The doctor will call you now
Global healthcare costs are rising, and technology is often touted as the solution. It’s hard to argue technology isn't a game-changer in health: compared to just a few decades ago, consumers can access unprecedented information about their own health, including home tests to map our genomic profile and disease susceptibility.
Yet many front-line services in developed countries remain firmly focused on in-person appointments and limited online interactivity. In a poll across 10 developed countries, only 10%[i] of healthy respondents have accessed medical records electronically. Healthcare innovators in the UK complain of being stuck in regulatory procedures, or find it hard to integrate their product within a complex national healthcare system.
This picture is different in emerging markets. In rural communities, a lack of existing infrastructure can lead to new ways of operating. These include non-technology solutions such as right-skilling ‘barefoot’ community members to treat basic health conditions, as well as mobile-enabled solutions such as calls and texts to doctors in nearby towns and cities. Emerging markets present a unique opportunity to launch high-impact, high-usage mobile health products for three reasons:
1. Higher unmet needs
2. Higher risk tolerance
3. Higher willingness to pay
Higher unmet needs
In remote areas of some emerging markets, access to health services can be limited by geography or workforce availability. However, rising mobile phone penetration has created opportunities for these communities to access a range of services previously excluded to them, through innovative use of technology. This can be described as technology leapfrogging, the process by which some developing countries can jump over several stages to move rapidly from standard-modern to highly-modern technologies. A popular example is the M-pesa mobile banking platform in Kenya.
As my best (Kenyan) friend puts it:
“When it comes to Kenya on the world stage, there are two things I’m really proud of: our athletes and M-pesa”
M-pesa was born when researchers noticed Kenyans with poor access to financial services were transferring money via airtime. It was set up in 2007 and just 6 years later, 43% of Kenya’s GDP flowed through the platform[ii], transforming the way money was handled in the country. Compare this to the USA where only one third of Americans use mobile banking. Tellingly, 86% of those who chose not to use mobile banking made their decision because their needs were already met without it[iii].
There are signs mHealth could follow a similar model; in fact it could ride on the success of mobile banking in emerging markets. Early adopters of mobile banking may have fewer concerns around the quality and security of conducting key activities over the phone. Additionally, they could be more willing to pay for these services can via mobile, further reducing friction.
Higher risk tolerance
Within the UK, a medical technology can be treated and regulated as a medical device (very roughly) if it treats, diagnoses or prevents a disease. That calorie counting app might not need to be regulated, but if it claims it’s going to prevent you from getting diabetes, maybe it should. Regulators rightly take the risk profile of health products very seriously. However, as the diagram below shows, there is often a lower regulatory burden in emerging markets, creating the opportunity to provide higher value-add services to patients (think diagnosis and treatment vs. fitness and wellbeing). Whilst this certainly does not mean safety and standards should be sacrificed, it does highlight a more flexible environment for innovation and experimentation, resulting in more relevant and useful products for end-users.
Developed vs. developing world regulatory risk tolerance:
Source: GSMA
Higher willingness to pay
Mobile users, especially those with the characteristics we have so far described (high risk tolerance, high mobile penetration, low access to health services) may be willing to pay for mHealth services. In a GSMA study on the feasibility of mHealth in Tanzania, there was a relatively strong willingness to pay[iv]. In contrast, making the numbers work for a health app business is difficult in the developed world. One theory is that consumers’ access to free mobile apps makes them less likely to want to pay for any: in 2013, 90% of products on the Apple app store were free. Studies show that when consumers are offered a free product, this trumps other factors including quality. For example, Dan Ariely talks about subjecting his students to a Hershey’s Kiss test[v]:
“In one trial of one study, we offered students a Lindt truffle for 26 cents and a Hershey’s Kiss for 1 cent and observed the buying behaviour: 40% went with the truffle and 40% with the Kiss. When we dropped the price of both chocolates by just 1 cent, we observed that suddenly 90% of participants opted for the free Kiss, even though the relative price between the two was the same. We concluded that FREE! Is indeed a very powerful force.”
One way around the tyranny of ‘free’ is to try to get national governments to pay for your mHealth products, so that individuals do not have to bear the cost burden. Yet emerging markets still land on top, being more willing to pay for mHealth solutions. Reluctance on the part of developed countries may be to do with difficulties around interoperability with existing systems, privacy concerns and a lack of a digital infrastructure.
Conclusions
mHealth offers opportunities to patients around the world, but if you’re watching for the truly high-impact and innovative use cases, you might just be surprised by where, and who, they come from. Watch this space.
Many thanks to Patrick Newton for suggesting the Dan Ariely analogy
[i] https://www.accenture.com/t20150527T210508__w__/gb-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Local/en-
[ii] http://www.forbes.com/sites/danielrunde/2015/08/12/m-pesa-and-the-rise-of-the-global-mobile-money-market/#19aecd7823f5
[iii] http://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201503.pdf
[iv] http://tanzania.gsmamhealthfeasibility.com/GSMA_mHealth_Country_Feasibility_Report_Tanzania_2015.pdf
[v] http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment
