The digital health ​market scam

  • igital health global venture capital broke records again in 2018 with 698 deals raising a total of $9.5bn.
  •  Funding for the digital health sector continues to rise, at a 32% increase year-over-year – a pace that will be difficult to maintain this funding pace going into 2019 unless there is “a clear exit path for investors,”.
  • In the United States, digital health companies raised close to $7 billion in 2018 with the remaining $2.5 billion coming out of other countries.
  • Most doctors say they have not recommended any general health and wellness apps or wearables to their patients. (Source: Kantar)
  • For medical-grade devices, the results are similar, with 70% of doctors saying they have not recommended medical-grade web-connected devices to their patients. (Source: Kantar).

Yesterday I had the chance to watch some qualitative research with doctors around the mhealth market. What really stood out was a doctor holding up his iPhone with “health apps” on the app store saying “and just which one of these should I recommend?” and “which one actually provides accurate information?”.

Another group of physicians overwhelmingly said, “I would never make a diagnosis based on an application on a smartphone or wearable device but I would order more tests”.

Health vs medical apps and devices

According to Kantar “despite the benefits of health-related apps, there are still drawbacks. Many apps require users to input data manually, such as logging meals and exercise; while other apps that passively track measures like steps have had issues with accuracy”.

Kantar continues “the use of wearable technology to manage general health and wellness continues to increase. Currently, 21% of American adults use wearable devices to manage their general wellness.6Revenue in this segment is projected to grow at a rate of 5.1% annually over the next 5 years, resulting in a market volume of the US $3.7 billion by 2023

Can we agree that the mhealth market really consists of wellness apps and devices versus medical apps and devices?

During the research yesterday some physicians complained that patients, who used mhealth devices and apps, were coming into their office saying “I have this…”. One doctor recounted a story of how an app told him he may have lung cancer because of a chronic cough when we was diagnosed with COPD.

The doctors all agreed that patients who wear fitness devices might be in for a shock when they realize that they aren’t moving enough but very few said that they feel these devices could actually change behavior. As one HCP said, “is someone going to start eating salads instead of pizzas because they realize they aren’t getting enough steps?”

What is really disappointing to me is that retailers like Walgreen’s are forming alliances with tech companies like Microsoft while pharma, for the most part, continues to dabble in mhealth. Pharma could really make a difference by testing mhealth in clinical trials but then again that pesky ROI word gets in the way.

So why is the money flowing into mhealth?

1ne: Nobody wants to take a chance of missing the next Facebook.

2wo: The belief that in the future we are all going to use mhealth apps and devices.

3hree: The belief that mhealth is better for patients than going to see a HCP.

How soon do you think it will be before the media pounces on a story of someone who didn’t go to the doctor and became a chronic illness patient because they relied on their mhealth device or app?

Sure insurance companies may experiment with wearables but the potential to invade a patient’s privacy and use that information against the patient is too great. It’s still the wild wild West of mhealth.