By Eric Claude, MPR Product Development
Mobile health-related devices and telehealth services are exploding. VC financing of digital health companies is way up; estimates are that it’s now twice the flow of what’s going into traditional device firms.
Today, creation of mobile health applications is made easier than ever due to the evolution of critical enabling technologies: cloud data services, miniaturization of sensors and electronics, “body-area” networking with protocols like Bluetooth, and ubiquitous wireless and cellular networks to collect all that data.
New health, fitness, and lifestyle applications seem to launch almost daily and the market seems to be validating the value of many of these products. But what about mobile in the medical device space?
At the macro level healthcare industry trends are certainly aligned to leverage the advantages of mobile health applications: aging populations, chronic disease, healthcare costs, and consumer driven demand will create needs. Mobile-enabled solutions hold the promise to meet these needs and transform healthcare into a more efficient, patient-centered and value-based system.
At the next level, the question is how, specifically, can mobile capability add value? There could be any number of reasons:
- Asset tracking – enable providers to know where their devices are to prevent loss, facilitate recovery, and locate patients.
- Remote patient monitoring – save time and cost by reducing unnecessary readmissions and improve outcomes with timely and clinically appropriate intervention.
- Compliance tracking – ensure patients are following treatment protocols and create opportunities for patient education as needed.
- Device monitoring (e.g., alarms, faults) – more rapid response to patient events or improper device use for better outcomes.
- Fee for service – enable new service-based business models, like bundling of healthcare services.
Understanding how a mobile, cloud-connected device can create and monetize value requires analysis of the business drivers for all stakeholders in the healthcare system. Physicians are looking for devices to seamlessly provide data crucial to decision making that leads to better outcomes. Payers seek devices that promote health and wellness and reduce costs through efficiency gains, shorter length of stay, lower readmission rates, improved outcomes, and patient adherence. Healthcare delivery organizations need devices that provide information to increase the quality of their business practices and maintain security of information. Patients want devices that are easy to use and that integrate with their on-line consumer experience.
We’ve found that evaluation of the business case requires a systematic process that makes use of lean innovation thinking with critical feedback from these representative stakeholders:
- First, define the potential business scenarios in which the mobile technology would be used. This includes the context for patient care and the roles for all relevant stakeholders (including the device manufacturer, healthcare delivery organizations, physicians, nurses, and payers). Software developers will understand this step as a “use case analysis.”
- Develop hypotheses for where value could be created in each of these scenarios. Value creation could come from improved patient outcomes, operational efficiency gains in the healthcare delivery value chain, or opportunities for innovation from the collection and analysis of the data.
- For each hypothesis, gather first-hand feedback from representative stakeholders regarding the assumed value creation. Also investigate comparable products/services and existing reimbursement models.
- Use the data and insights gained to refine the business case and repeat.
Sometimes you find surprising and often conflicting results from your stakeholders.
For example, while asset tracking may be valuable to a hospital, patients are going to be concerned about privacy (do I really want my doctor to know everywhere I go?). Some physicians are also feeling threatened by the ACA and may push back on automated collection of data on their patients as a perceived threat to their income (do I really want fewer office visits if that’s my bread and butter?). What’s in it for them? Why should they be motivated to adopt the technology? To work, the business model has to address these kinds of questions.
The bottom line is that while adding mobility to a device can be relatively easy because the enabling technology is readily available, it can be harder to figure out how to generate the value.
For scenarios in which devices are used to treat chronic conditions, like diabetes, atrial fibrillation, and obstructive sleep apnea, finding value in mobility has been proven. Cardiac care is leading the way with examples including St. Jude’s Merlin.net™ and Medtronic’s Carelink® systems. Further innovation in the mobile medical space will come from those who are creative in generating value in less obvious ways. As devices become more commoditized, we may have to reinvent the device industry in terms of services and solutions across the continuum of care to realize the full benefit of the mobile revolution.
About the author:
Eric Claude is the vice president of MPR Product Development, a business focused on the development, design, and engineering of medical devices and health related consumer products. Mr. Claude is recognized as an industry thought leader and is a speaker for industry groups (such as AdvaMed) and universities on product development topics including risk management, human factors engineering, and design control processes. He has authored articles for the medical device and nuclear power industries, and written papers on product development, FDA regulations for medical devices, and other topics. In addition to his industry commitments, he regularly advises clients, partners and investors on strategies for product development and commercialization.