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The mHealth hockey stick requires health reform

In a world where doctors are paid only when patients visit, and hospitals only make money from admissions, mHealth is a problem. In a world of per-patient fees, where there are incentives to keep patients compliant, it's easy to build a business model around mobile health.
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Written by Dana Blankenhorn, Inactive on

The mHealth field wanted a hockey stick -- a prediction of rapid growth -- for its San Diego conference, and PriceWaterhouseCoopers gave them a hockey stick.

But analysts are arguing about the size, shape and even existence of that hockey stick, given that the 40% of consumers who say they would buy the service don't want to pay more than $5/month for it, and won't pay more than $50 out-of-pocket for the gear.

If these reporters had bothered to read the report their answer would be clearer:

  • Mobile health devices let physicians make better use of their time.
  • Insurers and employers save money if patients see a doctor earlier.
  • Health reform provides incentives for insurers to capture savings from wellness.

See the business model?

According to the report, early research shows the cost per-patient of caring for diabetics drops 42% with remote monitoring, that office visits and hospitalizations for heart patients drop with monitoring, and that lung disease patients cut hospitalizations in half with the technology.

In a world where doctors are paid only when patients visit, and hospitals only make money from admissions, mHealth is a problem. In a world of per-patient fees, where there are incentives to keep patients compliant, it's easy to build a business model around mobile health.

Mobile health, in other words, needs capitation. It needs the medical home. It needs health reform. It needs an HMO. It needs the new medical business models that researchers have been screaming for, and that the government finally delivered this year.

Network World's BuzzBlog is skeptical a market really exists:

Most people remain unwilling to pay anything for this kind of service, and those who say they are willing to pay actually mean they're fine with paying as long as it's covered by their insurance company.

Which means they aren't really willing to pay.

I suppose if you put it that way.

But here's the deal. I'm a heart patient. My genetic cholesterol count and family history say I should have dropped dead a decade ago, or be on some very expensive, ongoing treatment regimen, paid for with Mr. BuzzBlog's tax dollars.

But if I take my pills, if I lose the weight, if I'm compliant with doctor's orders, I can stay out of the emergency room for another 10-20 years.

Now, I don't like emergency rooms. The hope of living well another 20 years is plenty of incentive for me. But it's not enough for most people. Hypertension is called the silent killer for a reason, and if everyone around you looks like the passengers in Wall-E you won't even notice morbid obesity.

What mHealth does, at its heart, is provide that incentive. It delivers a continuing reminder that trouble is coming, and it cuts the cost of care once the chronic condition is acknowledged. And chronic conditions like diabetes, heart disease and the like represent a full third of our $2.5 billion health care market.

What's the cost of providing that service? Less than you're paying now. But someone needs to capture those savings in order to pay for the gear and the service.

So here's the deal. Whoever pays gets the savings. Which means insurers will be jumping on this like Republicans on a tax cut, and government programs like Medicare and Medicaid should be pushing it, too. Once hospital networks are paid per-patient instead of per-visit, they will also sell it.

There's always money to be made in saving.

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