Best mHealth App Monetization Strategies: Why It’s a Great Time to Invest
As we discussed in our latest mHealth blog article, the industry is currently experiencing unprecedented growth. Technology is becoming more and more pervasive in consumers’ everyday lives. Healthcare providers increasingly highlight the benefits of tools that can facilitate preventative care and wellness. And the global need for affordable access to healthcare has never been greater. As a result, today’s opportunities for entrepreneurs and companies looking to make impactful investments in this area are nearly limitless.
The market for mHealth technologies is forecast to experience a compound annual growth rate (CAGR) of 28.8 percent through 2027, making it one of the world’s fastest-growing verticals. And despite the global economic downturn that’s come in the wake of the COVID-19 pandemic, there’s no sign of a slowdown in investment in mobile health services and mHealth app development. In fact, prior to the close of Q3, 2020 already stood as the largest funding year ever for mHealth. In the year’s first three quarters, over $9.4 billion was invested in U.S.-based digital health startups alone.
Why invest in mobile health technology?
Economic forecasts for the final months of 2020 remain gloomy, and the healthcare sector certainly hasn’t been exempted from the major financial challenges that the past year has brought. In many places, hospitals and health systems have struggled to provide high volumes of emergency care to coronavirus patients in the face of staffing shortages. At the same time, they’ve seen routine care appointments and elective procedures cancelled, resulting in a revenue shortfall of $36.6 billion over the first four months of the pandemic just within the United States.
Patient care has been negatively impacted as well. People with chronic conditions ranging from diabetes to cancer are likely to experience higher mortality rates and poorer treatment outcomes over the long term as a result of deferred and canceled treatments. Across nations and ethnic groups, the incidence of behavioral health conditions like anxiety and depression has surged to an all-time high, an effect of the pandemic that has the potential to stress healthcare systems for years to come.
The need for new, cost-effective treatment modalities that can expand access to care without excessively taxing the resources of health systems already facing workforce shortages is urgent. Simply put, the healthcare industry must leverage technological advances that enable care delivery to become “smarter” — more efficient, more user-friendly, and more value-driven- if it is to remain financially viable for the future. Enter mHealth technologies.
Regulators are encouraging investment in the mHealth apps market
Governments and regulatory bodies around the world have recognized the need for change and are encouraging more widespread utilization of mHealth services. In the U.K., for example, the National Health Service (NHS) has embarked upon a multi-year campaign to encourage the use of mobile health applications and telemedicine services, which the NHS estimates could save as many as 500,000 lives per year through earlier detection of disease and improved wellness efforts. The NHS has created its own mHealth mobile app, designed to support digital consultations with care providers and provide patients with online access to their health records. The app is expected to replace more than 30 million in-person visits within the next year. The NHS has recently expanded funding for its NHS Digital program and is actively seeking partners, including technology partners, who can help them make access to digital health more pervasive and incorporate mHealth into the national standard of care.
In the U.S., the Federal Communications Commission (FCC) recently concluded a $200 million program designed to support healthcare providers in expanding access to digital health services. With that program now under review, the FCC has opened the $100 million Connected Care Pilot Program, which will fund broadband connectivity, hardware purchases and software development to enable healthcare providers to offer digital and mHealth services to veterans and rural populations. Initiatives such as these are coupled with a regulatory environment that’s striving to enhance security while actively encouraging mHealth adoption. These efforts reduce the risks to companies and health systems looking to put capital into mobile health app development today, making the current climate even more favorable for investment in these much-needed technologies.
What’s needed for success in mHealth app monetization?
Not every mobile health application development project is successful, though opportunities for high earnings within the category certainly do exist. Even as the market is seeing rapid growth, the mHealth apps generating the greatest ROI are those that were built in accordance with a well-thought-out monetization strategy, are supported with strong marketing campaigns and exceed their users’ expectations for performance, integration and security.
In general, the most successful mHealth apps are those that exhibit:
A strong product-market fit
With 21.5 percent of its population over the age of 65, Germany has the largest number of elderly residents of any country in Europe. As people age, they become more and more likely to require ongoing health monitoring and supportive care. Full-time nursing care is expensive, yet frequently cannot offer the extensive one-on-one interactions that the elderly need for mental stimulation and social engagement in order to stave off physical and cognitive decline.
To solve this wide-ranging problem, German healthcare technology provider Media4Care has developed a line of smart assistive tablets especially for seniors. Although many elderly people are reluctant to use devices they perceive to be unfamiliar or overly complex, the Media4Care tablets include more than 700 applications that were designed in collaboration with gerontologists and professional eldercare providers to be easy for seniors to use. The result: within five years of its introduction into the German market, the tablet is now deployed within more than one-third of senior living facilities in Germany. It also has more than 40,000 individual users worldwide, who continue to generate revenue by paying for monthly subscription-based services.
In this case, Media4Care had a strong business model built around a clear and pressing need in their local market, as well as the resources to invest in designing an application that would provide the user experience and features that their customers needed.
Clear benefits for patients and providers — integrated into the business model
Among the fields that can benefit from mHealth solutions, diabetes therapies and interventions are believed to have the best market potential. Approximately 422 million people worldwide have diabetes, and its prevalence has been increasing steadily in recent decades. Many of these patients are dependent upon expensive insulin treatments for survival, which is especially problematic in low-income countries.
San Francisco-based diabetes care startup Virta Health has set out to change this paradigm. Using a custom-tailored mHealth app, the company’s software records biomarker data (including information about diet, blood sugar levels and medication) for immediate review by a physician care team. The system than provides personalized nutrition recommendations and behavioral advice to patients. Virta participated in clinical trials, which showed that 63 percent of patients were able to eliminate the use of diabetes-specific medications within one year, and 94 percent eliminated or reduced their insulin usage.
To makes this innovative mHealth solution even more attractive, it’s being offered to health insurers and payers with outcome-based pricing: they will pay only for the patients who remain enrolled in the program and improve while using it. This value-based care model is particularly attractive to European national healthcare systems strained by aging populations seeing an increasing incidence of chronic conditions and rising costs, but it’s also favored by policies introduced within the Affordable Care Act and the HITECH Act in the U.S.
User experiences that delight
In recent years, meditation has dramatically grown in popularity as growing amounts of scientific research have demonstrated its physical and emotional health benefits. Studies have shown that meditation reduces stress levels and associated inflammatory responses, decreases anxiety, lengthens the attention span and meditators’ ability to focus on a task, reduces age-related memory loss, and can lower blood pressure. These rich benefits are accessible anywhere, at any time, for no cost.
Of course, dozens of guided meditation and mindfulness apps are now available, with most employing the “free download with in-app purchases” monetization strategy. User spending on the ten highest-earning apps in Apple’s App Store and Google Play grew 52 percent year-over-year from 2018 to 2019 to $195 million. Number one among these top earners is Calm, which grossed an estimated $92 million in 2019.
This app’s success was built upon meticulous attention to detail — both in interface design and development and in customer targeting and marketing. Every facet of user experience (UX) from color gradients to in-app messaging is carefully crafted to soothe, relax and delight users. The app’s feature set is constantly being expanded in response to customer feedback and observation, and the app is supported with the largest paid user acquisition budget in the mobile app space today. All together, these strategies and features create a customer journey that encourages people to download the app, make its use a habit, and share their delight with friends (who are then likely to download the app, too.)
Developing a mobile health app that’s likely to succeed is less a matter of luck and guesswork than a matter of solid business strategy. You’ll want to ensure that you partner with an experienced mHealth developer who understands how to design for ease of use, exceptional performance and rock-solid security.
To learn more about PGS Software’s expertise in this area, check out our dedicated mHealth industry page and read more about our expertise in interface design, hardware integration and data security.
Originally published at https://www.pgs-soft.com.
