This document is a working draft of a McKinsey & Company presentation on mHealth from February 14, 2011. It discusses the growing need and demand for mobile health solutions given increasing healthcare costs and lack of access globally. It also notes that the necessary technologies are available and business models for mHealth have been shown to have positive financial returns. Examples are provided of various mHealth pilots that have launched around the world to address issues like chronic disease management, emergency response, vaccination programs, and access to care in remote areas.

1. WORKING DRAFT
Last Modified 2/10/2011 11:53:36 PM Eastern Standard Time
Printed 10/02/2011 13:11:02 W. Europe Standard Time

2. WORKING DRAFT
Last Modified 14/02/2011 13:30:24 W. Europe Standard Time
Printed 2/11/2011 9:32:35 AM Pacific Standard Time
mHealth: A Gli
H lth Glimpse i t th
into the
Future Business and Technology
of mHealth
f H lh
Alessio Ascari, Lisa Ellis
McKinsey & Company
February 14th, 2011
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited

3. Need is there… … demand is strong …
Healthcare spend - increasingly unsustainable Significant interest in mHealth products
Projected 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
30
Lack of access to basic healthcare 14
Mortality 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

4. … Technology is available… … and the business model works
67% ▪ Mobile phone Disguised example business case P & L
Telecom penetration
>30% ▪ Smartphone
adoption in
Working Draft - La Modified 2/10/2011 11
mature markets
▪ Existing
ast
technologies
adequate
1:53:36 PM Printed 10/02
Medical ▪ Glocaps
Devices ▪ 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 returns
Software years in use
> 5000
▪ M di l apps on
Medical
the iTunes store
McKinsey & Company | 3

5. …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 | 4
SOURCE: McKinsey presentation from the 2010 World Economic Forum (WEF) in Davos

6. 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

7. 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

8. 2 Shared standards and regulations not always in place
Adoption
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

9. 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

10. 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?

11. 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

12. 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

13. Three mHealth services will be widespread, leveraging core eHealth
enablers
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

14. 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

15. 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

16. 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

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

18. WORKING DRAFT
Last Modified 2/10/2011 11:53:36 PM Eastern Standard Time
Printed 10/02/2011 13:11:02 W. Europe Standard Time

19. WORKING DRAFT
Last Modified 2/10/2011 11:53:36 PM Eastern Standard Time
Printed 10/02/2011 13:11:02 W. Europe Standard Time

20. WORKING DRAFT
Last Modified 2/10/2011 11:53:36 PM Eastern Standard Time
Printed 10/02/2011 13:11:02 W. Europe Standard Time