Despite opportunity, wireless hesitates on mobile health

Wireless carriers recognize that mobile healthcare will be a major opportunity for them in the years ahead. But right now, because of continuing questions over suitable mHealth business models, they have not yet made significant efforts to place their stamp on the industry.   

Wireless carriers point to several major issues that are holding them back, especially unclear medical reimbursement rates for mHealth services and devices. Others, however, contend that if carriers rely on third parties to create, test and establish business models that work, they will miss the boat on an emerging opportunity.

ABI chart on mobile healthAnd, according to one recent study, it's quite a large opportunity. A study released in March by the Cambridge Strategic Management Group found the U.S. mHealth market (in which the CSMG included fixed telemedicine) totaled $1.5 billion in revenue in 2009; the study predicted the market could top $4.5 billion in 2014.

"The carriers are asking, ‘Are we going to support data connectivity or are we going to sell and provide a health service?'" said Don Jones, Qualcomm's (NSYE:QCOM) vice president of business development for health and life sciences. "That's not ironed out."

A variety of approaches

There are several business models that carriers are working on for mHealth solutions, all in varying stages of development. "Technology, ironically enough, is not the big challenge," said Azita Arvani, the founder of the Arvani Group, a wireless consultancy.

One of the biggest areas where carriers have made inroads so far is in bringing mobile applications to the healthcare workforce. Carriers have allowed clinicians and physicians to have access, via netbooks and other mobile devices, to electronic medical records and images of X-Rays and CT scans.

Chris Gray, Sprint Nextel's (NYSE:S) industry solutions manager for healthcare, said the momentum in the mHealth market is in enterprise mobility and working directly with hospitals to upgrade their wireless infrastructure. "That's one of the biggest opportunities right now," he said.

Beyond mere coverage, carriers are also working on specific mHealth applications. For example, carriers can offer services to monitor glucose levels in a patient suffering from diabetes and wirelessly report the data in status updates.

Qualcomm's Jones offered another example: The company recently partnered with Hughes Telematics and American Medical Alert to deliver a mobile Personal Emergency Response Service. The solution consists of a wearable, lightweight device equipped with a cellular modem and a GPS chip that has one-touch access to an emergency assistance call center. Jones said the service will launch next year and has U.S. carrier support, though he declined to name the carrier.

John Maschenic, director of healthcare enterprise solutions for Verizon Wireless (NYSE:VZ), said telemedicine and remote patient monitoring is "still in the early stages," but noted the space does have potential.

He pointed to another area that could develop more quickly: giving physicians the ability to capture data on patients after they leave hospitals. "What you'll start to see is a more home health or telemedicine portion of this," he said.

A Fierce 15 this year, Vitality’s GlowCaps pill bottle cap is outfitted with a wireless chipset allowing the cap to connect to AT&T Mobility's network and send messages alerting patients to take their medication.Wireless networks will be used to send data back to doctors--via sensors on pill bottles or on the patients themselves--showing doctors whether patients with chronic diseases such as diabetes and heart conditions are taking medication and following care regimens. This will then allow doctors to make better prognoses and diagnoses, and could cut down on return trips to the hospital, Maschenic said.

Still, progress is slow. "I think that carriers look at healthcare as a lucrative M2M market," Arvani said. "They're thinking that if it's a wellness-type application that goes directly to consumers, they may want to get involved in it. If it's a medical application, they want to stay behind the scenes."    

Concerns abound

John Horn, T-Mobile USA's director of machine-to-machine salesOne of the biggest stumbling blocks to widespread adoption of telemedicine and remote patient monitoring, the carriers said, is reimbursement rates. "Who is going to pay?" asked John Horn, T-Mobile USA's director of machine-to-machine sales. "Is it the patient? The insurance company? Some other third party? That's part of the model that's evolving, and no one's really cracked the code yet."

Verizon's Maschenic noted that reimbursement rates are largely dictated by the Centers for Medicare & Medicaid Services as well as state health commissions. "Reimbursements and the way reimbursements are paid out will change how the technology is adopted," he said. "We recognize that. We really don't influence that. We're kind of waiting for the guidelines to be created."

Another major issue for the carriers is liability. "No one wants to be monitoring whether someone's heart pump is working," Horn said.

The model for carriers, Maschenic said, is not to be a 24-7 lifeline, but to capture and provide data "so that a physician can make a decision for an outcome of care."

Don Casey, CEO of the West Wireless Health Institute, Don Casey, CEO of the West Wireless Health Institute, a nonprofit focused on lowering healthcare costs through wireless, agreed that liability remains a major issue for carriers.

"Until there's clarity, the carriers are rightfully nervous about being the deepest-pocketed people in that network," he said.

However, he said there may well be firms willing to step in and address the reimbursement issue. Both Casey and Qualcomm's Jones noted that self-insured employers and integrated healthcare delivery networks such as Kaiser and Intermountain could be excellent partners for carriers.

Nonetheless, Jones acknowledged that "the carriers themselves don't want to be in the position of marketing medical devices and medical reimbursement streams," he said.

A wait and see attitude

Sprint's Gray said mHealth is a big, but still hard to define, opportunity. "It's more about how do I place my bet than if I'm going to be involved," he said.

Jones said carriers are uncertain just how extensive the market really is. "Carriers have a hard time seeing, ‘Is this a solution with 100,000 users or a 1 million users or a different number, and why?'"

Casey said that, despite the continuing questions, carriers need to understand that this year--with the passage of healthcare reform--is a turning point. Millions of new patients will flood the healthcare system, he said, which could center attention on the cost-savings wireless could bring.

Carriers "are taking a wait-and-see attitude," he said. "Without being critical, you would say that people have to take advantage of ambiguity and recognize that inflection points are usually not advertised."

"I think we're still premature," T-Mobile's Horn said. "Other segments of the M2M world are exploding. Telemedicine is not. It will. I believe it will be one of the largest if not the largest segments in connected devices, but it's still a bit behind the curve."

Despite opportunity, wireless hesitates on mobile health