If you’ve been reading the mHealth blogs and analyst reports over Christmas and the New Year, you’ll have realised that medical apps are being promoted as being the next big thing. You’d be forgiven by thinking that by 2015 we’ll have given up on conventional medicine and the only reason we’ll be going to see our GP is because GPs will replace the Apps Store as the primary source of these apps. So, if you’ve any money left after Christmas the message seems to be to go and invest it in health apps development, as that’s where the cash will be.
Although it feels a little early in the year to be contrarian, I think that the industry is running before it can walk. Do we really think doctors are ready to be start practising the mantra of “first I’ll dispense an iPhone app; if that doesn’t work I’ll give them an Android one; and if they’re still not better I’ll put them on the Symbian app – if that doesn’t cure them, nothing will. They won’t come back after that!”.
I’m not knocking innovation in health apps. As I’ve said before the industry probably needs to think more out of the box than it currently is, but there are already lots around and there will be more to come. Whether they will transform our health is another matter, as is whether anyone will make money out of them. A lot of the current thinking seems to be making unsupportable jumps and simply inflating the mHealth bubble. Let’s look at whether it makes sense…
The headline figure that got everyone excited was a report from Kalorama estimating that the medical mobile apps market had grown from $41 million in 2009 to £84 million in 2010. The inference is that 2011 will be the start of the hockey stick, with untold riches in the years to come. Pyramid Research certainly think so, claiming that the number of apps will triple by 2012. Even JWT rate mHealth as being in the top 100 things to watch in 2011, coming in at position 49!
There is no doubt that the growth of Apps stores have seen a surge in health applications, even though the definition of “health” often stretches seamlessly into lifestyle, sports and fitness. Distimo have recently released a report covering the apps that have been released in 2010 which indicates that health and wellness is attracting plenty of interest. It’s the second fastest growing area for applications for the iPhone, and the fifth fastest for both Blackberry and Android. Symbian users are either much healthier or spending their time doing something else. Those figures are not just a reflection of by the hopes of developers. Pyramid research has been looking at the key players in the mobile healthcare chain and report that 70% of users would like to have a mobile application on their phone. Bear in mind that only 20% of phones currently being bought are classed as smartphones, and there’s either a mismatch here, or the bulk of those being surveyed either don’t understand the question, or are a highly selected portion of the population. That skew isn’t unusual – I’m constantly having to explain to devoted iPhone fans that it’s predominantly their friends who own them, not the other 95% of the population.
Incidentally, according to Neilsen the country with the highest percentage of smartphones, at least for younger users, is Italy. Which makes one wonder whether smartphone ownership is somehow linked to the health benefits of the Mediterranean diet? Or is it just about fashion? I suspect the latter. Incidentally, users in colder climates should be careful about trusting their health to a phone app, as Apple recently refused to repair a broken iPhone that had been used outside in Norway, claiming that using it below freezing invalidates the warranty. I hope that doesn’t mean that mHealth can only be used in California, as that could upset all of the analysts’ predictions. Companies in San Diego please note – there is another world.
Back to reality, and the question is who will make money out of mobile health apps? Going back to the Distimo report, they believe that the high download volumes of free applications compared to paid ones will mean developers look for other ways to get money from the user, rather than the direct purchase price of the application. That’s a trend that was very clear when I was speaking at Droidcon a few months ago. Developers were bemoaning the fact that the days of making money from selling apps had gone. Today they’re increasingly relying on advertising revenues, in-app purchases, or just being paid to write apps for larger companies. Even that last option is getting less profitable as more apps developers come online and development tools make it easier to write them.
The Distimo report has an interesting set of rankings comparing free and paid apps across the main platforms. It’s noticeable that there are no health apps in their top ten free listings, and only two paid health apps in any of the top ten lists – Sleep Cycle Alarm Clock for iPhone and Calorie Tracker for Blackberry. (Possibly implying that iPhone users sleep poorly because of nightmares about Steve shuffling off his mortal coil, and that Blackberry users eat too much.)
The various reports on the size of the market don’t spend too much time considering who will be writing health applications and why. One of the early sectors, perhaps not surprisingly, has been the pharmaceutical companies, particularly in the US where they can promote their products to the public. As they are using apps to hook users onto drugs (doubtlessly in a responsible way), these are invariably free. Even paid for health apps are generally cheap. According to vFluence the average is under $2 (Kalorama think it’s closer to $15, but that includes textbooks and medical references). The $2 figure sets a price point which the market will find difficult to increase. So business models need to be built around the provision of free apps.
TO make the free app model one, one route this is to brand them. Big Pharma’s already doing that, although they’ve recently started pulling some of their initial apps out of the Apple stores, which suggest the model still needs some tuning. Of course there may be ways to get people to pay. There has to be a market for celebrity health apps. So next time Britney catches a cold or Heston has a haemorrhoid problem, expect to see a premium priced celebrity heath app on a phone near you, either getting you to pay to see them recover, or buying a new generation of celebrity endorsed medication to treat your celebrity look-alike bug.
Of course, once GPs have finished reorganising the NHS over here in the UK, I’m sure they’ll all be brushing up their Java skills and showering us with a range of celebrity doctor apps. They already have a role model, as our former Health Minister – Lord Darzi, has written one. So we’re secure in the knowledge that the NHS has been saved and are all smugly expecting to live to a hundred with no health problems other than the occasional bout of swine flu. But we’ve still got lots of Tamiflu in stock, so that’s OK.
One area which does appear to have the potential to make some money is that of professional applications for doctors. It’s the only area where the medical industry has been able to expand its pricing into the mobile world. Many of these provide obvious benefit to doctors, but it’s unlikely that this pricing model will be sustainable outside the clinical world.
The number of different phone platforms doesn’t help the growth of this market. Research4Gudiance’s survey expects health applications to gravitate to the iPhone and Android platforms over the next four years. However, the iPhone may face a challenge over the next two years for applications that connect to patient sensors and consumer medical equipment. That’s down to a self-inflicted problem. Most of the health device manufacturers have decided to use Bluetooth for their wireless link. Although both Apple and Android support Bluetooth, Apple has blocked the profiles that are needed for these health devices and require manufacturers who want to connect to an iPhone to incorporate a proprietary Apple encryption chip within their blood pressure meter, weighing scale, or whatever device they may be manufacturing. That adds around $10 to the retail price. Not surprisingly, most manufacturers resent this and are not supporting iPhone connectivity. That gives Android, Blackberry and Symbian a distinct advantage as apps move from today’s position where users type in data, to the next generation, where that happens automatically. Which means that Apple needs to decide whether to stay proprietary and lose out in the emerging connected consumer medical device arena, or embrace a more open approach.
Going back to the analysts, what has been interesting is the different views on where users will purchase these health applications. Research4Guidance in Berlin have been surveying customers about this. Although they use apps stores today, the participants expect this to change. By 2015, 65% expected to get apps from their doctors, 68% from clinicians and 56% from specific health related web sites. Their survey is clearly about “traditional” health, as the main therapeutic areas that came up were the classic long term chronic conditions – diabetes, obesity, hypertension, asthma and COPD, with a strong showing for chronic heart disease as well. As such, the move to a medical distribution chain may reflect regulatory issues, as well as a continuing trust in the medical profession, even if that means them deploying new tools.
Of course, the big question is how doctors will make the transition from dispensing pills to dispensing apps? The survey highlights the dichotomy facing the GP – first of choosing apps for their own work, to help them to manage better, and then choosing apps to “sell” to their patients as part of their treatment. Some analysts, like Pyramid see a role for the network providers here, but I’m not sure I do. I was much more impressed by a company I met when I was chairing the Mobile Healthcare Industry Review at the King’s Fund before Christmas. It was a new company called Devices 4 Ltd. It’s structured as a non-profit organisation and has been working with the healthcare industry and is very aware of both parts of this problem. James Sherwin-Smith, their Chief Executive, was presenting the results of a survey that they had undertaken to see how UK health professionals were using mobile technology. 80% of the respondents carry a mobile phone at work, almost half to allow them to access information on the internet or intranet. Yet only 18% run a medical or health application. That would double if the phone was provided to them with work related apps. Over half of respondents, who were all health professionals, believed that they “would be more productive if they had a mobile phone for use at work”. The survey also highlighted that within the UK, using a mobile phone in a medical environment is still not allowed or frowned on for over a third of those surveyed.
The survey informs the role that d4 is aiming to fill. It’s quite shocking that over a third of health managers still see no benefit to medical staff using mobile phones. Even where they are allowed or tolerated, there’s no coordination about which phone or network to use, or which applications might be relevant to which job. Instead individual health workers are left to make that decision themselves. d4 is aiming to be the glue that brings that together, allowing information and best practice to be shared and to act as a group purchasing organisation for UK healthcare professionals. If you’re involved in healthcare, have a look at what they’re doing.
They’re not alone in understanding the problem. In the US, the Greater New York Hospital Association (GNYHA) has put together their own mobile health applications marketplace, called happtique. It has many of the same principles as d4, and I’m please to see they’re working together. Amid the hype surrounding mobile apps, they’re both bringing a much needed injection of sanity to those who may soon be at the sharp end of deploying them.
And if you’re one of the 19% of doctors without a smartphone, keep on dispensing the pink pills, followed by the white ones, with the blue ones as the prescription of last resort…