New report on the state of U.S. mobile health market

Mar 19 2010

CSMG, the strategy division of TMNG Global (Nasdaq:TMNG), a leading provider of professional services, products and services to the converging communications, media and entertainment industries, today released its report on the state of the U.S. mobile health (mHealth) market, entitled: mHealth: Taking the Pulse. According to CSMG, while the mHealth market presents significant growth opportunities, when taking into account device, software, connectivity and overall service revenue streams, the market and ecosystem are fragmented, creating challenges for any single player to address the full breadth of opportunities.

"mHealth is well positioned to address the needs and evolution of the US health care delivery because it provides cost-efficient care delivery and increases access to quality health care," 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 health care options. However, broader reform of the health care industry structure is needed to reach the full potential for integrating mHealth into the U.S. health care delivery system."

The report finds that the mHealth market will reach an estimated $4.6 billion opportunity by 2014, but will be fragmented across many solutions and device types. mHealth is already a significant market ($1.5B in estimated 2009 revenue including fixed telemedicine solutions), and is expected to grow over the next five years at a 25 percent CAGR (compound annual growth rate).  If certain broad health care reforms are instituted, such as pay-for-performance, adoption could accelerate.  

CSMG outlines seven key mHealth technology opportunities that comprise the market including monitoring, personal emergency response services (PERS), 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 health care costs (already $2.5T in US 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 and 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 health care-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.
• Health care-specific technology developments such as adoption of electronic medical record (EMR) will remove barriers to mHealth adoption
• Broader health care 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 health care players may lack. New collaborations and new business models with traditional health care 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 ecosystem, including wireless service providers, health care 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. The study examines the emerging dynamics of the mHealth industry and its implication for new players.