mhealth insights for wireless carrier

© 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


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


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


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


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


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


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

9


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


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

11


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

12

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