The Uncertain Price of mHealth
Tuesday, June 22, 2010
| Rob Havasy
About the Author: Rob Havasy (@rob_havasy) is a Business Analyst and mHealth Strategist at the Center for Connected Health.
Recent announcements about smartphone data plan pricing by AT&T and Verizon have the Internet and the mHealth world buzzing. Both companies have announced a move away from flat-rate, unlimited data plans in favor of tiered data plans where users are charged for amounts of data used above a certain limit. (See Verizon and AT&T info.) This will surely impact smartphone use in mHealth.
AT&T claims that 98% of iPhone users [based on current - not predicted - usage patterns] will consume less than the 2 GB cap in their larger data plan before incurring additional charges. I’m sure this is true, but my concern is that this pricing structure throws uncertainty into the equation and will cause patients to reconsider embracing mHealth solutions and providers and payers to hesitate paying for them.
To be clear – I have no quarrel with the price that AT&T sets for data or with their desire to make money from those users who consume the most bandwidth on their networks. However, I can say this: until patients can be reassured that adopting an mHealth intervention will not incur additional, unexpected costs, they will be reluctant.
Recently, we offered a simple text messaging program to a population of young patients. 20% refused to even consider the program at the initial offer because they weren’t sure if their wireless plan allowed unlimited messaging or knew that it did not. Even with penalties of only 25 cents per additional message, 1/5 of patients refused, because they weren’t sure if our program’s messages would be the ones to push them over their monthly limits and into additional charges. What happens when the charge is $15 or more for additional data blocks?
I’ve spoken with colleagues and with other people in the mHealth field, and we all agree on one thing: unless we can tell a patient that our program is absolutely free to them, adoption is an uphill battle. Do we need more proof of this than the recently launched Text4Baby program? One of the central features of the program is that, in conjunction with the CTIA (the Wireless Industry Association) and the major American cellular carriers, messages are delivered free of charge to the user. This was considered a requirement for the program’s success – why should we think differently for other mHealth interventions?
What the mHealth community needs from the wireless industry is more cost certainty, not less. Payers need to understand how much something will cost before they will subsidize it. Entrepreneurs and developers need to predict user costs before deciding to invest in new technologies or apps. Patients need to clearly understand how much they need to pay out of their pockets before they embrace new solutions. All of which is no longer possible, at least for AT&T users and soon for Verizon users as well.
If the carriers are listening, please, give us fixed cost plans. Make it simpler – not harder – to figure costs and I’m sure you’ll be rewarded.
The inevitable result of these pricing changes will be a shift away from the smartphone (and consumer data plans) as an mHealth platform and a shift towards more dedicated devices with embedded connectivity (think Amazon’s Kindle). Negotiated data rates and plans by device manufacturers can provide the cost certainty the market needs. Unfortunately, this will come at the cost of the rapid and innovative development made possible by smartphone platforms. The Center for Connected Health continues to investigate both dedicated and smartphone platforms for mHealth solutions, but the predictable costs associated with dedicated devices are very attractive for near-term deployments.
mHealth will surely continue to be a growing part of healthcare delivery – and regulatory and market pressures will ensure that these pricing models aren’t permanent. But for now, they are causing the industry to re-think cost projections and re-evaluate non-smartphone options.