LIVE FROM GSMA-mHA MOBILE HEALTH SUMMIT: The complex economics of the mobile health ecosystem were highlighted yesterday afternoon, with Jonathan Anscombe, Partner at AT Kearney, warning that across the ecosystem: “all of these companies see mobile as a very important part of their business, but it’s safe to say that very few have worked out what that means in practice.” Underpinning this are a number of critical issues: where can mobile add value, how does it fit with an existing business model, who to partner with, and “above all, what is the commercial model.”
Alongside the complexity of the ecosystem, the number of products available also means that there will not be a “one-size fits all” business model. “As there isn’t a single killer app, there are lots of different apps each of which have a different rationale,” Anscombe said. It was noted that in the developed world, “the vast majority of healthcare spending is from state systems and assurance providers,” which means “grappling with the reimbursement system” – “and I have to say the poor clinical evidence for the use of mobile healthcare does not help in that discussion.” In emerging markets, NGOs and consumers play a bigger role, but the industry is fragmented, meaning it is “far from clear” which commercial models to adopt.
Brooke Partridge, CEO & founder of Vital Wave Consulting, agreed with the argument that the mobile health market is likely to see a wide range of revenue schemes. “The business model has been one of the areas that has received the least attention from m-health sponsors,” she said. “It’s often the nature of the application that can guide who pays the bill.”
Jonathan Broomberg, CEO of insurance company Discovery Health, was clear about his perception of the value chain: “To be honest we have a fairly simple view of it. We believe looking at the world as a health insurer, these various platforms and applications provide us with a number of opportunities to improve the way that we do business, which means improving the service to our customers, improving our operational efficiencies, improving the clinical outcomes enjoyed by our clients in their engagements with their doctors. Our base case is that we should be willing and able to foot quite a significant proportion of the bill here, both in the development of these applications and also in partnering with the networks to ensure very cost effective and I think ultimately fairly well subsidised packages of both airtime and technologies to the users.”
Broomberg also said that the company is not currently looking to mobile health technology to drive new sales. “We certainly don’t look at mHealth as a revenue opportunity. For us, this is a whole new world of improved efficiency, customer care, and customer service. I guess what goes along with that on our side is a willingness to invest rather than to earn revenue from this new set of technologies,” he said.
However, Andrea Battisti, Senior Project Manager with Telecom Italia, warned that the role of the mobile operator in the ecosystem is precarious, unless operators are able to increase their engagement further up the value chain. By acting only as a connectivity partner, the value of the operator is limited to that of an easily-replaced component. In contrast, the only irreplaceable part of the proposition is the actual application – “owning the application is a guarantee of real and permanent presence in the value chain,” he said.
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