The Personal Health Record (PHR) market is evolving rapidly undergoing a tectonic shift as the majority of PHR vendors shift their focus from Business to Consumer (B2C) sales & marketing model to Business to Business (B2B) model. This is particularly true for those who offer a hosted, web-based (SaaS) PHR solution.
In a series of interviews we have conducted over the last several weeks with a number of PHR vendors, both large and small, the over-riding trend is a refocusing of their marketing away from the consumer and towards larger enterprises, which can be broken down into three distinct markets: Employers, Health Plans and Providers. PHR vendors are finding that these larger entities can be much more effective in promoting adoption of a PHR among their constituencies and it is far easier to target these organizations than the very broad and not terribly motivated end consumer market.
There are still a significant number of PHR vendors pursuing a B2C model, typically offering a desktop and/or USB solution. These vendors, however, will see ever stronger headwinds as the PHR market moves to the Web as Web-based solutions can provide far greater functionality, are easier to update and will be delivered at ever lowering cost as these solutions scale. Another challenge facing USB solutions is the reluctance of care providers to insert a USB into one of their networked computers for fear of inadvertently downloading a Trojan virus off the USB. Thus, the utility of USB solutions is extremely compromised and consumers will look elsewhere. For these reasons, PHR providers that offer only a desktop and/or USB solution will fade from the market within the next 3-5 years.
Our research on the PHR market will culminate in a comprehensive report that is scheduled for completion by the end of Q1’08. If you wish to receive further information about this report, please contact us directly at: info@chilmarkresearch.com
John,
As usual you’re on target. I’ll offer a couple additional reasons why the B2C PHR market is problematic:
* Very small potential market — only VERY motivated consumers (e.g., those with a crippling disease or those who are exceptionally health conscious) will go to the effort to create and maintain
* Hassle of updating PHR records is a significant barrier, very limited potential to auto-populate consumer model PHR
* No network effects with a B2C model
Vince, thanks for you comments and adding to the discussion. The points you make are valid and add to my argument that B2C sales and marketing models ill not fly in this market.
However, in thinking about this, maybe we are being too limited in our definition of a PHR. If one were to expand this definition and call something like PatientsLikeMe a type o PHR, than there is the possibility of a B2C model working. But as you pointed ou, it takes a VERY motivated consumer to make the B2C model work and that is exactly the demographic that PatientsLikeMe is targeting.
[…] Unlike Microsoft or Dossia, Google is not adopting a Utility model and instead will go directly after the end consumer with its own PHR offering. Thus, they will be treading into minefield that has laid waste to many a PHR before them, specifically, marketing directly to the end consumer to adopt their PHR offering. This is a model that will struggle to succeed. For reasons why, see this previous post. […]