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© 2013 Karthik Ethirajan, all rights reserved
Participating in mHealth: Insights & Recommendations for a Wireless Carrier Karthik Ethirajan September 2013
© 2013 Karthik Ethirajan, all rights reserved
Agenda
2
1. Health Industry Trend
2. mHealth Service Categories
3. mHealth Industry Structure
4. Opportunity Landscape
5. Monetization & Investment Areas
6. Evolution of mHealth Space
7. Service Offering Example
8. Competition
9. GTM Challenges
10. Recommendations
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
Broad trends in Health industry favor emergence of new
technologies to help cut healthcare cost and improve
efficiency
Source: McKinsey Recall 14, GSMA
U.S. healthcare spend exceeds $2.5 trillion or 18% of GDP, and growing at 4.9% outpacing both GDP and inflation growth
Longevity and ageing U.S. population (13% aged above 65) spending more than $7000 per capita drive the need for better and alternate care
5-6 chronic conditions account for 70% of healthcare spend funding research and new and innovative technology solutions in treatment and management
Cost savings of $6B is achievable using remote monitoring in Diabetes care by shortening hospital stay, and reducing or avoiding nursing home and ER visits
74% of hospitals faced declining margins in the last 12 months
3
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
U.S. mHealth market is small but growing fast with remote
monitoring holding the largest share among B2B and B2C
service categories
Wellness Diagnosis Treatment
Monitoring Enterprise
• Weight loss
• Child care
• Quitting smoking
• Healthy living
• Reproductive
health
• Phone doctor
• Tele-medicine
• Treatment
compliance
• ePrescriptions
• Pill reminders
• Medical records
management
• RHM (Remote
Health Monitoring)
• Chronic disease
management
• Post acute care
• Assisted living
• EMS trackers
• Claim processing
for field force
• Productivity tools
for medical
professionals
1.1 1.7 2.6
3.9
5.8
2013 2014 2015 2016 2017
U.S. mHealth Market (in $ billions; CAGR 51%)
5%
0%
9%
83%
3%
Wellness Diagnosis Treatment
Monitoring Enterprise
mHealth Service Categories
E W T M D Legend:
4
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
mHealth industry structure is complex. MNOs have distinct
capabilities which will allow them to coalesce many types of
partnership deals.
Healthcare Providers
Medical Domain Experts
Technology Enablers
ICT Payers
Pharmaceuticals
Medical Device OEMs
Regulators (FDA, FCC) & Standards (HIPAA)
Compliance
ISVs / SI
Analytics
MNOs
• LBS
• SMS
• QoS
• SIM
• Apps
• Billing
• Care
• Identity
• Security
• Cloud
Consumers
Employers
Government
Hospitals
Su
pp
ly S
ide
Dem
an
d S
ide
Supply Side Drivers Demand Side Drivers
• Better pricing
• Convenience
• Health awareness
• Better patient outcome
• Tech savvy
• Real-time data/feedback
• Improved efficiency
• Leverage ICT infrastructure
• Stakeholder collaboration
• Increased productivity of
medical professionals
• Early intervention
5
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
Technology partnerships will enable MNO to reach a wider
but fragmented market. Provider partnership can take the
business to the next level.
D
M
T
E Doc Tablets
E Ambulance Tracker
E PaaS (Location,
Micro billing,
Identity, etc.)
B2B B2C
Customer Reach
Pro
duct S
cope
Te
ch
no
log
y
Pa
rtn
ers
hip
Te
ch
no
log
y &
Pro
vid
er
Pa
rtn
ers
hip
Pedometer W
Pill Reminder
Glucometer
M Tracker Bracelet
mSteth
D mECG
W
T
M
D
mHealth Plan Operator
Branded
Solution
Provider
Branded
Solution
• Smaller TAM
• Fragmented
• Easier to partner
• Faster time to market
• Larger TAM
• Need to establish strategic
relationships
• Longer time to market
• Provider branded solutions
are a hidden gem
GTM Step #1
GTM Step #2
6
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
Revenue models vary with service type. Incremental ARPU
potential is $3 - $50 based on adoption and service mix.
Investment needed is moderate.
Revenue Models
• Monthly Subs: Applicable to
• Per Use Fees: Applicable to
• API License: PaaS enablers to
developers and 3rd party companies
• Pure connectivity: OTT model
Investments
• OSS/BSS upgrades to accommodate
new services and billing
• Extend roaming agreements to cover
new M2M connectivity
• Marketing and customer acquisition
costs
Monetization
% Subs Penetration
AR
PU
($
/mo
nth
)
M T E W
D
B2C Tech
Solutions
B2B Tech
Solutions
Tech/Provider
Solutions
ARPU Range: $1 – $30
% Penetration: 17% – 33%
Consolidated ARPU: $0.33 – $5
Provider branded solutions have a
10X* multiplier effect:
Consolidated ARPU: $3.30 – $50
Source: Chetan Sharma Consulting, McKinsey Recall 14, GSMA 7
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
Technology partnerships define today’s products while
provider partnership will be the key to driving adoption and
adding value to mHealth services in the future
Wellness checks/tips
Se
rvic
es
Standalone apps,
medical devices and
messaging En
ab
lers
Remote monitoring,
Telemedicine &
Productivity tools Se
rvic
es
Integrated medical &
communication
devices and services En
ab
lers
mHealth Plan,
Interoperable hosted
medical records Se
rvic
es
Partnership between
MNOs and Healthcare
providers En
ab
lers
VA
LU
E
PAST PRESENT FUTURE
WristClinic myfitnesspal
SMS Tips
Wireless carrier has the opportunity to define this space DoCoMo Wellness
Phone
GlowCaps
8
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
The service offering value chain shows revenue generation
points and shows how participation of a healthcare
practitioner completes the loop
B2C
Billing
B2B
Billing
C
A
R
E
Analytics/
Heuristics
Health
Records SMS Alert
Vitals
Locations
mHealth
App
Video
Conf
mHealth
Productivity Suite
Authentication
Encryption
Cloud
Services
Operator Revenue Points
Primary Care
Provider
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© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
Competitors include other operators, and medical domain
players and digital media companies facilitated by OTT
enabled service offerings
MNOs Medical Devices / Health
Service Specialists Digital Generalists
Traditional operators looking for
new revenue streams in high
growth markets
OEMs, service providers and other
entrenched domain experts have
high stakes in mHealth
Digital media and cloud players
who want to be part of mHealth
value chain will try to enter
AT&T has good traction in
mHeath and runs it as a
separate business unit
Products
HealthyFamily app
AT&T Virtual Care
Diabetes Manager
GlowCaps
mHealth Platform
Partnerships & Innovation
• Developer community
• AT&T Labs (incubator)
E
W
T
M
D
• Working with HIMSS, AHA, APA
CardioNet makes
wearable sensors with
mobile cardiac
outpatient telemetry
M D
iPad app
Threat: Disintermediation of operators from mHealth space by OTT
enabled services
Microsoft runs a pilot
with Cleveland Clinic
E M
Qualcomm Life
focuses on capturing,
transmitting and
storing biometric data
M W
10
© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
Operators face GTM challenges from many fronts such as
consumer, regulators, partners, design and execution
Consumers are not accustomed to buying healthcare related services from
wireless operators
Medical devices need to be intuitive and service plans simple enough for
targeting mHealth customers and driving adoption
Proving efficacy at scale, when pilot programs go commercial drawing
millions of subs
Regulatory uncertainties surrounding healthcare law changes, FDA
requirements for medical devices, and others
Lack of standardization of medical devices for connectivity and protocols for
data transfer
Mitigating privacy, liability and reimbursement concerns inherent in
healthcare industry
Overcoming some of the conservative and defensive thinking mindsets
among insurance carriers to forging strategic alliances
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© 2013 Karthik Ethirajan, all rights reserved © 2013 Karthik Ethirajan, all rights reserved
Success in mHealth starts by aligning internal resources to
execute on the vision and extends when being perceived
as a thought leader in the industry
Product Strategy
Thought Leadership
Execution
• Take the crawl-walk-run approach by partnering with medical device OEMs and technology enablers to establish a wider market presence
• Differentiate from the pack by forging a strategic alliance with a healthcare provider and offering provided-branded services
• Develop working relationship with Healthcare organizations such as HIMSS, AHA, APA, Continua and others
• Take lead roles in the regulatory and standardization efforts surrounding mHealth initiatives
• Create an incubation program to attract talent and participate in the forefront of innovation happening in the industry
• Create a separate business unit to foster the growth of mHealth business
• An OTT strategy needs to be developed to reach non-subs and subs trapped in service holes
• Foster a community of application developers
• Embrace social media and an online community to discuss mHealth topics for patients and practitioners alike
• Leverage ICAM certification and federate identity with NIH and other federal health websites
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