of the evolving mobile environment, which has undoubtedly raised our expectations around user experience and how each of us can more effectively (and efficiently) access and consume healthcare and other services.
I'm looking forward to the program and the lineup of incredible speakers that includes true technology innovators and visionaries, leading research and medical experts and preeminent journalists and thought leaders. See you later today at #HiSum.
By: Michael Esquivel
The New York Times recently ran a story titled, “It’s hard to stay friends with an exercise monitor” that underscored a problem facing many health and fitness apps – the risk that users quickly lose interest.
Initially users are enthusiastic about the transformational potential of the personal health data collected by wearable technology devices such as the Nike+ FuelBand. That initial enthusiasm, however, appears to largely diminish if the metrics tied to that data are confusing or inconsistent. As noted in The New York Times story, while the Nike+ FuelBand has been criticized for its inconsistent and sometimes bizarre feedback, its ambition to provide meaningful and actionable metrics by awarding points should be recognized as a helpful first step in realizing the tremendous potential of these wearable technology devices.
But meaningful feedback should involve more than points and badges. As Aimee Jungman, VP of Innovation at frog design, pointed out at our Digital Health Summit in June, to create stickiness, mHealth products have to put data in the context of an aspiration or goal; and that data has to be actionable.
Furthermore, social interaction needs to move beyond simply telling your Facebook friends how far you’ve walked or run in a given day. It needs to be able to include, for example, virtual coaches and mentors.
In the rapidly evolving digital health sector, some early mHealth products will probably go the way of the pet rock, but each iteration teaches us more about what it takes not only to capture users but also to retain them.
By: Michael Esquivel
A few weeks back I wrote about the challenges of pricing mobile apps. Now, as reported in MobiHealthNews, IMS Research in the UK has collected some hard data on consumer spending habits for sports and fitness apps. Separately, MobiHealthNews reported this week that the average price for a health-related app in Apple's AppStore dropped in 2012 to $2.05 from $2.34 in 2010.
Over 60% of the survey respondents who owned smartphones and exercised regularly said that they would be willing to purchase apps and sensors to monitor their performance. However, the overwhelming majority (almost 80%) indicated they would not be willing to pay much more than $3.00 for an app.
The good news is that the same respondents said they would be willing to pay significantly more – up to $140 – for a sensor (or companion hardware device) that accompanies a fitness app. These sensors, combined with Bluetooth-enabled smartphones, can replace dedicated devices that would otherwise be purchased separately.
The willingness of consumers to invest in companion hardware for their fitness apps increases the ARPU (Average Revenue Per User) to a more appealing range for entrepreneurs who are considering entering the mobile health (mHealth) or healthcare IT space. At Fenwick’s Digital Health Investor Summit in June, Sundeep Peechu of Felicis, said that for many companies a sustainable business model is achievable with an ARPU of $25 or higher. In addition, research has shown that the larger economic investment required for apps in that ARPU range actually helps to keep users engaged and prevent attrition.
The bottom line of this study is that consumers appear to place more value on sensors and other hardware than on the underlying supporting apps, a fact that companies developing mHealth pricing strategies should keep in mind.
