The Economic Lessons of mHealth

Posted on March 22, 2013 I Written By

Dr. Michael J. Koriwchak received his medical degree from Duke University School of Medicine in 1988. He completed both his Internship in General Surgery and Residency in Otolaryngology-Head and Neck Surgery at Vanderbilt University Medical Center. Dr. Koriwchak continued at Vanderbilt for a fellowship in Laryngology and Care of the Professional Voice. He is board certified by the American Board of Otolaryngology-Head and Neck Surgery. After training Dr. Koriwchak moved to Atlanta in 1995 to become one of the original physicians in Ear, Nose and Throat of Georgia. He has built a thriving practice in Laryngology, Care of the Professional Voice, Thyroid/Parathyroid Surgery, Endoscopic Sinus Surgery and General Otolaryngology. A singer himself, many of his patients are people who depend on their voice for their careers, including some well-known entertainers. Dr. Koriwchak has also performed thousands of thyroid, parathyroid and head and neck cancer operations. Dr. Koriwchak has been working with information technology since 1977. While an undergraduate at Bucknell University he taught a computer-programming course. In medical school he wrote his own software for his laboratory research. In the 1990’s he adapted generic forms software to create one the first electronic prescription applications. Soon afterward he wrote his own chart note templates using visual BASIC script. In 2003 he became the physician champion for ENT of Georgia’s EMR implementation project. This included not only design and implementation strategy but also writing code. In 2008 the EMR implementation earned the e-Technology award from the Medical Association of Georgia. With 7 years EMR experience, 18 years in private medical practice and over 35 years of IT experience, Dr. Koriwchak seeks opportunities to merge the information technology and medical communities, bringing information technology to health care.

I wrote this article for mHIMSS which was posted yesterday.  The original post is available here:


The recent HIMSS 2013 meeting witnessed the emergence of mHealth as a significant component of health information technology (HIT).  The meeting offered 35 educational sessions on mHealth. One of the meeting’s keynote speakers, Dr. Eric Topol, predicted a revolution in health care based on smartphones.  Connecting a smartphone to a currently available bio-sensor allows anyone to monitor and share with a physician his vital signs, heart rhythm, sleep patterns or blood sugar, and soon other physiologic data as well.  Eventually these systems will include software that will enable laypersons to interpret data and determine when physician involvement may be appropriate.  The way each of us will learn to interpret our own body’s data will become a natural extension of the way we now interpret our own “internal body cues” and symptoms.

Meanwhile, progress within the more established parts of HIT has ground to a standstill. At the HIMSS meeting results of a provider survey conducted by the American College of Physicians and AmericanEHR Partners were presented.  Among over 4000 surveys the percentage of clinicians that were “very dissatisfied” with their EMRs has increased by 10% from 2010 to 2012. 39% of EHR users would not recommend their EHR to a colleague (up from 24%).  Satisfaction with EMRs has clearly deteriorated since the 2008 pre-Meaningful-Use study published in NEJM that showed 93% of physicians were satisfied with their EMR.  In the physician blogosphere the leading EMR story last week was about a physician class-action lawsuit against an EMR vendor who allegedly sold defective software and then abandoned the product.  Outside of mHealth there is not a lot to cheer about in HIT right now.

Why is mHealth growing so fast while the rest of HIT is stalling? There are many reasons but three important reasons bear discussion.

First, most mHealth projects don’t take on every patient at once.  An mHealth project designed, for example, to monitor congestive heart failure patients at home addresses only that population of patients and providers associated with a single diagnosis. A project with such a narrow, focused scope has a greater chance of success than a typical EMR project which must cover every patient and every physician regardless of diagnosis.

The other two reasons illustrate an important economic lesson. At the moment mHealth is a relatively unregulated industry. Any startup company can acquire a bio-sensor and/or write a mobile app for a smartphone and be off and running.  There are no Meaningful-Use-type regulations that require all mHealth apps to operate a certain way or meet a minimum set of requirements.  Barriers to entry are relatively low.

Third, many mHealth projects are marketed directly to consumers and are paid for directly by consumers.  The just-released Samsung Galaxy S4 smartphone has a suite of built-in mHealth apps and available biosensors to monitor sleep, calories burned, heart rate and (Samsung implies) blood glucose.  Consumers will purchase this phone like any other – with their own money.  There are no third party payers involved.  That means no insurance approval, no complex coding and billing, no politics ….so far less overhead and far more flexibility and speed.  All you have to do is build a quality, useful product.

mHealth currently operates in a free market where products can be designed any way their creators choose. Their target customers choose what products to buy – or not to buy at all – and how much to pay.  Many of these products will fail, but the ones that succeed may indeed revolutionize healthcare as Dr. Topol predicts.

EMR vendors, burdened by Meaningful Use requirements, have little bandwidth left to address customers’ real needs.  As Meaningful Use requirements and EMR certification raise the barrier to entry into the market, the market is increasingly dominated by the largest vendors at the expense of the smaller ones.  As competition is suppressed product quality and customer service both suffer. Given the AmericanEHR survey results it is no surprise that EMR vendors are now marketing to current EMR users who are unhappy with their present system. There are certainly plenty of those.

Unfortunately the freedom mHealth enjoys may soon come to an end.  The FDA’s upcoming release of its final regulations of mobile medical applications is expected soon.  These rules will likely impose an approval process similar to those already in place for drugs and conventional medical devices.  One source estimates the cost of this approval process for a single mHealth product will be as high as $24 million.  While that estimate seems high, there is no doubt that the cost of compliance will have a detrimental effect on the mHealth marketplace.  Costs will go up dramatically, smaller companies will be forced out, and true innovation will slow as mHealth companies expend most of their resources on compliance.  Those products that survive to reach FDA approval will no doubt seek third party payor reimbursement.  With that will come loss of price transparency, driving up costs even further.  The mHealth market will become as bloated and ineffective as the rest of the health care system.

Will the mHealth revolution survive?  Time will tell.