New report offers insight into fragmented mHealth market

The market for mobile health technology will reach an estimated $4.6 billion by 2014, according to a report released Friday by CSMG.

CSMG is the strategy division of consulting firm TMBG Global.

mHealth is already a $1.5 billion market according to CSMG, and it is expected to grow over the next five years at a 25 percent CAGR (compound annual growth rate). If certain broad healthcare reforms are instituted, such as pay-for-performance, adoption could accelerate.

The report mHealth: Taking the Pulse asserts that while the opportunities in the market are high, the market is so fragmented across many solutions and device types that it will be hard for a single player to take advantage of the opportunities.

"mHealth is well positioned to address the needs and evolution of the U.S. healthcare delivery because it provides cost-efficient care delivery and increases access to quality healthcare," said Rich Nespola, chairman and CEO of TMNG Global. "The proliferation of embedded wireless connected devices and smartphone growth creates significant transformational opportunities to deliver cost-effective and viable mobile healthcare options. However, broader reform of the healthcare industry structure is needed to reach the full potential for integrating mHealth into the U.S. healthcare delivery system."

CSMG outlines seven key mHealth technology opportunities that comprise the market, including monitoring, personal emergency response services, telemedicine, mobile medical equipment, mobile health information, RFID tracking and health/fitness software.

Among other key findings of the report:

  • In light of rapid rise in healthcare costs (already $2.5T in the United States and 17 percent of GDP), the FCC's National Broadband Plan estimates $700 billion in savings over 15-25 years from teleHealth initiatives.  
  • mHealth will need to gain reimbursement from payers as clinical solutions. Insurance/Medicare-paid mHealth solutions offer tremendous potential revenues, but also pose business model risks if reimbursement rates are cut. New solutions must demonstrate proof of efficacy to win reimbursement codes. To date, results have been mixed. 
  • Emergence of affordable mass-market consumer-grade health devices and software will provide consumers with unprecedented control and personal-responsibility for health.  
  • Given the complexity of mHealth, success will require collaboration across telecom and healthcare-centric players. For instance, mobile network operator and device OEMs' market entry strategies must address build/buy/partner implications that vary by potential mHealth solution.

According to CSMG, four key drivers will influence the pace and direction of mHealth evolution:

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