A Glimpse into the Future Business and Technology of mHealth

WORKING DRAFTLast Modified 2/10/2011 11:53:36 PM Eastern Standard TimePrinted 10/02/2011 13:11:02 W. Europe Standard Time

WORKING DRAFT Last Modified 14/02/2011 13:30:24 W. Europe Standard Time Printed 2/11/2011 9:32:35 AM Pacific Standard TimemHealth: A Gli H lth Glimpse i t th into theFuture Business and Technologyof mHealth f H lhAlessio Ascari, Lisa EllisMcKinsey & CompanyFebruary 14th, 2011CONFIDENTIAL AND PROPRIETARYAny use of this material without specific permission of McKinsey & Company is strictly prohibited

Need is there… … demand is strong …Healthcare spend - increasingly unsustainable Significant interest in mHealth productsProjected healthcare spend as percentage of % respondents indicating “extremely” or “very”GDP 2030 2050 interested 2005 25 37 Working Draft - La Modified 2/10/2011 11 USA 15 Phone doctor 68 57 Sweden 10 15 22 26 ast Korea 6 10 15 1:53:36 PM Printed 10/02 Drug delivery 58 30Lack of access to basic healthcare 14Mortality rate per 1 000 population 1,000 2/2011 13:11:02 5x 400 mortality Health watch 59 221 35 36 152 78 USA Brazil India Western Latam Africa1 Asia Europe 1 Excludes South Africa McKinsey & Company | 2

… Technology is available… … and the business model works 67% ▪ Mobile phone Disguised example business case P & LTelecom penetration >30% ▪ Smartphone adoption in Working Draft - La Modified 2/10/2011 11 mature markets ▪ Existing ast technologies adequate 1:53:36 PM Printed 10/02Medical ▪ GlocapsDevices ▪ SIM Pill Revenue Opex EBITDA Dep Dep- EBIT ▪ Bluetooth BP 2/2011 13:11:02 reciation monitor Our work has indicated a positive NPV for mHealth services, with some even >10 ▪ Triage algorithms providing double digit returnsSoftware years in use > 5000 ▪ M di l apps on Medical the iTunes store McKinsey & Company | 3

…no wonders pilots are sprouting around the world NOT EXHAUSTIVE Vitaphone: Remote chronic 24-hour healthcare disease care monitoring and Integrated care ECG analysi solution, solution with web-based Chronic health manager Disease Working Draft - La Modified 2/10/2011 11 Remote Mgmt ast Innovative emergency response model Health Health tips and watch for Q&A via SMS 1:53:36 PM Printed 10/02 epilepsy Audio and visual children Remote advice alerts and mobile care solution Remote Drug triage/referral g SMS-based authentication 2/2011 13:11:02 vaccination (partnering mHealth planning with Telcos) info reminders HIV/AIDS Prevention of Patients in rural awareness SMS via SMS drug shortages areas connected reminders via satellite Real-time weighing and Medication adherence Remote doctor Healthcare diagnosis solution worker trainings k t i i services i i in Bangladesh & Pakistan McKinsey & Company | 4SOURCE: McKinsey presentation from the 2010 World Economic Forum (WEF) in Davos

Working Draft - La Modified 2/10/2011 11 ast 1:53:36 PM Printed 10/02 2/2011 13:11:02 McKinsey & Company | 5 mHealth from taking off? So what is stopping H lth f

1 A complex ecosystem with multiple stakeholders playing critical roles and with economic incentives not always aligned Regulators Working Draft - La Modified 2/10/2011 11 MNO service ast Payor Healthcare storage/ analytics server 1:53:36 PM Printed 10/02 Authentication/ MNO Encryption Device server 2/2011 13:11:02 Manufacturer Remote Data monitoring device transmission Data Intervention collection Patient Physician McKinsey & Company | 6

2 Shared standards and regulations not always in placeAdoption Working Draft - Last Modified 2/10/2011 11 a Railways Tipping Standards and ? 1:53:36 PM Printed 10/02 point regulations 2/2011 13:11:02 Time 3D Digital Media McKinsey & Company | 7

3 Above all, the cultural change required for several parties involved From . . . to Working Draft - Last Modified 2/10/2011 11:53:36 PM Printed 10/02/2011 13:11:02 a 1 2 McKinsey & Company | 8

Working Draft - Last Modified 2/10/2011 11 a 1:53:36 PM Printed 10/02 2/2011 13:11:02 McKinsey & Company | 9 Where are we i ? going?

Healthcare 2015: our vision for the near future Patient calls caregiver at his/her convenience any time of day/week as soon as symptoms begin Working Draft - La Modified 2/10/2011 11 Physician speaks to patient over phone relying also on data from phone, ast biometric sensors (m-stethoscope, smartphone-based ultrasound, etc.) 1:53:36 PM Printed 10/02 SMS reminders ensure that patient takes medicine as prescribed; can report side effects, etc. in real time 2/2011 13:11:02 Patient can be monitored remotely and advised if conditions worsen or if lifestyle elements negatively impact the situation Patient can access global medical expertise in a connected world McKinsey & Company | 10

The core mHealth contributors to the vision Remote Doctor Services Remote Health Monitoring Doctors / specialists triage and offer medical Providers remotely monitor chronically-ill advice to patients or healthcare p p professionals p patients and manage treatments accordingly g gy over the phone / video Working Draft - La Modified 2/10/2011 11 ast Drug authentication and compliance D h i i d li Information / Health & Wellness offerings I f i H l h W ll ff i Patients check drug authenticity and health Patients and health workers access workers monitor medication prescription information repositories directly remotely 1:53:36 PM Printed 10/02 Centralized resource scheduling Assisted-care support Mobile and automated workflow applications Frail and elderly patients will receive 2/2011 13:11:02 will enable real-time scheduling and optimized home-based care notification to improve system utilization Telediagnostics Electronic/mobile Health Records Patients from remote locations will be able to Clinical and administrative data will be stored get a diagnosis from the best specialists far in a centralized data repository away McKinsey & Company | 11

Three mHealth services will be widespread, leveraging core eHealthenablers Working Draft - La Modified 2/10/2011 11 Remote doctor Remote health services monitoring ast ▪ Addresses ~80% of ▪ Addresses ~70% of ▪ Easy to world population HC costs launch ▪ Works with existing ▪ Enhances providers ▪ Minimal 1:53:36 PM Printed 10/02 technology investment value proposition ▪ Compliment ▪ Proven business ▪ Improves lifestyle as ary to other model well as costs services 2/2011 13:11:02 SMS-based SMS based services Centralized resource scheduling Electronic health records El t i h lth d McKinsey & Company | 12

mHealth benefits Macroeconomic Social and lifestyle ▪ US$200 Bn per year of savings in Working Draft - La Modified 2/10/2011 11 healthcare systems costs through RHM ▪ 150,000 lives saved per year ▪ (example OECD+BRIC) ▪ 2 5 Million DALY saved per year 2.5 ast ▪ (example sub-Saharan Africa) 1:53:36 PM Printed 10/02 Financial ▪ Double digit EBIT margin at steady 2/2011 13:11:02 state ▪ Increased customer loyalty resulting in reduced customer churn ▪ New revenue streams and players McKinsey & Company | 13

mHealth provides a market opportunity for a variety of players REMOTE DOCTOR EXAMPLE Details follow Mobile operators Working Draft - Last Modified 2/10/2011 11 a Healthcare service providers Systems integrators 1:53:36 PM Printed 10/02/2011 13:11:02 2 Device OEMs Software vendors McKinsey & Company | 14

Mobile operators: core assets to leverage and potential roles to play Assets Connectivity ▪ Proven micro billing infrastructure micro-billing Working Draft - La Modified 2/10/2011 11 ▪ Reliable communication channels ast ▪ Authentication and secure storage Hosting / Billing ▪ Distribution channels close to end 1:53:36 PM Printed 10/02 users ▪ Experience with both B2C and B2B 2/2011 13:11:02 ▪ Brand recognition critical for launching new innovative services ▪ Trusted relationships with regulators and governments mHealth services McKinsey & Company | 15

Working Draft - Last Modified 2/10/2011 11:53:36 PM Printed 10/02/2011 13:11:02 a 1 2 McKinsey & Company | 16Thank you

WORKING DRAFTLast Modified 2/10/2011 11:53:36 PM Eastern Standard TimePrinted 10/02/2011 13:11:02 W. Europe Standard Time

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A Glimpse into the Future Business and Technology of mHealth

by Ric Ferraro on Mar 03, 2011

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