We’ve seen a rash of announcements from operators such as Telefonica and Vodafone (and telecom suppliers for that matter) on their eHealth offers. So what brought on this sudden interest? Operators have been providing communication services to the Health sector for many years, what’s different?
Firstly, lets start with some definitions, as always without clarity in what’s being discussed things get confused.
eHealth encompasses both IT and telecom’s contribution to Healthcare. Many governments have set aside funding to eHealth for Electronic Health / Patient Records (EHR/EPR), e.g. in the US the ARRA and HITECH Acts set aside $2B in 2010, globally the investment is about $10B of stimulus funding for 2010. EHR/EPR is an IT problem enabling Doctors and Hospitals to exchange records electronically.
mHealth, also known as TeleHealth, is a focus of many developing nations, covers a myriad of mobile / telecom services and wireless technologies designed specifically for use in the provision of healthcare, mHealth is a subset of eHealth. It can include:
- General mobile enterprise services used by health-care workers, such as remote access to e-mail and health-information systems;
- Applications designed to meet a specific need of medical workers, such as mobile prescriptions and remote diagnoses;
- Applications that play a direct role in the provision of care, such as mobile data collection and wireless transmission of health data; and
- Consumer-targeted applications to encourage health and help prevent illness.
About $2.5T will be spent on health-care in the US. In the US alone hospital IT spending will reach $28-29B in 2010, growing to $50B in 2015. While mHealth remains at about $1.5B globally. So there’s a fair gap between the juicy IT part and the mobile part. So you see why I’m keen on focusing upon definitions as the total market size numbers can be quite different.
The the EHR/EPR space its all about IT, typical competences include:
- Security and privacy management;
- Enterprise service bus;
- Governance frameworks;
- Data warehousing and sharing;
- Business intelligence;
- Database / record management; and
- Enterprise IT project management.
Which means the main suppliers of EHR/EPR are Microsoft, HP, IBM, Oracle, Accenture, CGI and the many specialize health-care managed service providers and SIs (System Integrators). Not many telcos are playing here, and those that have, such as BT Global Services, have suffered significant write-downs.
So the focus is really mHealth for operators. Within mHealth the juicy opportunity is remote monitoring. According to the World Health Organization 180 million people have diabetes, and the figure is expected to be more than 360 million in 2030. Currently, 210 million people have chronic respiratory diseases, estimated to hit 273 million in 2015, and 300 million have asthma. 17.5 million people died of cardiovascular diseases, including stroke, a figure that is estimated to rise to 20 million in 2015.
The numbers of people affected by these diseases are expected to rise, due to: obesity, which affects 400 million people, a figure expected to exceed 700 million in 2015; and aging, globally, 650 million people are over 60, a figure estimated to reach 2 billion in 2050. That’s a total addressable market for chronic-illness monitoring is therefore just under 400 million today growing to over 700 million by 2015.
So let’s assume an estimated annual revenue per device of $500 (health-care isn’t cheap), and assuming 20% of chronically ill people are addressable, that’s a total addressable market of $40B today, growing to $70B by 2015. So the current mHealth market is nascent to say the least!
But it requires operators to bring a turn-key solution to the regional health organizations, else be relegated to bit pipe providers by the IT suppliers and health-care focused SIs. There’s been some great thought leadership and experimentation, for example Telefonica and its work on sensor networks and the CAALYX Project. Vodafone is a sponsor of the mHealth Alliance that is focused on promoting m-health in developing markets and aims to bring advocacy efforts and industry expertise together over the next year with the goal of seeing the scalable implementation of m-health in developing markets in the next few years.
However, the problem is a similar situation to consumer services in that operators are not upping their game and focusing on total customer value, that is delivering complete solutions to their customers’ needs. Hence risk missing out on the emerging mHealth opportunity. The emerging market is tough, IT is taking over, which is pushing many telecom CxO teams outside their comfort zone. Note many of the current telecom CxOs rode the wave of market expansion to their current position; so the current highly competitive environment is hard, almost alien, and its only going to get tougher.