mHealth13: Lots Going On, But Few New Developments

precamAnother year, another mHealth Summit.

HIMSS’ younger sibling has slowly grown over the last five years, a period that has seen a Precambrian explosion of companies and advances in mobile tech. However, despite some early hints of maturity, the mHealth Summit revealed the mobile healthcare market’s overall identity confusion. Replace the old, or integrate with it? Add more functionality, or pare down and simplify? Is this a market driven by need, or want? Beyond the hype and the bold claims set forth by the usual suspects, mHealth’s central challenge is one of adoption: Neither consumers nor health care organizations are picking up mobile for healthcare at the pace and scale that vendors are claiming and hoping they will.

Evangelists have defaulted to pointing out the broader trends, waving around the hockey stick charts of mobile phone adoption worldwide, and referencing data about consumer mobile searches for healthcare data. We’ve seen those too. But let’s just be honest here for a moment – nobody cares if we are all becoming handset hypochondriacs. When we talk mHealth, we hope for clinical interventions, enhanced communication, behavior improvements, incorporation of patient-generated data, and so forth. To give credit where it is due, tireless efforts by HIMSS and their tradeshow peers, the vendor community, the public sector, and many others have begun to result in a vision for how mobile tools can improve how we plan for, pay for, deliver, and otherwise manage health care.

But it is still largely just a vision as we are not quite there yet. Progress is bubbling up along with a fresh set of challenges. Here are some more thoughts from DC, from regulation to startups, and product strategy to marketplace realities.

Can Someone Please Regulate the FDA?

The FDA’s recent ruling on mHealth has caused more confusion than it has cleared up. The agency offered little direction in its September ruling, sending mHIMSS’ network of experts scrambling to provide translation and guidance for the rest of us. Regulation is a central concern as this industry keeps trying to move past Powerpoint platitudes and into mobile-enabled clinical care in the home. As such, regulation aimed at protecting consumers generated much buzz at this year’s summit, with over half a dozen sessions involving some aspect of FDA regulation and still others geared towards privacy, security, BYOD policy, etc.

23andMe’s recent shaming by the FDA was a harsh reminder that regulation is serious business. Much can be written about this subject (Dan from Athena, a panelist at one session, does a nice job here) – but suffice to say it has become clear that HHS’ goals are out of sync with those of the FDA, which seems to have very little appetite for even the potential mitigation of an iota of patient safety for the sake of innovation. As heard at the water cooler after one regulation-focused session, “This is like HIPAA on steroids.” Unfortunately, this risk aversion is anathema to the nature of the risk-taking crop of entrepreneurs and innovators who have lined up to take a crack at driving improvements in healthcare.

If Startups are the Answer…What is the Question Again?

The mHealth Summit is becoming an official party for the world of healthcare startups, the overwhelming majority of which are now tech plays involving a smartphone app. Driving  (and capitalizing on) this trend, Health2.0 and StartupHealth each had a strong presence at this year’s Summit. Starting up a tech outfit is cheaper, cooler, and easier than ever before. It is certain that we badly need an injection of the energy, creativity, talent, and perspective of the entrepreneurial crowd – and the injection of capital from the long and growing list of VC firms and corporate investment arms doesn’t hurt either. Historically, we’ve all wondered whether these fledgling companies are ready to take on healthcare; For the first time, this year’s summit evoked the question of whether or not the industry is actually ready for these startups to disrupt it.

One seasoned VC at the Venture+ Forum, a daylong prelude to the actual conference, actually advised startups NOT to design products based on the ACO model, as value-based reimbursement is frankly not here yet; startups who need revenue in short order may be better served by basing their business model and strategy on the FFS-driven status quo. This notion, that innovation might be “too early” is not new in healthcare; several tales emerged across multiple sessions of failed good ideas like telemonitoring companies in the 90’s and premature doctor messaging networks in the early 2000’s.

The uphill road faced by startups is a broader reflection of our healthcare system’s challenges: Target customers have a deeply engrained resistance to change, are overburdened and under-resourced, and in many cases, still seemingly think of mobile tech as fools’ gold. Despite the occasional pilots or acquisitions trickling into our twitter feeds, there was a noticeable absence of “big” announcements or deals at the Summit.  So while we anticipate the majority of the dozens of startups who exhibited in the StartupHealth Pavilion will not be around in 3-5 years, perhaps this is just an evolutionary phase.

To be sure, there are still plenty of half-baked ideas out there. Some of the young companies we chatted with, from monitoring hardware plays to software engagement outfits, were woefully underinformed about some fundamentals: the need for properly structured data (Literally: “What’s HL7?”), the ignorance of a multiple-portals-per-patient approach, and even uncertainty of the difference between inpatient and ambulatory care. And these were not salespeople, they were founders.

Even startups that “make it” face an unclear future. At the Venture+ Summit, one company with multiple live pilots announced it recently closed a plump Series A round, but when we circled back with the CMIO at one of those hospitals, he had this to say via e-mail: “They are doing something with our [subspecialty] folks. I’m pretty sure it’s not large. I’ve visited with [founder] several times, but I don’t see how what they offer scales to a diverse patient population.” A myopic focus on a delivery system niche might help to secure funding, but reflects how startups are encouraged by their investors to think about scaling in terms of adding customers, rather than going deeper and wider within one organization. What is best for the startup might not be best for the HCO.

By the Darwinian school of thought, successful companies will be the more adaptive ones who are aware of market dynamics beyond the cookie cutter slide deck stats and buzzwords. Indeed, in observing some of the successful players and a engaging diverse set of discussions at this year’s summit, we gained some valuable insight about how mobile integration into the broader health enterprise necessitates product pivots, strategy shifts, and of course, a little bit of luck.  For example, simply singing about “data” holds less appeal than it did a few years ago: HCO’s are stretched thin due to health reform, MU, ICD, and so on – they are really only interested in things that will save them money or make them money. Pharma wants specific value-adds, such as adherence, or trials recruitment. Moreover, it’s still proving tricky to incorporate user-generated data into the enterprise.

A noteworthy example of a company capitalizing on these trends is Validic. Originally conceived as a wellness platform in 2010, they had trouble landing customers until last year, when they pivoted into an integration platform for device-generated data. Sales have since taken off, with support from blue chip investors like Mark Cuban, and are on track to have 30M lives covered by Q1 2014. As other entrants identify badly needed pieces of the puzzle, we hope to see more such gaps get plugged. The takeaway here is that product strategy matters a lot in mHealth, and a recurring theme out of this Summit was that embedding a key piece of technology within other products is a safer way to create new distribution channels. In a word: Partnerships.

The Rising Tide will Lift all (Partner)Ships

mHealth companies of all types are sensing that the quickest path forward in today’s competitive, overregulated, and change-resistant healthcare environment is to join forces with others. For startups, this might mean changing product strategy to provide the equivalent of a middleware service. More established companies like Nuance have positioned themselves squarely as leaders in a certain niche (voice recognition), setting themselves up to refine and evolve their technology based on emerging needs of the marketplace, while expanding their footprint through their partners’ deployments. In their case, they have added early “AI” functionality that interacts seamlessly with clinicians’ voice commands to guide them towards more accurate diagnoses (think autocorrect for dictation.) This “Trojan Horse” strategy leaves them poised to capitalize in multiple areas from ICD-10 to the coming wave of smartphone-driven patient engagement plays, as evidenced by their presence in Sharecare’s latest app. Tellingly, healthcare has grown to comprise half of their business.

Still larger in scale is the ecosystem approach, where vendors provide the plumbing, the infrastructure, and/or the devices, and bring on a spate of partners for actual health care products and services.  The model to emulate here is QualComm, who had the largest floor presence and has steadily turned their 2net platform into a rich offering of dozens of devices, apps, and other solutions to over 200 diverse customers worldwide. Not as successful are the Telecoms: AT&T and Sprint both seem to be building anemic versions of such a platform with small handfuls of promoted partners, while Verizon continues to stubbornly insist it is a real health care company, hiring a CMO and building out complete but wobbly-looking platforms for remote care management and virtual visits. There are no paying customers yet, but they did have a sweet video you could watch on loop at their booth.

As an aside – There is mounting eyebrow-raising going on internally at Chilmark with regards to all things telecom. Rather than focusing on a couple of obvious features where they could offer unique value – televisits, or pre-loaded smartphones, for example – these tech-driven, resource-loaded, and market-permeating behemoths seem to be trying everything and doing nothing well. One VC’s pithy remark to startups applies equally to this crowd: “Revenue is the greatest proof of concept.” Despite having the largest booths at the conference, our probing of the TeleComs did not result in a mention of a single live paying customer in mobile – just internal launches, repeated defaulting to old HIE partnerships from years ago, or shifty mentions of forthcoming press releases in 2014.

All of this simply confirms what we already know: The connected health model will be built upon a best-of-breed ecosystem of companies and technologies, rather than one soup-to-nuts vendor offering. This is highly different from the monolithic world of EHR and HIE vendors that many CIOs are used to planning and budgeting for. Indeed, one of the reasons for the lag in adoption in mobile health to date may well be that decision makers are simply overwhelmed with all of the options that are out there. As companies die on the vine, get acquired, prove their salt, or join partnerships, this menu will condense. In the meantime, working with one vendor who can offer a large, curated menu of solutions is simply an easier, albeit more expensive, option.

Conclusions and Awards

We look forward to seeing the continued maturity of this market, as well as this conference. While relatively well-run overall, the sessions were repetitive and watered-down at times, with a decidedly mixed quality of speakers and plenty of off-topic or mistitled presentations. Three days may be too much at this juncture, as many sessions were sparsely attended by the afternoons (By Wednesday the place was a veritable ghosttown), but as we have pointed out before, this conference is ultimately about HIMSS’ bottom line. Seemingly the agenda was designed to fill the cavernous Gaylord Convention Center, rather than curated to any extent for attendees’ benefit.

Moving forward, we hope to see less of the bad, most notably the abysmal (Note to HIMSS: ABYSMAL!) wi-fi access, mediocre keynotes, and session overload/redundancy. We also look forward to more of the good stuff, from effective customer service (notably, the highly responsive twitter support) to the occasional talks by thought leaders (fantastic insight this year from Harry Greenspun, Lisa Suennen, Stuart Blitz, Matt Hendricks, Stephen Bloch) to the welcome diversity compared to the annual HIMSS conference – at one point this analyst was on an escalator between an elderly Indian woman in a sari and an African gentleman wearing a kufi. Good stuff.

To close, here are our awards for vendor swag:

  • Best: Imprivata’s black gripped gloves. Timing is everything, and in the middle of a snowstorm, free winter gear wins.
  • Runner-Up: GopherMD’s Gopher – Stuffed Animals? Yes please.
  • Second Worst: Everything else – pens and keychains? Yawn.
  • Worst: Ionu’s “Digital Privacy Please” door hanger. My room didn’t have a standard privacy sign for some reason, so I thought it was a clever (albeit cheesy) touch when Ionu’s branded sign was slipped under my door the next morning. I hung it on the doorknob, but to my later dismay the housekeeping service came in anyway. Just another example of a vendor not being able to deliver on the promises in their advertising.
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Posted in Connected Health, Consumer Engagement, consumer health, mHealth, telemedicine
2 comments on “mHealth13: Lots Going On, But Few New Developments
  1. Bill Prenovitz says:

    A great overview of technology companies chasing the provider and third party markets. But you didn’t mention the option of private pay by consumers. If you look at what consumers will pay for convenience, its encouraging to think about they will pay (and are paying for) health and wellness. For business models, I suggest people look beyond device-based products to other services which incorporate technology but are far more than an app on a smartphone.

    • John says:

      Valid point Bill a point reflected by the proliferation of health/fitness tracking devices. But this particular market is of limited size. Just looking at my own family, who are are quite athletic, I’m the only one who uses a device (HR monitor) and that’s only when cycling.

      Agree consumers will pay for convenience and the healthcare sector may finally begin responding to this (haven’t seen it yet outside concierge care). Deductibles are increasing, consumers want ease of access and mobile is an ideal vehicle for providing such. But what is not happening at a rate that will support all these novel mHealth solutions and services is healthcare providers looking to use these technology to actively engage their customers – yes, not patients, customers.

      Until the provider sector of this industry starts taking a more customer-centric mindset, beyond billboards and advertisements on NPR and actively incorporates such systems into the entire workflow of healthcare delivery, we will remain stuck in neutral.

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Chilmark Research is the only industry analyst firm focusing solely on health IT. We combine proven research methodologies with intelligence and insight to provide cogent analyses of the emerging technologies that have the greatest potential to improve healthcare. We do not shy away from making tough calls, and are respected in the industry for our direct and thoughtful commentary.