The mHealth Opportunity
Not surprisingly, the US is the world’s biggest spender on healthcare and most significantly, chronic disease care. While globally, 57% of total healthcare spend ($12 trillion) is on chronic diseases, in the US, they make up 87% of total healthcare spend ($3.9 trillion). This chronic disease spending represents 15% of the US economy and has driven investment and innovation in mobile health (mHealth).
To better understand the opportunity, Luminous analyzed how mHealth innovation, investment, and adoption has evolved. This is what we found:
Overall, mHealth is a $42 billion global market, heavily concentrated on digital wellness (91%), balanced between software (55%) and hardware (45%), focused on monitoring (70%), primarily located in the US and Europe (76%) and expected to grow at 25% CAGR through 2025. 84% of all mHealth investment ($35 billion) is in chronic disease, 75% of which ($26 billion) is in four areas: diabetes, obesity, cardiovascular, and central nervous system diseases.
A deeper analysis of the value propositions within mHealth reveals two contrasting categories:
1. Digital Wellness (DW) apps and wearables which principally focus on fitness, lifestyle management, women’s health, etc. and have limited, unproven therapeutic value (for patients and the general population)
2. Digital Therapeutics (DTx) apps + Remote Patient Monitoring (RPM) devices which are are evidence-based therapeutic interventions driven by high-quality software programs integrated with wearable monitoring devices to prevent, manage, or treat a medical disorder or disease (for patients, providers, and payers)
To date, most of the focus has been on DW. Notably, the big five tech companies (Apple, Amazon, Google, Facebook, Microsoft), due to their ubiquity, have empowered consumers with greater awareness and access to basic, personal health information. However, the value offered by DW has limited therapeutic value, and we are beginning to see a decline in consumer and patient utilization.
DTx + RPM solutions are more difficult to develop because they require regulatory and clinical approval backed up with studies on efficacy and outcomes. However, we believe these technologies are more attractive, as ultimately, they provide measurable value for healthcare stakeholders and investors. Specifically:
1. Patients achieve better outcomes and receive a better care experience
2. Healthcare providers deliver improved care and clinical results from treatment
3. Pharmaceutical companies realize adoption and adherence for their innovations
4. Payers attain lower costs and serve their populations more effectively
5. Investors obtain high ROCE, through monetization of valuable data delivered to multiple entities (patients, payers, providers, academic institutions)
DTx + RPM is heating-up. The promise of higher-value scientific data will attract larger investors across pharmaceutical companies, payers, and the “big five”. Ultimately, this combination of tech-driven therapy and higher-quality data will lead to better outcomes and lowered costs, where it is most needed.
By putting the Spotlight on patients, Luminous can help you build mHealth solutions grounded on value propositions that benefit all stakeholders.