Is a freemium model the way to go for eHealth apps?
The proliferation of medical apps for disease prevention and health promotion has made healthcare ever more accessible. It is further facilitated by the ubiquity of smart phones and demand for better healthcare.
The number of digital health apps available in the market has reached over 300,000 apps on the top app stores worldwide, almost double the number available in 2015. Over 200 apps are added daily.
Sadly, many of these apps aren’t sustainable for more than a year, fail due to a number of reasons, including poorly structured revenue models. A number of the businesses I evaluated during my master’s research relied on fragmented funding from various sources such as donor organisations to support development of their products. When this funding is depleted, other revenue models need to be put in place to ensure sustainability.
Freemium is a popular model in which the basic application is free for users to download and use for as long as they like, though enhanced functionality is available at a price. Eventually, some of these satisfied, non-paying users will want to upgrade to a better version of the app or make in-app purchases, and hence become paying customers.
In order to generate revenue from freemium apps, these three attributes need to be fulfilled;Capture high market share - the market strategy needs to revolve around capturing as much of the market share as possible because only a small percentage will become paying consumers and support the cost of non-paying users.Have a strong competitive advantage - the free offering must fulfil a need for the user in order to create a positive buzz, and the paid version has to create added value for customers to induce them to upgrade.Continued value creation - the freemium product should continue to add value as the user uses it over time in order to encourage non-paying users to switch over, and to maintain a consistent base of paying users. This model works well for innovations that are highly adaptive and iterative. Motivation to become a paying consumer relies on the value that the product adds for the user. As soon as the value diminishes, interest in using the app wanes as well. The challenge for these companies becomes staying ahead of a rapidly evolving and innovative industry.
- 133 views
- May 21, 2019
- Ameera Hamid
Successful eHealth needs capacity building
Africa’s health-care system is undergoing an eHealth revolution. The technology is new, but it must be used by the existing health workforce.
A critical finding in my master’s research, is that eHealth needs better investment in educating and capacitating users of eHealth. Another report by the British National Health Service found that a lack of training for healthcare providers created barriers to eHealth care. In Africa, we face the same challenge.
Technology on its own, no matter how effective, cannot bring about healthcare revolution without acceptance and proper use by healthcare workforce. An implementation strategy which addresses the barriers to effective adoption of these technologies will be critical to their success.
Capacity development has multi-layer benefits;For staff it can increase overall job performance and satisfaction. For the healthcare organization or facility, it can improve effectiveness and profitability.Even at the societal level, training and development can increase the quality of the labour force, which in turn is a contributing factor to national economic growth.
By developing a workforce that is able to confidently use eHealth technologies and services, African countries could implement their national eHealth more successfully and move closer to achieving universal health coverage.
- 118 views
- May 06, 2019
- Ameera Hamid
Why eHealth needs business modelling
A substantial number of businesses and start-ups pursuing opportunities to bridge healthcare challenges with eHealth technologies are often confronted with “pilotitis” or failure to implement their technologies in a sustainable way. In my last article, I described some of the challenges eHealth businesses face.
Constructing a business model during the development of eHealth technologies can guide a value-driven evaluation of what is necessary and what is not, in order to overcome implementation failures. A review of the literature suggests that the business model canvas proposed by Osterwalder is a suitable business modelling tool for the eHealth industry.
The one-page canvas consists of nine building blocks that provides a conceptual framework to describe the business’ activities from four perspectives;Value offering – what need is being fulfilled by the business?Value communication and transfer – who are the customers and how does the business communicate with them?Value co-creation – what are the business inputs, including collaborating partnerships? Value capture – how does the business maintain profitability?
A key observation in my master’s study was that there is a strong focus on the value offering and value capturing activities of the business model, although little focus on value co-creation and value communication and transfer activities.
While eHealth businesses are aware of the importance of these activities, challenges of the environment create barriers to prioritising these activities. To overcome these challenges, transformation is required in both the micro and macro eHealth environment.
- 246 views
- April 24, 2019
- Ameera Hamid
Successful eHealth needs better business models
eHealth is a complex business type, integrating many stakeholders acting across interwoven networks. Yet the characteristics of successful business models remain understudied.
Despite the promise of eHealth to overcome healthcare access challenges, reduce costs and improve quality , successful implementation is low, especially in developing countries. In fact, over 50% of eHealth businesses find it difficult to sustain their implementations sustainably beyond the pilot phase. I have been investigating these dynamics and will be sharing them over the next few weeks in a series of eHNA pieces.
Recurring challenges of eHealth include;Financial institutions unwillingness to fund eHealth start-upsHigh start-up costs and ongoing maintenance costsRegulatory legislation that lags behind technology developmentResistance from end-users to adopt new innovationseHealth technologies lack user experience designPoor scalability of eHealth technologies after their pilot phasePoor ICT infrastructure in the environmentLack of leadership and political supportLack of research.
To overcome these challenges, change is required in both the micro and macro eHealth environment. I’ll be sharing ideas on what changes are needed in my next piece.
- 132 views
- April 08, 2019
- Ameera Hamid
eHealth and a new business model can reduce inpatients’ mortality
It’s more than just ICT. A current research programme in Germany shows how eHealth’s role in precision medicine can reduce hospital patient’s mortality when it’s integrated with investment in a part of a new business model. A report in HealthManagemnet.org on continuing research in Germany says how to optimise and streamline hospital care by separating patients into routine and complex groups improves quality and saves lives, so major benefits.
Separate and concentrate – a sustainable business model for general hospitals describes how a new business model can use new technologies to support precision medicine and improve effective bespoke healthcare. It assigns patients to routine and complex care pathways.
Routine patients are not emergencies and have up to two co-morbidities. Complex patients are emergencies and have three or more co-morbidities. Both groups benefits from better quality. Routine patients’ mortality has dropped by more than 13%; complex patients; by more than 11%. These are attributed to the new business models opportunities to:Optimise the impact and benefits of precision medicineAddress the specific critical care management differences of the two patient groups Minimise the impact of operational factors on healthcare qualityReduce hospitals’ management complexity.
The research’s currently in phase two of three phases. So far, it has disrupted the conventional view that greater patient volumes achieve better mortality results. The new business model emphasises that:Specialisation as a crucial determinant of quality and mortalityBusiness as usual with eHealth may not optimise its opportunities to maximise healthcare quality gains.
It also confirms that eHealth is more than just ICT. The report confirms that redesigning routine and complex patient flows and care pathways has implementation challenges. It also shows that eHealth can offer more benefits when integrated with investment in new business models.
- 294 views
- September 25, 2018
- Tom Jones
Dr Conuslta’s eHealth and technology business model’s transforming Brazil’s healthcare
Extending healthcare access is one of eHealth’s objectives. Using it to improve healthcare efficiency can help, but modestly. Dr Conuslta, a Brazilian start up in 2011, shows that an imaginative and innovative business model that uses eHealth and medical technology to relocate blocks of healthcare and slashes its costs for low-income families may have more impact. It’s a model that can fit Africa’s UHC goals.
An article in Forbes describes the initiative. Dr. Consulta charged patients a flat $30 fee for a consultation with a physician of their choosing from 50 specialties. Some patients pay nothing, depending on their health condition and ability to pay. Prices for on-site exams, such as MRIs, blood tests and mammograms range from $3 to $30.
Typical premiums for Brazil’s health insurance plans for access to one GP can be about $120 a month Off-site exam fees for lab work or specialist visits can be about $200 each, more than six times Dr Consulta’s higher rates. Only about 25% of Brazil’s population can afford this.
These low prices are achieved by a business model that invests in diagnostic technology and services in clinics and using AI to develop its own EMRs. It also engages some healthcare professionals as co-workers who use Dr Consulta’s clinics as a resource, not as employees. These combine to achieve high patient volumes, long-term relationships with patients and low-price out-of-pocket payments that sustain financial viability. The large, stored clinical data volume helps to achieve precise medical outcomes, which in turn, reinforces this long-term relationships with patients
Dr Consulta’s eHealth includes AI to analyse scientific and medical statistics to identify the probability of people contracting chronic health conditions. It can then treat them promptly to minimise or eliminate the risks. It engages patients with updated information and recommendations about their illnesses or conditions.
These bespoke communications are constructed from information in the core health management data warehouse using the Oracle marketing tool Responsys. For each patient, using age, health history and treatment plan, the Responsys automatically recommends:The new health services provide links for patients to schedule services. After each visit, Dr Consulta sends follow-up surveys to solicit feedback on patients’ experiences with their doctors and their results. Cloud applications support its marketing, finance and supply chains complete the eHealth profile. While it’s extensive and modern, its benefits depend on the transformative impact of its business model. Large, established hospitals with eHealth legacies are often less agile in reaching under-served, low-income patients. Dr Consulta’s a healthcare model that Africa’s health system could consider as part of their UHC pursuits.
- 348 views
- September 06, 2018
- Matt Jones
Does Africa's eHealth need a new business model?
Africa eHealth Solutions’ (AeHS) AfyaPro is a Hospital Management Information System (HMIS) used in Malawi, Tanzania and Zimbabwe. It’s part of the International Institute for Communication’s (IICD) eHealth contribution to Africa since 1996. IICD’s presence in Burkina Faso, Ethiopia, Kenya, Ghana, Malawi, Mali, Tanzania, Uganda and Zambia has led to its view that a new business model’s needed to help stimulate its eHealth expansion. Three of IICD’s goals are to:Help developing countries realise locally owned sustainable development by harnessing ICT’s potential Sustain health innovations across Africa beyond dependency on donors Harness value provided by local companies experienced in deploying and servicing eHealth solutions to healthcare providers.
The challenge now is to achieve scale and quality assurance and be responsiveness to individual markets’ needs. AeHS International, and IICD initiative, sees the solution as a combination of local companies experienced in deploying and servicing eHealth solutions, quality control, software development and operational support management as part of a pan-African initiative.
AfyaPro has several features. They include modules for:Clinical decision and reference tools Peer consultation and referencing Community eHealth HMIS Results-based financial reporting eVouchers Mobile data collection.
Within these, there are several challenges:Lack of accurate and timely data Manual information recording processes prone to human error, leading to inadequate patient records, wasteful duplication of activities and processes, and lack of proper patient billing systems Lack of systems for managing financial transactions and data, hindering eﬀective accounting, strategic decision- making and prioritisation Inability to supervise accurate patient billing, negotiate state reimbursement and account for revenue collected in the course of the patient journey.
IICD’s solutions include:Co-ownership of solutions Quality management across deployments Financially sustainable implementation and support.
AfyPro deployments include:Tanzania: used in more than 20 facilities including district hospitals and lower level health facilities, achieving 15% increase in revenue Zimbabwe: the central system for Results-based Financing in six district hospitals Malawi: used by Nkhoma and Montfort Hospitals and ten rural health facilities.
Achievements by Nkhoma Hospital reveal some significant gains from better information since 2009. They include:More costs recovered per patient Fewer patients lost to billing Overall revenue increased after adjusting for extraneous factors Annual revenue per patient increased Improved staff transparency, auditability and accountability Differentiation between revenue streams from inpatient and outpatient billing and drug purchases enabling improved financial management and strategic planning.
The emphasis on financial improvements offers African countries both a solution and a contribution to affordability. It’s a vital combination of a new business model for Africa’s eHealth.
- 686 views
- June 10, 2015
- Tom Jones
Rome Business School eHealth Masters
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