By asserting that 40% of U.S. adults would be "willing to pay" for mobile health applications, valuing the market at $7.7 billion, PricewaterhouseCoopers has opened up a dialogue on Twitter, in blogs and even in the mainstream press on whether consumers would really open up their wallets and spend money on personal health information technology.
A growing array of other influential industry analysts are offering promising mobile health forecasts. For example:
- Deloitte Center for Health Solutions' survey found that 50% of consumers want a "personal monitoring device" to alert and guide them to make improvements in their health or treat a condition;
- McKinsey's 2009 survey on mobile health asserted that "willingness to pay is high" for mobile health services such as a "phone doctor" and medication reminder. They estimate the mobile health market at $50 billion to $60 billion worldwide and $20 billion in the U.S.;
- Remote patient monitoring via mobile networks will be a $2 billion market by 2014, according to Juniper Research; and
Parks Associates projects the wireless home health monitoring market will reach $4.4 billion in 2013.
Behind these bullish, if varied, outlooks, are debates about the definition of mobile health, economics of the industry segment, and, ultimately, optimal business models.
What's mHealth, Anyway?
To measure a market, it's useful to define it -- and mobile health is in its formative, chaos phase of market immaturity. We're at the apex of the mobile health hype cycle, per Gartner's definition of "inflated expectations." What's included underneath the mobile health umbrella? Is everything mobile? If so, Eric Dishman argues in the Intel Health blog, then nothing is. Noting the proliferation of mhealth meetings, associations and initiatives, Dishman writes, "The phrase has become so slippery, so ubiquitous as to become almost useless. We must be more careful in defining and aligning what we're talking about."
There is a need to define what we're talking about so we can track developments and gather evidence on the effectiveness of mobile health tools: what they cost, how they benefit people, what works and what doesn't. Without the evidence of proof, whether in clinical trials or pilots resulting in well-reasoned research papers, payers won't pay for mobile health.
Defining 'Willingness To Pay'
One of the most media-covered aspects of the PwC report has been the finding that 40% of consumers are willing to pay for mobile health applications. To subscribe to a mobile phone-based service to help people manage their health, PwC's survey found that on a per-month subscription basis, one-half of consumers were willing to pay $5 at most.
Thus, while people express interest in using mobile health technologies from a "want" perspective, they're not that keen to pay much for it based on what they know about the purchase. On what basis then, are the multibillion dollar forecasts for mobile health calculated?
Market-rubber hits the road when it comes to people's willingness to pay for a product. We economists have a specific lens on consumers' willingness to pay: it falls into the economic theory of value. If something is worth having, it's worth paying for. When it comes to mobile health, consumers aren't yet connecting the dots toward "my health" and value.
There's a corollary here in consumer copayments for prescription drugs. Health care has largely been reimbursed by third parties and not by patients themselves. However, drug copays have been consumer-facing for decades. Medication adherence researchers know that the level of copay for a prescription drug can dissuade a consumer from filling a prescription. A matter of just a couple of dollars -- from a $5 to $10 copay for instance -- has turned people off to paying for a prescribed drug that treats a chronic condition like high blood pressure or diabetes.
To "nudge" people to take these drugs to manage chronic conditions, smart health plan benefit designers drop the copay for these drugs to zero -- that is, providing them for free. An artfully honed health plan does this to keep people on therapeutic regimens and out of the emergency department. In a total value-based health system, this conserves resources (i.e. money), promotes the patient's productivity and, over time, lowers employers' and plan sponsors' total benefit costs.
Back to Business (Models)
So we ask the questions: Who will buy mobile health services? Who derives the value from mobile health services in a total-value health story?
Health care in the U.S. is a fragmented, segmented business process. It's frequently the case that the return on investment in one area of the U.S. health system accrues to another party. This has been a long-standing argument among physicians who say their potential investment in health IT could result in benefits to health plans and patients, but not necessarily to the doctors themselves -- thus, the rationale for incentive payments to stimulate health IT adoption among physicians.
From the health citizen's personal ROI point of view, what does an investment of $5, $10 or $120 dollars (at a $10 subscription fee per month) yield to the patient himself? Perhaps better health outcomes, but the evidence base for that is still building. Until people are willing to take that leap of faith, it will largely be third parties who are managing health on an aggregate population basis who may reap the quantifiable benefits of mobile health.
In the meantime, one form of mobile health that might not be subsumed under conference organizers' paradigms is gaining traction among a growing number of health citizens: health social networks accessed via mobile platforms. The fact remains social networking in health is virtually "free," and is working for a growing number of patients and caregivers.
Perhaps the ultimate question is not to ask consumers, "What would you pay for a mobile health device?" But instead to ask,"What's your health worth to you?" That would get to the root of peoples' value in health. If people connect the dots between mobile health applications and their own health, or the health of those they love, they'll buy. If the benefits aren't transparent or proven, they won't. Developers of mobile health services looking to serve the consumer-facing retail health market will need to prove their case. In the meantime, it will take a lot of $5 per-member per-month subscriptions to sustain a mobile health business in the long run.