Mobile Health Market Drivers

The health IT market and more specifically the mobile health market are growing rapidly and will continue to do so over the short to medium term at the least. Reports predict growth of the mobile health market from 40 to 60 percent. Whatever the specific numbers, the market is big and growing. I often cite 50,000 mobile health apps in the iOS App Store — a stat that is dated – and that 250,000 people downloaded a health or fitness app last year.

I never buy research reports, but I’m happy to read summaries because they are more digestible. Research and Markets released a new mobile health report this month examining trends over the next four years. The report is over $1,200 if you want to buy the full version.

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One of the relevant findings is that the main driver of revenue in the market will come from services and hardware, not from apps themselves. Apps are a platform and will drive revenue from services they enable – such as premium services like virtual services. A great example of this is the app Better, which gives paying users access to Mayo Clinic providers. Apps will also help drive sales in hardware like hardware from Fitbit and Withings.

The report also predicts 10 trends that will shape the mobile health market.

  1. Smartphone user penetration will be the main driver for the mHealth uptake. I assume this means the growth of smartphone users generally will drive the mobile health market. More smartphones means more apps and services generally, not just in mobile health. It will certainly mean a higher percentage of health-related searches over mobile.
  2. mHealth applications will be tailored specifically for smartphones or tablets. I sure hope so. I’m kind of tired of seeing apps that aren’t tailored to mobile. Mobile is a different screen size and form factor, and making a Web app or page viewable on mobile doesn’t work.
  3. mHealth applications will be native rather than Web-based applications. This is an interesting finding. I don’t think that most apps will be truly native; I think they will likely be hybrid apps. More and more apps will be built by enterprises, may of them built using HTML5 or platforms like Kony to reach more devices. These Web-based apps will be wrapped and distributed as native apps. We’re starting to see more and more native apps connecting to other apps and passing data. This makes them more useful and less silo based, but this is really just starting.
  4. mHealth niche stores will become the home of the second generation of mHealth apps. I’m going to read into this because it’s at least related to something I’d be excited to see as a trend  — app formularies for different payers or providers. You could almost think of them as customized app stores. CarePass is doing some of this for Aetna with its list of partner apps. I’ve predicted these a few times, but these formularies haven’t really happened yet.
  5. Missing regulations are the main market barrier during the commercialization phase. We’re going to start to have more of an understanding of regulations as the FDA provides more guidance, and I don’t think this will be a major limiter.
  6. Buyers will continue to drive the market. “Which buyers” is the interesting question. Short to medium, it will be payers (including larger employers) and maybe Kaiser as an exception. On the quantified self front, we’ll continue to see consumers as buyers, but we’ll start to see some of these quantified services convert to being enterprise driven.
  7. Applications will enter traditional health distribution channels. Again, I really hope so. I think it will driven by payers and some select systems like Kaiser and Mayo. Hopefully we’ll start to see apps augmenting care, not replacing it.
  8. The mHealth market will grow mainly in countries with high smartphone penetration and health expenditure. This is probably a major driver of the overall market. That said, international organizations and funders in places like Africa have much lower barriers from a regulatory and financing perspective.
  9. Second-generation mHealth applications will focus on chronic diseases. We need apps to be integrated into care and with each other if they are going to be effective for chronic disease.
  10. mHealth business models will broaden. If we can get more people using health apps, I’m sure people will figure out how to monetize them. We need to see more business models based on larger organizations, like payers and providers.

The other major trend that I would add to this list is data integration and availability. We’ll start to see more consolidation, or at least attempts at data consolidation, in the mobile health market. Companies are flooding in to do this in the quantified self area, but it’s still just getting started.

What trends do you think we’ll see driving the market over the next four years?

TGphoto

Travis Good is an MD/MBA involved with health IT startups. More about me.

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