mHealth apps and wearables have generated a lot of buzz, but is the sector worth the hype?

Marie Thibault

May 22, 2015

2 Min Read
Is Mobile Health in a Bubble?

mHealth apps and wearables have generated a lot of buzz, but is the sector worth the hype?

Marie Thibault

Digital health apps, wearables, and Apple’s iWatch have all contributed to interest in the idea of a future replete with mobile health solutions. mHealth is already being used to make healthcare more convenient for patients and to supplement clinical trials.

The potential of the technology seems to have no limits, if proponents are to be believed. But what about the business potential of mHealth? Is the techy side of health a good investment and will it make money?

This week, one healthcare investing expert acknowledged that while there may be reason to be skeptical, he doesn't yet see a bubble. "We see about five or six mobile health companies seeking investments a week. As you can imagine, we don't do very many of them. I think that the current environment is reminiscent of a bubble. I don't think we're in a bubble yet, but I have seen a number of companies actually get funded at valuations that don't seem . . . to be viable," says Les Funtleyder, MPH, portfolio manager at E Squared Asset Management. He made his comments during the New York Health Forum "Future Is Now: The Era of Mobile Health," on May 21. Despite this, Funtleyder says, he does think there is value in the mHealth sector. 

Funtleyder also explained the three main types of business models he has seen among mHealth companies. The first involves a device with an individual or monthly fee, often with a consumer focus. The second business strategy follows a prescription model, where a doctor prescribes use of the mobile health device or application and the reimbursement follows, much like drug reimbursement. He noted that this prescription model is unusual and has only been used a few times, but has potential to become more common in the future. The final business model involves a reliance on shared savings for the customer, with revenue derived as a percent of that shared savings. 

Will the excitement around mHealth die down anytime soon? Not likely. Funtleyder pointed out that as some mHealth companies go public—potentially in the next 3–6 months—"I do think that is going to focus additional attention on the sector."

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Marie Thibault is the associate editor at MD+DI. Reach her at [email protected] and on Twitter @medtechmarie


About the Author(s)

Marie Thibault

Marie Thibault is the managing editor for Medical Device and Diagnostic Industry and Qmed. Reach her at [email protected] and on Twitter @MedTechMarie.

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