Mobile Health has moved to center stage in the conversation around the future of healthcare. But with the wrong leadership, will these companies be headed toward the DOT-com graveyard?
The role of the CEO for mHealth is like any other market space–to create value for the shareholders and to create sustainability of the business model. But the difference compared to many other businesses is the challenges that have to do with changing market dynamics. The way healthcare is being delivered and consumed is shifting rapidly and can be difficult to navigate for even the most seasoned CEO.
The Role of an mHealth CEO for Institutional Products
For those mHealth products that are targeting the institutional markets, the impact of the Affordable Care Act, changes in reimbursement and consolidations among hospitals can make adoption of new medical device and healthcare products a difficult and sometimes painful experience. Group purchasing organizations (GPOs) and independent delivery networks (IDNs) have increasing influence over how new medical products reach the end user. This trend has dramatically changed the go-to-market strategy for selling to healthcare institutions.
In today’s institutional healthcare market, the vast majority of mobile health products will never make it from supplier to end user without being adopted or approved by the C-suite of IDNs.
Hence, any institutional market strategy must take into account not only the growing influence if IDNs and GPOs, but a means for making the economic case for adoption with them. Lacking this, failure will come quickly and mercilessly.
So, to play the role most effectively, the mHealth CEO cannot lose sight of the fact that all roads lead through both GPOs and IDNs when it comes to successfully penetrating the institutional healthcare market with innovative mHealth products.
Have We Seen This Movie Before?
With the explosion of mHealth products and the fewer barriers to entry, compared to traditional medical device products, a major attraction for investors, VCs and Angels is rapid product deployment into the market, with minimal or no regulatory risk. But for investors selecting an mHealth CEO to lead their company, caution must be exercised to learn from the Dot-com debacle.
There are floods of Apps and “businesses” that have come into the market that are making the same mistake as the their Dot-com forefathers–creating a business that can easily be displaced without a solid and sustainable reason for existence, reasons based on adding value to the healthcare system.
During the DOT-com era, the exuberance to create internet businesses fueled the speculative bubble. Absent a clear business plan, these companies showed no actual earnings and no prospects for a sustainable business. Not surprisingly, they fell off the map as quickly as they appeared on the scene, leaving investors who raised billions holding the bag.
So as to not commit similar transgressions, investors, boards and CEOs of mHealth companies will need to keep focused on what will be valuable in the eyes of the market.
The mHealth Trifecta
The mHealth trifecta of decreasing cost, increasing quality of care and enhancing the patient experience will be the key for many firms planning to raise capital and build a profitable and sustainable business. The CEO of an mHealth company who plans to build a business that serves the institutional healthcare market should be aligned to creating a value around these three areas: decreasing cost, increasing quality of care and enhancing the patient experience. It will be that CEO who can create value in all three areas as the foundation for sustainability that will have a the best chances to win in the expanding mHealth market.
Patient Empowerment and the role of the mHealth CEO
The consumption of healthcare is changing. Patients are becoming more a part of the decision process of the administration of healthcare. The demand for cheaper solutions to improve health and quality of life by taking control over their healthcare is headed in and mHealth is at the center of this trend.
Products that go direct to consumer as an app or hardware software add-on to smart devices are on the rise. With smart phone use worldwide exploding, the means for rapid deployment of new healthcare apps, training and intervention programs will continue to expand.
For the mHealth CEO the opportunity to create a new business models based upon data collection and usage vs. a one-off sale can open the door to entirely new avenues for commercial viability.
Some direct to consumer applications are even going the route of freeware to encourage use to collect valuable data that can be aggregated and sold to hospitals and health insurers.
So, the mindset of the mHealth CEO needs to be that of a visionary, with a talent for creating sustainable value in ways that maximize the possibilities that mHealth products and services can provide.
mHealth CEO Selection
Companies evolve and change as the needs of investors, market conditions and regulations change. What was a good fit for the organization at one point in time may no longer be as the environment changes around the business.