New report offers insight into fragmented mHealth market

By Bernie Monegain
02:02 PM
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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:

  • Mobile/connected device technology innovation drives near-to-mid-term growth.  
  • The appeal of mHealth will overcome short-term barriers on consumer concerns about the quality of mHealth solutions. 
  • Healthcare-specific technology developments such as adoption of electronic medical record will remove barriers to mHealth adoption. Broader healthcare industry reform will be required to reach the full market potential.

"While the mHealth market is creating significant opportunities for new players to enter the sector, there is no silver bullet for its success," said Susan Simmons, senior vice president, CSMG. "Mobile network operators, device OEMs and software providers bring technology capabilities and consumer-brand assets that current healthcare players may lack. New collaborations and new business models with traditional healthcare players along with thorough evaluations on the mHealth solution approach will be key to establishing the mHealth industry for the long term."
 
The report is based on executive interviews with key stakeholders in the mobile health market, including wireless service providers, healthcare software and hardware specialists, insurance providers, hospital systems and physician practices, as well as qualitative and quantitative strategic analysis of emerging trends and its impact on the mHealth market.