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Report from Wharton Conference: mHealth Business Models Must Follow Clinician Work Flow

February 16, 2013
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Panelists also predict massive provider consolidation ahead

While mobile health has seen an explosion of innovation in the last few years, with apps that are growing increasingly sophisticated, it is still difficult to find a successful business model in the space, according to a panel of experts speaking at the 19th Annual Wharton Health Care Business Conference in Philadelphia.

Every year, the students at the University of Pennsylvania’s Wharton School put on a conference that brings together industry professionals, academics, and students to discuss how entrepreneurs are approaching emerging trends such as chronic disease and cost containment. Inevitably, the solutions discussed touch on the role of health IT, either directly or indirectly. This year’s conference, held Feb. 14-15, was no exception. There were some great sessions dealing with mobile health, the impact of health reform and diabetes and obesity.

Steve Van Kulken, a director at McKinsey & Co., led off thesession on mobile health by noting that it is a relatively nascent market made up of remote monitoring, diagnostic and health system enablement. “There’s been a lot of hype for a long time, but the business models are still evolving. Mobile health apps are getting more sophisticated at things like matching remote monitored data with EMR data and government population health data. “But it has been difficult to find sustainable business models in this space,” he noted. “It is not an easy place to succeed.”

Brad Weinberg, M.D., a founding partner of Blueprint Health, a health care-focused accelerator and educational community, said entrepreneurs should focus on mobile as just one aspect of work flow. “You need to optimize around work flow to solve problems,” he said. A challenge in healthcare is that doctors aren’t yet paid for taking advantage of mobile solutions. “They are paid for either having a visit with a patient or putting them in a hospital bed. We are starting to see those models change,” he added. Companies can deliver mobile solutions in a patient’s home that hospitals are willing to pay for because they are worried about readmissions.

“Don’t think you are going to put an app in the app store, and everyone is going to download and integrate into their systems,” said Ben Chodor, CEO of Happtique, a mobile health application store and app management solution.“That is not going to happen. It takes a lot more work.”

Chodor noted that hospital execs he has interviewed recently have shown interest in bundling up all the information a patient would need when leaving the hospital into a mobile app. Even if they had only 5 percent uptake, that might be 5 percent of those patients who aren’t readmitted in 30 days, which could have a huge financial impact. Chodor added that one thing the mobile app market could use is a certification program with clinicians to vet them and make sure the content has value. ‘It’s sort of the Wild West out there right now,” he said.

Health Care Policy

In a session on the impact of the Affordable Care Act, several speakers mentioned that the act is one factor driving increasing consolidation and convergence in health care. (See our Tech Trend story on this topic.)

Mitch Higashi, chief economist for GE Healthcare, predicted that the current landscape of 600 large integrated providers is going to rapidly shrink down to 100 in a massive consolidation. The pace of change is going to be “fast and furious,” he said, driven in part by the adoption of the ACO model. C-suite execs have to deal with a hybrid world now, he explained. “They have to figure out how to keep patients out of the hospital and keep the lights on inside the hospital,” he added. “Everyone is still in a fee for service world and also in some stage of navigating out of it.”

Higashi also noted that the industry is just starting to understand what “big data” means. “Big data is like fuel,” he said. “We have to move from big data to smart data, with things like provider metrics and how to make them transparent.”

While not downplaying the size of the challenges, Emad Rizk, M.D., president of McKesson Health Solutions, said he is encouraged by the amount of collaboration he has seen in the last few years on interoperability. “I never thought I would see this industry move this quickly,” he said. “We have been called glacial or dinosaurs, but I have never seen this level of collaboration in 20 years. Companies have realized if you go it alone, you are going to lose.”

Rizk also said that beyond the consolidation that is occurring, there is also increasing convergence and partnership between payers and providers as business models are changing and they are trying to learn from each other. That may be a good thing, he added.

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