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 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: Matthew Rossiter
Times are tough in the life
science financing environment, as underscored by numerous
recent news stories as well as quarterly statistics from Dow
Jones VentureSource and The
MoneyTree Report.
However, Fenwick’s First Half 2012 Life Science Venture Capital Survey highlights a few potential bright spots as well. In particular, while the number of life science financings declined significantly during the first half of 2012, our survey indicates that valuations have improved modestly, and we also see evidence that large biopharma and medical device companies are increasing their support of startup ventures.
Fenwick’s latest survey analyzes venture financings for 186 U.S.-based life science companies over the first half of 2012. One metric used to assess the health of the life science funding environment is to look at the change in share price from one round of funding to the next. In 2012, the trend has been positive, with average price increases of 19% and 26% for Q1 and Q2, in comparison to average price increases of 4% and 11% for Q1 and Q2 of 2011.
Another way to look at the data is to measure how many funding rounds occurred where the price per share increased (up rounds) or decreased (down rounds) from the previous round. For the first half of 2012, up rounds outpaced down rounds 53% to 19%, with 28% flat. This is a modest improvement over results from 2011, which averaged 47% up rounds and 25% down rounds, with 28% flat.
It is important to put these valuation trends in context: fewer life science financings are occurring, and the life science valuation figures trail those of other industries covered by our Silicon Valley Venture Capital Survey. However, the upward trend in valuations is an indication that startups are continuing to develop promising technologies that can justify a step up in valuation – in other words, there is a healthy supply of promising new ideas.
Likewise demand for new ideas with demonstrated potential, in the form of acquisitions of life science startups by large life science companies, also continues to be strong. A recent report from Silicon Valley Bank, as well as blog posts by Bruce Booth (Atlas Ventures) and Bijan Salehizadeh (NaviMed Capital), highlight the continuing strength of the current life science M&A market.
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 Shuster
Yesterday, the Senate approved the Food and Drug Administration Safety and Innovation Act (FDASIA) which provides reauthorization for major components of the Prescription Drug User Fee Act (PDUFA) set to expire at the end of September. An important development not being widely covered, is that the reconciled bill removes language that had been added by the Senate prohibiting the Food and Drug Administration (FDA) from final rulemaking on mobile medical apps and related technologies. As a result, the FDA is now free to issue final rules providing guidance for this rapidly growing industry. FDA draft guidance on mobile medical apps was issued in July of 2011. The legislative move is seen as a positive development for the emerging digital health sector.
Michael Shuster
By: Michael Esquivel
There are a lot of opportunities to be had creating mobile health apps for consumers. But there are still plenty of questions to be answered about how to build sustainable businesses. Who will pay for mhealth products? How will they be priced? At the recent Digital Health Investor Summit, co-hosted by Fenwick & West and Rock Health, the speakers addressed several key issues around revenue generation in this emerging sector.
Anne DeGheest of Healthtech Capital pointed out “apps are easy to launch, but have a high attrition rate.” Seasoned technology investor Sundeep Peechu of Felicis echoed Anne’s concerns and conveyed several mobile product axiom:
Continue reading "Pricing mobile health apps: Will consumers pay?" »
